Empihe Plastic Corporation

Text (OCR of the scan at left; may contain errors)

IN THE iVlATTER OF EMPIHE PLASTIC CORPORATION CQI\TSENT ORDER, ETC., JK Rl' GARD TO THE ALLEGED VlOLATIOK OF Sf C. 2(11) OF THE CLAYTOh ACT lJockci 7G(j9. Contl'hcint, Feb. 20, 1958-- Decisj, July 1.58 Consent order l'equil'ing a manufacturer of plastic toys with factory Pelham Manor, X. , and sales office in :-ew York City, to cease discriminating in price in violation of Section 2(a) of the Clayton Act uy granting as a discount or rebate an amount equivalent to five per cent of list price to certain toy jobbers and wholesalers ,,'while not making such allo\.vance ,waiIable to their competitors.

COMPLA!~T The Federal Trade Commission, having reason to believe that respondent Empire Plastic Corporation, more particularly designated and described hereinafter, has violated the provisions of Section 2 (a) of the Clay Icon Act (U. C. Title 15 , Sec. 13) as amended by the Robinson-Patman Act, approved June 19 , 1936 hereby issues its eomplajnt, stating its charges with respect thereto as follows:

PARAGRAPH 1. Respondent Empire Plastic Corporation is a corporation organized and existing under the laws of the state of New York "with its principal oUke and place of business located at 14 Pelham Parkway, Pelham Manor, N. PAR. 2. Respondent has been and is now engaged in the n1anufadurc, sale and distribution of plastic toys throughout the United States. It operates a factory at the foregoing address and also maintains a sales oftce in New York City. Its annual volumn of sales approximates $2,000 000 and its customers consist of jobbers anrl chain scores. Respondent is represented in various sections of the country by commission merchants \'\ho are paid on a commission basis but \vho also represent other toy manufacturers PAR. 3. Respondent, in the course and conduct of its said business, is engaged in commerce, as ;' commcrcc" is defined in the Clayton Act, in that it sells and distributes toys to purchasers thereof located in states other than the state of origin of shipmcnt and causes such products to be shipped and transported from its place of business to purchasers located in other states and in the District of Columbia, and there is now and has been a constant J04 FEDERAL TRADE COMYfISSION DECISIONS Complaint \ F. course and flow of trade and commerce in such products between respondent and said purchasers and respondent is therefore subject to the jurisdiction of the Federal Trade Commission. PAR. 4. In the course and conduct of its said business, respondent has been and is now in competition with other corporations, partnerships and individuals in the manufacture, salc and distribution in commerce of toys except as such competition has been substantially lessened hy the pricing- practices of respondent hereinafter alleged.

Some of the respondent' s purchasers are in competition with each other and with purchasers of competitors of respondent in the resale of toys.

PAR. 0. Respondent, either directly or indirectly, has been and is now discriminating in price behveen different purchasers of its toys by f;selling such products to some purchasers at substantiaJly higher prices than it sells such products of like grade and quality to other purchasers, some of whom are in competition with the less favored purchasers in the resale of such products. For example, since 1954 said respondent has granted, either hy ,vay of a discount from list price or as a rebate at the end of a period of time, an amount equivalent to 5 (-: of list price in the sale of toys of like grade and quality to some purchasers but not to others, which results in higher prices being paid by those purchasers who do not receive the benefit of such discount or rebate than are paid by those purchasers who do receive the benefit of such discount or rebate. Some of the favored purchasers compete with the unfavored purchasers in thlC resale of such products.

The purchasers of respondent's toys who have received preferential prices by way of saiel discount or rebate are members of a corporation known as March of Toys, Inc., \vhose membership is composed of toy jobbers and wholesalers. It is to the members of this corporation, March of Toys, Inc. , that said respondent has granted a preferential price by means of the above described discount or rebate.

PAR. G. The discriminations in price on the part of respondent being substantial, it is alleged that the effect thereof may he substantially to lessen competition and to tend to create a monopoly in the respective lines of commerce in which respondent and the purchasers receiving the preferential prices are engaged, and to tend to prevent, injure and destroy competition between , !\.

EMPIRE PLASTIC CORPORATIO~ 105 103 Decision respondent and its competitors and between and among purchasers of such toys from respondent.

PAR. 7. The discriminations in price, as hereinbefore alleged are in violation of the provisions of Section 2 (a) of the Clayton Act, as amended by the Robinson-Patman Act. Mr. Lewis F. DepnJ and l'JI'. P' rederick jWcMa11.t8 for the Commission.

Krisel, Lessall Dowling, of New York, N. , by M?'. Geo?'ge Lessul1 for respondent.

INITIAL DECISION BY EARL J. KOLE , HEARING EXAMINER The complaint in this proceeding, issued February 10, 1958, charges respondent Empire Plastic Corporation, a corporation located at 14 Pelham Parkway, Pelham :vanor, with violation of the provisions of subsection (a) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act, in the sale and distribution of toys.

After the issuance of the complaint, said respondent entered into an agreement containing consent order at cease and desist with counsel in support of the complaint, disposing of all the issues as to all parties in this proceeding, \which agreement was duly approved by the director and assistant director of the Bureau of Litigation.

It was expressly provided in said agreement that the signing thereof if for settlement purposes only and does not constitute an admission by said respondent that it. has violated the law as alleged in the complaint.

By the terms of said agreement, the said respondent admitted all the jurisdictional facts alleged in the complaint and agreed that the record herein may be taken as if the Commission had made findings of jurisdictional facts in accordance with the allegations.

By said agreement, the respondent expressly waived any further procedural steps before the hearing examiner and the Commission; the making of findings of fact or conclusions of law; and all the rights it may have to challenge or contest t.he validity of the order to cease and desist entered in accordance with the agreement.

Respondent further agreed that the order to cease and desist issued in accordance with said agreement, shall have the same force and effect as if made after a full hearing. It was further provided that said agreement, together with 106 FEDERAL TRADE CCNDIISSIO" DECISIOl\S Deeision 55 F.

the complaint, shall constitute the entire record herein; that the complaint herein may be used in construing the terms of the order issued pursuant to said agreement; and that saiel order may be altered, modified or set aside in the manner prescribed by the statute for orders of the Commission. The hearing examiner has considered slich agreement al1cl the order therein contain2d, and, it appearing that saiel agreement and order provide for an appropriate disposition of this proceeding, the same is hereby accepted and is ordered filed upon becoming part of the Commission s decision in accordance with Sections 21 and 8. 25 of the Eules of Practice, and, in consonance with the terms of said agreement, the hearing examiner flock-; that the Federal Tracie Commission has jurisdiction of thc subject matter of this proceeding and of the respondent named herein, and issues the following oreler:

ORDER It is onle1' That the respondent Empire Plastic Corporation a corporation, and its offcers, representatives, agents and employees, directly or through any corporate or other device, in connection \with the sale of toys in commerce, as "commerce " is defmed in the Clayton Act, do forlhwith cease and desist from discriminating in price by selling such toys of like grade and quality to any purchaser at prices higher than those granted any other purchaser:

1. Where sllch other purchaser competes in f"ct with the unfavorecl purchaser in the resale and distribution of such products, or 2. V\There respondent, in the sale of such products, is in competition with any other seller.

DECISIO?\' OF THE COI\1rIISSION A?\D ORDER TO FILE REPORT OF COMPLIAKCE This matter having come on to be heard by the Commis.sion upon its review\v of the hearing- examiner s initial decision filed on May 1:3 , 1958 , and the Commission having; delermined that said initial decision is adequate and appropriate in al1 respects to dispose of this proceeding:

It is onlened That the aforesaid initial decision be, and il hereby is, adopted as the decision of the Commission. It is Im'ther o1'dered That the respondent Empire P1astie Corporation, a corporation, shan within sixty (60) clays after IDIPIRE PLASTIC CORPORATION 107 103 Decision 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 contained in said initial decision.

Dec.ision 55 F.