David Rosen, Inc., et al.

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DAVID ROSEN, INC... ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket Tivu. Complaint, Dee. 2, 1959—Decision, Jan. 19, 1960 Consent order requiring an independent Philadelphia distributor of phonosraph records to retail outlets and juke box operators in the eastern Pennsylvania and southern New Jersey area, to cease giving concealed “payola™ (money or other valuable consideration) to disc jockeys or others as an inducement to broadcast records in which it had a financial interest, and requiring such disc jockeys or others to disclose when they were paid for the selection and broadcasting of records. Wr. John T. Walker and Mr. James H. Kelley supporting the complaint.

Mr, Matthew 8. Biron of Philadelphia, Pa., for respondents. Iniriax Decision By Enwanp Cree,, Hearing Examiner The Federal Trade Commission issued its complaint against the above-named respondents on December 2, 1959, charging them with having violated the provisions of the Federal Trade Commission Act by unfairly paying money or other valuable consideration to induce the playing of phonograph records over radio and television stations in order to enhance the popularity of such records. On December 31, 1959 there was submitted to the undersigned hearing examiner an agreement between the above-named respondents, their counsel, and counsel] supporting the complaint providing for the entry of a consent order.

Under the foregoing agreement, the respondents.admit the jurisdictional facts alleged in the complaint. The parties agree, among other things, that the cease and desist order there set forth may be entered without further notice and have the same force and effect as if entered after a full hearing and the document includes a waiver by the respondents of all rights to challenge or contest the validity of the order issuing in accordance therewith. The agreement further recites that it is for settlement purposes only and does not constitute an admission by the respondents that they have vio- Jated the Jaw as alleged in the complaint. The hearing examiner finds that the content of the agreement meets all of the requirements of Section 3.25(b) of the Rules of the ‘Commission.

Order 56 F.T.C.

The hearing examiner having considered the agreement and proposed order, and being of the opinion that they provide an appropriate basis for settlement and disposition of this proceeding, the agreement is hereby accepted, and it is ordered that said agreement shall not become a part of the official record unless and until it becomes a part of the decision of the Commission. The following jurisdictional findings are made and the following order issued. 1. Respondent David Rosen, Inc., is a corporation organized. existing and doing business under and by virtue of the laws of the State of Pennsylvania, with its principal office and place of business located at 835 North Broad Street, in the City of Philadelphia. State of Pennsylvania.

2. Respondents David Rosen and Joseph J. Wasserman are president and vice-president, respectively, of the corporate respondent. The address of the individual respondents is the same as that of said corporate respondent.

3. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents and the proceeding is in the public interest.

ORDER It is ordered, That. respondents David Rosen, Inc., a corporation, and its officers. and David Rosen and Joseph J. Wasserman, individually and as officers of said corporation, and respondents’ agents, representatives and employees. directly or through any corporate or other device, in connection with phonograph records which have been distributed in commerce, or which are used by radio or television stations in broadcasting programs in commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease. and desist. from:

1. Giving or offering to give, without. requiring public disclosure, any sum of money or other material consideration, to any person, directly: or indirectly, to induce that person to select, or participate in the selection of, and broadcasting of, any such records in which respondents, or anv of them. have a financial interest of any nature. 2, Giving or offering to give, without requiring public disclosure, any sum of money, or other material consideration, to any person, directly or indirectly, as an inducement to influence anv emplovee of a radio or television broadcasting station, or any other person, in any manner, to select. or participate in the selection of, and the broadcasting of, any such records in which respondents, or anv of them, have a financial interest. of any nature. REYNOLDS METALS CO. 743 T41 Syllabus There shall be “public disclosure” within the meaning of this order by any employee of a radio or television broadcasting station, or any other person, who selects or participates in the selection and broadcasting of a record, when he shall disclose, or cause to have disclosed, to the listening public at the time the record is played, that his selection and broadcasting of such record are in consideration for compensation of some nature, directly or indirectly, received by him or his employer.

DECISION OF THE COMMISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 3.21 of the Commission’s Rules of Practice. the initial decision of the hearing examiner shall on the 19th dav of January, 1960, become the decision of the Commission; and, accordingly :

It is ordered, That respondents herein shall within sixty (60) days after service upon them of this order, tile with the Commission a report. in writing setting forth in detail the manner and form in which they have complied with the order to cease and desist.