Helena Rubinstein, Inc.

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IN THE J\IATTRH OF HELENA RUBINSTEIN, INC.

CONSENT OIliER, ETC., IN REGARD TO Tile ALLEGED VIOLATION OF Sees. 2 (d) AND (e) OF THE' CLAYTON ACT Docket 6441. Complaint, Nov. 1955-Decision, May, 1956 Consent order requiring a manufacturer of cosmetics, beauty aids, and toilet preparations, ''with principal place of business in New York City, to cease violating Secs. 2 (d) and 2 (e) of the Clayton Act, as amended, by paying demonstrator allowallces, cooperative advertising materials and allowances and promotional allowances to competing customers in amounts not pro. portionally equal as required by the statute bnt determined on the basis of individual negotiations which resulted in different and arbitrary terms to different customers.

Before Lllr. Hobert L. Pipe?' hearing examiner. Jlh. Donald K. King for the Commission. Sherman Goldring, of New York City, for respondent. COJIPLAIXT The Federal Trade Commission, having reason to believe that I-Ielena Rubinstein, Inc., hereinaft.er designated as respondent, has violated and is now violating the provisions of sub sections (d) and (e) of Section 2 of the Clayton Act as amended by the Robinson:l- Patman Act, approved June 19, 1936 (U. , Title 15, Section 13), hereby issues its complaint, stating its charges with respect thereto as follows:

PARAGHAPI- 1. Helena n,ubinstein, Inc., is a corporation organized and doing business under and by virtue of the laws of the State of N ew York, with its office and principal place of business located at East Hils, Long Island, New York.

PAR. 2. The respondent is now, and for a number of ye,ars has been, engaged in the business of manufacturing and selling cosmetics beauty aids, a.nd t.oilet preparations. Said products are sold to customers with places of business located throughout the several states of the "United States and in the District of Columbia for resale to consumers within the united States.

PAIL 3. In the course and conduct of said business, respondent has engaged in commerce as "commeI'ce ' is defined in the Clayton Act as amended by the Robinson-Patman Act, having shipped its products or caused them to be transported from its said place of business to said customers with places of business located in the several states of the United States and in District of Columbia. Complaint 52 F. T. C.

PAn. 4. In the course of said business in commerce, respondent has paid or contracted to pay, money, goods, or other things of value to or for the benefit of some of its customers as compensation in consideration for services and facilities furnished, or contracted to be furnished, by or through such customers in connection with the processing, handling, sale or offering for sale of respondent' s products and respondent has not made or contracted to make such payments or considerations (or in the alternative, equivalent services or facilities) available on proportionally equal terms to aU other of its customers competing in the sale and distribution of said products. PAR. 5. In the course of said business in commerce, respondent has furnished, contracted to furnish, or has contributed to the furnishing of certain services and facilities to some of its customers in connection with the processing, handling, sale or offering for sale of respondent' s products by them; and respondent has not made such services and facilities (or in the alternative, equivalent payments or allowances) available on proportlonally equal terms to an other of its customers competing in the sale and distribution or said products. PAn. 6. Specifically, in dealing with its customers, respondent has rurnished or paid demonstrator services or allowance,s and/or advertising facilities or allowances and/or paid promotional allowances to certain competing customers in amounts (based on respondent:s costs) not equal to the same percentage of net purchases of respondents products by such customers (and not proportionally equal by any other test) ; and respondent did not offer or otherwise make available such services, facilities and allm,ances in amounts equal to the largest or such percentages to all such competing customers (and not proportionally equal by any other test).

Illustrative or and included a,among the practices rererred to above were respondent' s rollowing described dealings with its 64 customers located in the 'IV ashington, D. C., trade area during the year 1954. 1. Two large department stores received rrom respondent promotional and demonstrator allowances in amounts equal to a higher percentage or their net purchases than was granted by respondent to other compe6ng customers who furnished the same or greater reciprocal services or racilities.

2. Six favored customers were furnished cooperative advertising materials and allowances by respondent totaling in excess of 8% of their individual net purchases from respondent. Seventeen competing customers were not accorded cooperative advertising materials or allowances by respondent. 1\iany other competing customers were rurnished cooperative advertising materials or allowances by respond HELENA RUBINSTEIN, INC. 1269 1267 Decision ent equal to approximately 2% of their individual net purchases from respondent.

3. Ce.rtain of respondent' s customers in that sales area whose net purchases from respondent total less than $8 000 per year received promotional allowances equal to 9% of their individual net purchases from respondent while other competing customers purchasing approximately the same quantities from respondent received promotional allowances of 5% of net purchases from respondent. In determining the services and allowances granted to these com. peting customers, respondent did not use any proportionally equal basis. On the contrary, they were determined on the basis of individual uegotiations between respondent and different customers which resulted in different and arbitrary terms. PAR. 7. The acts and practices of the respondent as above alleged violate Subsections (d) and (e) of Section 2 of the Clayton Act as amended by the Robinson.Patman Act (U.S. C., Title 15, Section 13). INITIAL DECISION BY ROBERT L. PIPER , HEAilXG EXA nner The Federal Trade Commission issued its complaint against the above. named respondent on November 8 , 1955 , charging it with having violated Section 2 (d) and (e) of the Clayton Act, as amended by the Robinson-Patman Act. After being served with said com. plaint, respondent appeared by counsel and entered into an agree. ment, related JYlarch 6, 1956 , containing a consent order to cea,se and desist, disposing of all the issues in this proceeding without hearing. Said agreement has been submitted to the undersigned, heretofore duly designated to act as hearing examiner herein, for his consideration in accordance with Section 3.25 of the Rules of Practice of the Commission.

Respondent, pursua,nt to the a.foresaid agreement, has admitted all of the jurisdictional allegations of the complaint and agreed that the record may be taken as if findings of jurisdictional facts had been duly made in accordance with such allegations. Said agreement further provides that respondent waives all further procedural steps before the hearing examiner or the Commission, including the making of findings of fact or conclusions of law and the right to challenge or contest the validity of the order to cease and desist entered in accordance with such agreement. It has also been agreed that the record herein shall consist solely of the complaint and said agreement that the agreement shall not become a part of the offcial record unless and until it becomes a part of the decision of the Commission, that said agreement is for settlement purposes only and does not constitute an admission by respondent that it has violated the law as alleged Order 52F.

in the complaint, that said order to cease and desist shall have the same force and effect as if entered after a full hearing and may be altered, modified, or set aside in the manner provided for other orders and that the complaint ancl Trade Pmctice Rule 16 C. R. 221.1 (g) shall be used in construing the terms of the order. This proceeding having now come on for final consideration on the complaint and the aforesaid agreement containing the consent order and it appearing that the order and agreement cover all of the allegations of the complaint ancl provide for appropriate disposition of this proceeding, the same arc hereby accepteel and ordered filed upon becoming part of the Commission s decision pursuant to Sections 3. and 3.25 of the Rules of Practice, and the heating examiner accordingly makes the follmving findings, for jurisdictional purposes, and order:

1. Respondent IIelcna Rubillstein Inc., is a corporation existing and doing business under and by virtue of the laws of the State of New York, with its offce ancl principal place of business located at 65:, Fifth Avenue, in the City of N ew York, State of X ew York. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent above named. The complaint states a cause of action against said respondent under the Clayton Act as amended by the Robinson-Patman Act, and this proceeding is in the interest of the public. ORDER 1 t is OJ-doped That respondent Ilele.lU n,ubinstein, Inc., a corporation, its offcers, employees, agents and representatives, directly or through U1y corporate or other device, in connection with the sale or cffeTing for sale, of cosmetics, beauty aids, and toilet preparations in commerce, as "commerce" is deIlned in the Clayton Act as amended do fOl'tJnvith cease and desist from:

1. Paying, or contracting to pay to, or for the benefit of, any customer, anything of value as compensation or in consideration for services or facilities furnished by or through such customer in connection with the handling, processing, sale or offering for sale of respondent's products unless such payment or consideration is made vailable on proportionally equal terms to all other customers competing in the distribution or resa,le of such products. 2. Furnishing or contributing to the furnishing of services or facilities in connection with the handling, processing, sale or offering for sale of respondent's products to any purchaser from respondent of such products bought for resale, when such services or facilities ate not accorded on proportionally equal terms to all other purchasers HELENA RUBINSTEIN, INC. 1271 1267 Decision from respondent who resell such products in competition with such purchasers who receive such servjces or fa.cilities. DECISION OF THE CO:.D:ISSION AND ORDJm TO FILE REPORT OF CO)IPLIAXCE Pursuant to Section 3.21 of thc Commission s Rules of Practice, the initial decision of the hearing examiner shan, on the 9th day of :May, ID56 become the decision of the Commission; and, accordingly; It is ordered That the respondent herein shall within sixty (60) days after service upon it of this order, file with the Commission a report in writing setting forth in detail the manner and form in which it has complied with the order to cease and desist. &;

Complaint 52 F.