NIBCO Inc.

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Ix THE MATTER OF IBCO I1\C.

COXSEXT Order, ETC. , IX UEGARD TO THE \ALLEGED nol\TION OF THE FEDERAL TR..WE COADIISSION ACT XXD SEC. 2(d) OF Tile CLAYTON -\.CT Docket 8074. Complaint, AU9. 10, 1960-Decis-ion, Mar. , 1961 Consent order requiring an Elkhart, Ind., manufacturer of vah- , fittings, and related products used by plumbers and pipefitters, to cease discriminating aIlong its customers in violation of Sec. 2(d) of the Clayton Act by such practices as paying sums of money amounting to more than 82500 to the American Radiator and Standard Sanitary Corp. for promoting its products through television programs in the trading areas of New Orleans, La., and Pittsburgb, Pa., without making comparable payments available to competitors of the latter.

COl\PLAINT The Federal Trade Commission, having reason to believe that the party named in the caption hereof and hereby made respondent herein, and hereinafter designated and described more particularly, has been and is using unfair methods of competition and unfair acts and practices in commerce in violation of Section 5 of the Federal NIBCO INC. 261 260 Complaint Trade Commission Act (15 D. C. Sec. 45), and has been and is violating subsection (d) of Section 2 of of the Clayton Act, as amended (15 D. C. Sec. 13), and it appearing to the Commission that a proceeding by it "ould be to the interest of the public, the Commission hereby issues its complaint, stating its charges with respect thereto as follmys:

coeXT I Charging violation of Section 5 of the Federal Trade Commission Act, the Commission alleges:

PARAGRAPH 1. Respondent Xibco, Inc., is a corporation organized existing and doing business under and by virtue of the laws of the State of IndiaJUl, "ith its principal office and place of business located at 500 Simpson Street, Elkhart, Indiana.

PA.R. 2. Respondent is nov and has been engaged in the manufacture, sale and distribut.ion of valves, fittings and related products, as used by plumbers and pipefitters.

Respondent sells its products of like grade ftlld quality, for use or resale, t.o a. large number of customers located throughout the L'Tnited States, including ,,'ho)esnlers and nlanufacturer s representatives. Said manufacturer s representatives are independent businessmen under contract 1\Tjth respondent., purchasing from respondent for resale to \\wholesale1'5. Approximately 85% of respondent's sales are made. to said manufactllrer s representatives. Respondent s sales of its products are substantial, exceeding $20 000 000 annually. I.. 3. Respondent, in the course ancl conduct of its business, as aforesa.id, has caused and now causes it.s said products to be shipped and transported from the state or states of location of its various manufacturing plants, 1yal'ehonses and places of business, to purchasers thereof located in stat.es other than the state or states wherein saiel shipment or transportation originated. There has been at alj times mentioned herein a continuous course of trade in commerce, as commerce" is defined in the Federal Trade Commission Act. PAn. 4.. In the course and conduct of its business, as aforesaid respondent has established and majntains a policy whereby it fixes certain specified prices and discounts at which its products are be resold by its above-mentioned manufacturer s representatives. Such prices and discounts are made known to said manufacturer representatives by published price lists or otherwise, and said manufacturer s representatives are required to adhere to such prices and discounts.

The direct effect of said policy and practices has been to cause respondent' s manufacturer s representatives to sen respondent' products at the prices and discounts fixed and established by respond- Complaint 38 F.

ent; to pl'eycnt respondent's said manufacturer s representatives from selling respondent's products at prices either greater 01' less than those fixed and established by respondent, which greater or Jess prices they may deem adequate or warranted by their respective seJ1ng costs and by t.trade and competitive conditions generally; t.o suppress competition among said manufacturer s representatives in the distribution and saJe of respondent's products; to suppress competition among respondent's said manufacturer s representatives and others in the distribut.ion and saJe of valves and fittings to t.he wholesaJer trade; and to deprive the uJtimat.e purehascrs of such products of the advantages in price which they would otherwise obt.ain from a free and unobstructed flow of commerce in such products. PAR. 5. The acts and practices of respondent., as herein alleged are ajj to t.he injury and prejudice of competitors of respondent, of purchasers from respondent. , and of the pubJjc; have a t.tendency and effect of obstructing, hindering, lessening and preventing competition in the sale of valves, pipc fittings and related products in commerce "within the intent and meaning of the Federal Trade Commission Act; and const.itute unfair methods of competition and unfair acts and practices in violation of Section 5 of the Federal Trade Commission Act.

COUNT II Charging violation of subsection (d) of Section 2 of the Clayton Act, as amended, the Commission alleges:

PARAGRAPHS 1 2 and 3: The allegations of Paragraphs 1, 2 and 3 of COL"NT I of this complaint nre incorporated herein by reference and eonstit.ute the allegations of Paragraphs 1, 2 and 3 of comet IT except that the reference in Paragraph 3 of COUNT I to the Federal Trade Commission Act is eliminated herein, and reference to the Clayton Act, as amended, is substituted therefor. PAR. 4. In the course and conduct of its business in commerce respondent has paid or contracted for the payment of somet.hing of value to or for the benefit of certain of its customers as compensation or in consideration for services or facilities furnished by or through or sale ofsuch customers in connection with their oiIering for sale products sold to them by respondent, and such payment.s have not been offered or otherwise made available on proportionally equal terms to all other customers competing in the sale and distribution of respondent's products.

PAR. 5. For example, between September 1958 and June 1959 respondent contracted to pay, and periodically did pay, sums amounting to more than $2500.00 to the American Radiator and Sbmclard Sanitary Corporate.ion for services a.nd facilities furnished :VIBCO INC. 263 260 Decision it by American Radiator and Standard Sanitary Corporation in promo6ng the sa.le of respondent's products through television programs sponsored by American R.acliator and Standard Sanitary Corporation in the t.trading areas of New Orleans, Louisiana, and Pittsburgh, Pennsylvania.. Such payments were not offered or otherisc made available on proportionally equal terms to aU other customers competing with American Radiator and Standard Sanitary Corporation in the sale and distribution of products of like grade and quality purchased from respondent.

PAH. 6. The acts and pra,ctices of respondent, as alleged herein are in violation of subsection (d) of Section 2 of the Clayton Act as amended by the Robinson Patman Act.

JIr. Lynn O. Pa"lson and JIr. Timothy J. Oronin. Jr. for the Commission.

IV each. i1 ott il organ of 'Washington, D. C. . by il r. Hamid E. 1110tt and Afr. Edward J. Stegemann: and Bontrager Spahn EUchrlTt. !Jd.. for t.hc respondent.

ITIAL DECISTOX BY EARL J. KOLB, HEARING EXAMI:NER The complaint in this proceeding, issued August 10, 1960, contains o counts. Connt I charges respondent Nibco Inc., a corporation located at 500 Simpson Street., Elkhart, Indiana., with violation of Section 5 of the Federal Trade Commission Act. and Count II charges said respondent, with violation aT snbseetion (d) of Section 2 of the Clayton Act, as amended, in connection with the manufacture sale a,nel distribution of valves, fittings and related products, as used by pJumbers and pipefit.ers.

After the issuance of the complaint, respondent entered into an agreement containing consent order to cease and desist '''ith counsel in support of the complaint, disposing of all the issues in this proceeding, which agreement was duJy approved by the Director and Associate Director of the Bureau of Litigation. In Count I of the compla,int, respondent Nibco Inc. is charged with establishing and maintaining a policy whereby it fixes certain specified prices ncl discounts at -.which its products are to be resold. It \ras alleged in the a,agreement that this charge was based upon the beJid that respondent's system of distribution utilized distributors who were independent businessmen, when in fact said distributors ,veto manufacturers' sales representatives, and as such were agents of the respondent. Consequently, it ,,,as agreed that Count I of the complaint should be dismissed.

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264 FEDERAL TRADE COMMISSIOK DECISIOKS Order ;'8 F. It \yas expressly provided in the agreement that the signing thereof is for settlement purposes only and does not constitute an admission by respondent. that it has violated the In" as alleged in the complaint.

By the terms of said agreement, the 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 allegat.ions. By said agreen)cnt ihe respondent expressly waived any furt.her procedural steps before the hearing exa,miner and the Commission; all thethe making of findings of fact or c.onclusiolls of 1aw; and rights it may have to challe,nge or contest the validity of the order to cease and desist entered in accordfllce with the agreement. Respondent. further agreed that. the order t.o cease and desist, issued in Hceordance with said agreement, shall httve the same force and effect as if made after a full hearing.

It "as further provided that said agreement, together with the complttint, shall constitute the entire record herein; that. t.he C0111plnint herein may be llsed in construing the terms of the order issue(1 pursuant to ftic1 agreement; fwd that said order may be altere. , modified or set aside, in the nmlll1er prescribed by the statute for orders of the Commission.

The hearing examiner has considered suc.h agreement and the order thcrein contained, and, it appearing that said agreement and oreler provides for an appropriate disposition of this proceeding, the SHIne is hereby accepted and is ordered filed upon becoming part of the Commission s decision in accordance "ith Sections and 8.25 of t.he Rules of Practice, and, in consonance with the terms of said agreement, the hearing examiner finds that the Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of t.he re3ponc1ent named herein: a.ncl issues t.he -following order.

OI-ter It is onlered That respondent ibco Inc.., a corporation, and its officexs, employees, agents and representat.ives directly or through any corporate or other device: in or in connection with the offering for sale, sale or distribution of pipe, pipe fittings, anc1related products, in commerce, as "commerce" is defined in the Clayton Act, as amended, do iortlnyith cease and desist from: Paying or contracting for the payment of anything of value to or for the benefit of, any customers of respondent as compensation ALUMINUM COMPk.,Y OF AMERICA ET AL. 265 260 Complaint or in consideration for any services or facilities furnished by or through such customers in connection with the handling, offering for srdc, sale or clist:riblltion of said products, unless such payment or consider.l'ntiol1 is affrmatively made available on proportionally equal.l terms to all other customers competing in the distribution of such products.

1 t is fl/PtlW)' or-deter! That corXT I of the complaint horein is dismissed.

DECISTOX OF THE CO?DIISSIOX I.XD ORDER TO FILE REPOIlT OF COl\:ffll\NCE PUrSl1f111t to Section 3.21 of the COlTlnissiol1 s R.iiles of Practice the illitinl decision of the. hearing examiner shall, on the 2nd day of )Iarch, IDG1 , become the decision of the Commission; and, accordingly:

It is onln' Th,lt the responllent herein shall ,,'within sixty (60) clays after service upon it. of this order, file with the Commission a report in \"iTiling setting forth in detail the manner and form in