London Records, Inc.

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

In THE MATTER OF LONDON RECORDS, INC.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 7671. Complaint, Dec. 2, 1959—Decision, Feb. 24, 1960 Consent order requiring New York City manufacturer of phonograph records to cease disbursing concealed “payola’—payment of money or other valuable consideration to disk jockeys of radio and television programs—to induce the “exposure’”—playing of a record day after day and several times a day—and sale of its records.

Mr. John T. Walker and Mr. James H. Kelley supporting the complaint.

Kaye, Scholer, Fierman, Hays & Handler, by Mr. Sidney A. Diamond of New York, N.Y., for respondent. In1tT1au Decision py Enwarp Creel, Hearinc EXsMINeER The Federal Trade Commission issued its complaint against the above-named respondent on December 2, 1959, charging it 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 February 2, 1960 there was submitted to the undersigned hearing examiner an agreement between the above-named respondent, its counsel, and counsel supporting the complaint providing for the entry of a consent order.

Under the foregoing agreement, the respondent admits 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 respondent. 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 respondent that it has violated the law as alleged in the complaint.

LONDON RECORDS, INC. 953 952 Order 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.

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 London Records, Inc., is a corporation existing and doing business under and by virtue of the laws of the State of New York, with its office and principal place of business located at 521-39 West 25th Street, in the City of New York, State of New York.

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

ORDER It is ordered, That respondent London Records, Inc., a corporation, and its officers, and respondent's 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 respondent has 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 any employee 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 respondent has a financial interest. of any nature.

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 Decision 56 F.T.C.

disclosed, to the listening public at the time the record is played, that his selection and broadcasting of such record are in coonsideration 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 24th day of February, 1960, become the decision of the Commission; and, accordingly :

It is ordered, That respondent herein shal] 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