Donenfeld' S Inc.

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

IN THE JYL\TTE OF DONENFELD' S INC., ET AI,.

CQ!\TSENT ORDER , ETC. , IN REGARD TO THE .A.JLEGED VIOLATION OF THE FEDERA TRE CQ1.nnSSION AXD THE FUR PRODVCT LABELING ACTS Docket 0-149. COtnplnint, June 1962-Decision, Jliile 19, 1962 Consent order requiring furriers in Dayton, Obio, to cease violating the FUl Products Labeling Act by failng to disclose 011 labels and invoices and in advertising, the names of animals producing certain furs; failng to disclose on labels when fur products were composed uf cheap or waste fur and to identify the manufacturer, etc.; failing to show all invoices and in advertising when furs were artificially colored or composed of flanks and to use the terms "Persian Lamb" and dDyed ::louton" as required; failing to show on invoices the country of origin of imported furs, and invoicing bleached and dyed fur as natural; and faUing in other respects to comply \with requirements of the Ad.

CO::fPLAINT Pursuant to the provisions of the Federal Trade Comnlission Act and the Fur Products Labehng Act and by virtue of the authority vested in it by said Acts, the Federal Trade Conm1ission having reason to believe that Donenfeld' , Inc., a corporation, and Ralph Donenfeld and Stanley R. Donenfeld, individually and as offcers of said corporation, hereinafter referred to as respondents, have violated the provisions of said Acts and the Rules and Regulations .promulgated under the Fur Products Labeling Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public inierest, hereby issues its complaint stating its charges in that respect as foJ1ows:

PAHAGIUPH 1. Respon(le.nt Donenfcld' , Inc., is a. corporation organized, existing and doing business by virtue of and w1cler the laws of the State of Ohio with its offce and principal place of business located at 35 North Main Street, Dayton, Ohio. Respondents Ralph Donenfeld and Stanley R. Donenfeld are Vice President and Secretary-Treasurer, respectively, of the said corporate respondent and formulate, direct and control the acts and practices , DOKE:KFELD' S INC. , ET AL. 1735 1734 Complaint of the corporate respondent, including the acts and practices hereinafter set forth. Their address is the same as that of the corporate respondent.

PAR. 2. Subsequent to the effective date of the Fur Products Labeling Act on August 9, 1952, respondents have been and are now engaged in the introduction into commerce, and in the sale, advertising, and offering for sale, in commerce, and in the transportation and distribution, in commerce, of fur products; and have sold, advertised offered for sale, transported and distributed fur products which have been made in whole or in part of fur which had been shipped and recei'i" ecl in commerce, as the terms " commerce fur" and "fur product" are dcfined in the Fur Products Labeling Act. PAR. 3. Certain of said fur products were mishranded in that they were falsely and deceptively laheled or otherwise falsely or deceptively identified with rcspeet of the name of the country of origin of imported furs used in the fur product, in violation of Section 4(1) of the Fur Products Labeling Act.

PAIL 4. Certain of said fur products were mishranded in that they were not labeled as required under the provisions of Section 4(2) of the Fur Products Labeling Act and in the manner and form prescrihed by thc Rules and Regulations promulgated thereunder. Among such misbranded fur products, but not limited thereto, were fur products with labels which failed:

1. To show the true animal name of the fur used in the fur product. 2. To show that the fur product was composed in whole or in substantial part of paws, tails, benies, or waste fur, when such was the fact.

3. To show the name, or other identification issued and registered by t.he Commission of one or more of the persons who manufactured such fur product for introduction into commerce, introduced it into commerce, sold it in commerce, or transported or distributed it in commerce.

PAR. 5. Certain of said fur products were misbranded in violation of the Fur Products Labeling Act in that they wore not labeled in accordance with the Rules and Regulations promulgated thereunder in the following respects:

(a) Information required under Section 4(2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder was set forth in abbreviated form, in violation of Rule 4 of said Rules and Regulations.

(h) Labels affxed to fur products failed to show that the fur products were composed in whole or substantial part of flanks: \vhen 1736 FEDERAL TRADE CO?d1IISSION DECISIOKS C0l11plaint GO F.

such was the fact, in violation of Rule 20 of said Rules and Regulations. (C) Labels affxed to fur products did not comply with the minimum size requirements of one and three-quarter inches by two and threequarter inches, in violation of Rule 27 of said Rules and Regulations. (d) Information required under Section 4(2) of the Fur Products tbeling Act and the R.ules and Regulations promulgated thereunder was mingled with non-required information, in violation of Rule 29 (a) of said Rules and Regulations.

(e) Information required under Section 4(2) of the Fur Products Labeling Act and the Rules and Regubtions p1'omulgated thereunder was set forth in handwriting on labels, in violation of Rule 29 (b) of said R,nies and Regulations.

(f) Information required under Section 4(2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder was not set forth in the required sequence, in violation of Rule 30 of said R.ules and Regulations.

(g) Information requirec111ndcr Srction 4(2) of the Fur I)rocll1cts Labeling Act and the Rules and Regulations promulgated thereunder was not separately set forth on labels with respect to each section of fur products composed of two or more sections containing c1iiIerent animnJ furs, in violation of Hule 3G of said Rules and Hegulat.ions. (h) Required item numbers were not set forth on hlbels, in violation of Rule 40 of said Rules and Regulations.

PAR. 6. Certain of said fur products were falsely and deceptively invoiced by the. respondents in that they were not invoiced as required by Section 5 (b) (1) of the Fur Products Labeling Act, and the Rules and Regulations promulgated under-r such Act. Among such falsely and deceptively invoiced fur products but not limited thereto, were invoices pertaining to such fur products which failed:

1. To show the, true animnJ name aT the fur used in the fur product. 2. To disclose, that the fur contained in the fur products was bleached, dyed, or otherwise a-rtificjnl1y colored, when sllch "as the fact.

3. To show the country of origin of the imported furs llsed in the fur product.

PAR. 7. Certain of said fur products were falsely and deceptively invoiced, in violation of the Fur Products La.beling Act in that they were not invoiced in accordance \"ith the Rules and Regulations promulgated thereunder in tbe following respects: (a) Information required under,r Section 5(b) (1) of the Fur Products Labeling Act and the Rules and Regulations promulgated there- DO?\E TELD' lXC" ET AL. 1737 173- Complaint under was set forth in abbreviated form, in violation of Rule 4 of said Rules and Regulations.

(b) The term "Persian Lamb" was not set forth in the manner required, in violation of Rule 8 of said Rules and Regulations. (e) The term "Dyed Mouton Lamh" was not set forth in the manner required, in violation of Rule 9 of said JIuJes and Regulations. (d) Invoices failed to show that fur products were composed in whole or substantial part of flanks, when such was the fact, in violation of Rule 20 of said Rules and Regulations. (e) Information required under Section 5(b) (1) of the Fur Products Labeling Act: and the. Rules and Regulations promulgated thereunder tS not set forth separately on invoices with respect to each section of fur products composed of two or more sections containing different animal furs, in violation of Rule 36 of said Rules and Hegulations.

(f) Required item numbers were not set forth on invoices, in violation of Rule 40 of said Rules and Regulations. PAR. 8. Certain of said fur products were falsely and deceptively invoiced in that said fur products were invoieed to show that the fur con tained therein was natural when in fact such fur was bleached dyed or otherwise artificially colored, in violation of Section 5(b) (2) of tbe Fur Products Laheling Act.

P AU. 9. Certain of said fur products were falsely and deceptively advertised, in violation of the Fur Products Labeling Act in that said fur products were not advertised in accordance with the provisions of Section 5 (a) of the said Act and the Rules and Regulations promulgated thereunder.

Said advertisements were intended to aid, promote and assist, dircctly or indirectly, in the sale and offering for sale of said fur products.

Among and included in the advertisements as aforesaid, but not limited thereto, were advertisements of respondents which appeared in issues of the .J journal Herald and the Dayton Daily News, newspapers published in the city of Dayton, State of Ohio, and having a wide circulation in said State and various other States of the United States.

Among such false and deceptive advertisements of fur products but not iimited thereto, were advertisements referred to herein, which failed:

1. To disclose the name or names of the animal or animals that produced the fur contained in the fur product as set forth in the Fur Products Name Guide.

1738 FEDERAL TRADE COMMISSIO DECISIONS Decision and Order 60 F.

2. To disclose that fur products contained or were composcd of bleached, dyed or otherwise artificially colored fur, when such was the fact.

PAR. 10. In advertising fur products as aforesaid, respondents failed to set forth the term "Persian Lamb ' in the manner requi.red, in violation of Rule 8 of the Rules and Regulations promulgated under the Fur Products Laheling Act.

PAR. 11. In advertising fur products as aforesaid, respondents fail cd to set forth the term "Dyed Mouton Lamb" in the manner required, in violation of Rule 9 of said Rules and Regulations. PAR. 12. In advertising fur products for sale as aforesaid, respondents failed to disclose that fur products were composed in whole or in substantial part of flanks, when such was the fact, in violation of Rule 20(a) of said Rules and Regulations.

PAR. 13. In advertising fur products as aforesaid, respondents failed to set forth all the parts of the information required under Section 5(a) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder in type of equal size and conspicuousness and in close proximity with each other, in violation of Rule 38(a) of said Rules and Regulations.

PAR. 14. The aforesaid acts and practices of respondents, as herein alleged, are in violation of the Fur Products LabcEng Act and the Rules and Regu1atio118 promulgated thereunder and const.itute unfair and deceptive acts and practices and unfair methods of competition in commerce under the Federal Trade Commission Act. DECISIO AND Order The Commission having heretofore determined to issue its complaint charging the respondents named in the capticn hereof with violation of the Federal Trade Commission Act. and the Fur Products Labeling Act, and the respondents having been served "with notice of said determination and with a copy of the. complaint the Commission intended to issue, together with n, proposed form of order; and The respondents and counsel for the Commission having thereafter executed an agreement containing fl. consent order, an admission by tho respondents of alj the jurisdictional facts sct forth in tho complaint to issue herein, a statement that the signing of said agreement is Jar sett)emell purposes only and does not constitut.e an admission by respondents that the law has hecn violated as set forth in such complaint, and waivers and provisions as required by the Commis sion s rules; nnd DQl\ENFELD' S INC. ) ET AL. 1739 1734 Decision and Order The Commission, having considered the agreement, hereby accepts same, issues its complaint in the form contemplated by said agreement makes the following jurisdicti.oral findings, and enters the following order:

1. Respondent, Donenfelcl' , Inc., is a corporation organized, existing and doing business under and by virtue of the hv-ys of the State of Ohio, with its offce and principal place of business located at 35 North Main Street, Dayton, Ohio.

Respondents Ralph Doncnfeld and Stanley R. Donenfeld are Vice- President and Secretary-Treasurer, respectively, of said corporation and their address is the same as that. of said corpora6on. 2. The Federal Trllc1e 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 Donenf( ld' , Inc. l curpor.ation, and its ofiicers, and Ralph Donenfeld and Stanley It Donenfeld, individlHll1y and as offcers of said corporation, and respondents' representatives, agents) and employees directly or tlll'ough any corporate or other device, in cOllnection with the introduction into C0l11nCrCe, or tJH sale, advertising! or offering for sale in commerce, or the tranSpOl'L,ltion or distribution in c.ommeree, of any fur product; or in connection with the sale, advertising, oJIel'ing Jor sale, tnl1sportation, or distribution, of any fur proc1uc. l1,hioh is made in whole or in part of fur which has been shipped and received in commerce, as "commerce fur" and "fur product:) arc de,lined in the Fur Products Labeling Act, do forthwith cen.se and desist from:

1. J:.fishranding fur products by:

A. Failing' to aflix labels to fur products showing in words and figures plainly legible all the information required to be disclosed by e.ach of tho subsections of Section '1(2) of the Fur Products Laheling Act.

B. Falsely or deceptively labeling 01' otherwise falsely or deceptiveiv ident.i-lrin ' any such lJloduct as to the country of origin of imported furs used in the fur product.

C. Setting forth on labels aflxecl to inr products: (1) Information required under Section '1(2) of the Fur Products Labeling Act and the Rules ancll egulat.olls promulgated thereunder in abbre.viated form.

(2) 1nfonmltion required nndel" Section 4(2) of the Fur Products La.beling Act and the Rules and I1egulations t.hereunder, mingled with non-required information.

1740 FEDERAL TRADE COM:\fISSIO T DECISIOXS Decision and Order 60 F.

(3) Infonmltion required Ullder Section 4(2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder in handwriting.

D. Failing to show that fur products are eomposerl in whoJe or snbstantial part of flanks, when such is the fact. E. Affxing to fur jJrodncts Jabels that do not comply with the minimum size requirements or one and three-CJuartcI' inches by t.wo and three-quarter inches.

F. Failing to set. forth the inform.ation required by Section 4(2) of the Fur Products Labeling Act and the RIdes and Regulations promulgated thereunder in the. required sequence in accordance with Rule 30 of the aforesaid Eules and Regulations. G. Failing to set forth separately on labels attached to fnr products composed or two or more sectiolls contflining different animal rurs the infor1nation required under Section 4 (2) of the Fm Products Labeling Act and the Rules and R.egulations promulgated thereunder with respect to the rur comprising each section. H. Failing to set forth on labels the item number or math: assigned to " fur product.

2. Falsely or deceptive,ly invoicing fnr products by: A. Failing to furnish invoices to purchasers.of fur products showing in ,words and figures plainly legible all the information required to be disclosed by each of the subsections of Section 5 (b) (1) of the Fur Products Labeling Act.

B. Setting forth information required under Section 5(10) (1) of the Fur Products Labeling Act and the Hules and Regnlations promulgated thereunder ill abbreviated form.

C. Failing to set forth the term "Persian Lamb" in the manner required where an ejection is maxle to use that term instead of the word "Lamb"

D. Failing to set forth the term "Dyed Mouton Lamb" in the manner required where ,an election is made to use that term instead of the term "Dyed Lamb"

E. Failing to show that fur products are composed in whole or subst.lntioJ part of flanks when su('h lS t.he fact.. F. Failing to set forth information required under Section 5(b) (1) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder with respect to each :"ection of fur products c.omposed of one or more sections cont.aining different animal furs. G. Failing' to set forth the item number or mark assigned to a fur product.

ILS.D. PUBLICATION:\S , INC. 1741 1734 Complaint 1-1. llepresf'ntillg' directly or by implication that the fur contained in fur products is natural, "hen such is not the fact. 3. Falsely or cleceptiyely a.advertising fur products through the use of any advertisement, representation, public announcement, or notice which is intended to aid, promote or assist, directly or indirectly, in the sale, or ofI'ring lor sale of fur products, and which: A. Fails to disclose in words and ligures plainly legihle all of the information required to be disclosed by each of the subsections of Section 5 (a) of the Fur Procincts Labeling Act. n. Fails to disclose that the fur product is composed in whole or in substantirll part of flanks, ,yhen such is the fact. C. Fails to set f.orth the term "Persian Lamb" in the manner required ,yhere all election is made to use that term instead of the ,vord Lamb"

D. Fails to set forth the term "D:yed :Mouton Lamb" in t,he manner instead of the term quired \\"here an election is made to use that term Dyed Lamb"

E. Fails to set forth all parts of in-ronnatiollrequired under Sectjon 5 (a) of the Fur Products Labeling- Act and the Rules and Regulations promul atcd thcrennc1er in type of equal size and conspicuousness and in close proximity with each other.

It i8 fVTthPT ol'lel'ed That the respondents herein shall within sixty (60) days after service upon them of this order, file with the Commission a report. in writing setting forth in detail the manner and form in which they have complied with this order. I X THE ),fair II. D. PUBLICATIONS. INC.

COXSRXT ORDBR ETC., IN REGARD TO THE ALLEGED VIOLA TION OF SEC. 2(d) OF THE OLAYTOX ACT , June, 1962 Docket 0-150. CU/Hp/.a'i-nt, June 1.9 19(J2-IJecis'ioH Consent oeder requiring the publisher of " Alfred Hitchcock's Mystery Magazine" in Ri yiera Beacll, Fla. , to cease paying promotional allowances to 01' some customers but not to theie competitors, in ,violation of Sec. 2(d) 661 to Union ews Co. , New the Clayton Act-such as a payment of $9 York City-and basing such allowan('es on individual negotiations resultng in proportionally UJwqual terms to even the favored customers. CO)IPLAINT The Federal Trade Commission having reason to believe that the party respondent named in the caption hereof and hereinafter more 1742 FEDERAL TRADE COMMISSION DECISIO:iS Complaint 60 F.

particularly designated and described, has violated and is now violating the provisions of subsection (d) of Section 2 of the Clayton Act (D. C. Title 15, Sec. 13), as amended hy the Robinson-Patman Act, hereby issues its complaint stating its charges with respect thereto as follows:

PARAGRAPH 1. Respondent H. D. Publications, Inc., is a corporation organized and doing business under the laws of the State of New York, with its offce and principal place of business located at 2441 Beach Court, Riviera Beach, Fla. Said respondent, among other things, has been engaged and is presently engaged in the business of publishing and distributing va.rious publications including magazines under copyrighted titles including "Alfred l-Iitchcock' Mystery Magazine . Responde.nt's sales of publications during the calendar year 1960 exceeded two hundred fifty thousand dollars. PAR. 2. Publications published by respondent are distributed by respondent to customers t.through its national distributor, Kable News Company, hereinafter referred to as Kable K ews. Kable N e"\1"8 has acted and is now acting a,s llfltional distributor for the publications of several independent publishers, including Tesponcl ent publisher. Kable News, as national distributor of publications published by respondent and other independent publishers, has performed and is now pCl'fonning various services for these publishers. Among the services performed and still being performed by liable News for the benefit of these publishers are the taking of purchl1se orders and the distributing, billing and collecting for such publications from customers. ICable X ews also had participated in the negotiation of various promotional arrangements with tho retail customers of said publishers, including said respondent.

In its capacity as national distributor for respondent in dealing with the customers of respondent, ICable News serve:d and is now serving as a conduit or intermediary for the sale' distribution and promotion of publications published by respondent. "Alfred Hitchcock' 1ystery 1iagazulc" is among the most popular and widely circulated mystery magazines in the. United States and is distributed throughout various States by Kable -, e-ws through loeaJ distributors to retail outlets.

PAR. 3. Respondent, through its conduit or intcr;:lcdiary, Kable Kews, has sold and distributed and now sells and distributes its is publications in substantial quantities in commerce, as "conm1crce" defined in the Clayton Act, as amended, to comp8tillg customers located throughout various States of the United States and in the District of Columbia.

D. PUBLICATIONS , INC. 1743 1741 Decision and Order PAR. 4. In the course and conduct of its business in commerce respondent has paid or contracted for the payment of something of value to or for the benefit of some of its customers as compensation or in consideration for services or facilities furnished, or contracted to be furnished, by or through such cust.omers in connection with the handling, sale, or offering for sale of publications sold to them by respondent. Such payments or allowances were not made available on proportionally equal terms to all other customers of respondent competing in the distribution or such publications. PAR. 5. As an example of the practices alleged herein, respondent has made pa.yments or a1Jowallces to certain ret.ail customers who operate cha.in retail outlets in railroad airport and bus terminals as well as outlets located in hotels and oilice buildings. Such payments or allmvanees were not offered or ot.herwise made available on proportionally (?qual terms to all other cnst'Jl1ers (including drug chfLins grocery ehnins and other llr,'T"sstanc1s) competing with the favored customers in the sale and distrilmticn of (h3 publications of respondent publishcl' Among the frrnwec1 C'clstomers receiving payments in 1960, and during the first six months of laGl ,which were not oiIered to other competing customers in connec.tioll with the purchase and sale of respondents pub) ication were: , Approximate amoUlt received Customer 1960 j 196IeJaIJ. June) Fred B::1"vey, ClJic,.go, 11L- ----_u_ ---_u____ $81.48In;er ti' tc Co., Los .-\rge1es, Calif_-- $204.9019u. 123. GreyJJlund Post Hou, Yarest PDrk, 11L_n_Vd(m Xews Co., Xow York Cit 107.526G1.00 i (Jan.52.1 , 1960- 1961). l June 30, Respondent made said payments to its favored customers on the basis of individual negotiations. Among said favored customers such payments were not made on proportionally equal terms. \H. 6. The acts and practices of respondent as alleged above are in violation of the provisions of subsection (d) of Section 2 of the CJ ayton Act as amended.

DECISION AXD ORDER The Commission IHlving heretofore determined to issue its complaint charging the respondent named in t.he caption hereof with violation of subsection (d) of Section 2 of the Clayton Act, as amended, and the respondent having been served with notice of sai.d determination and with a copy of the complaint the Commission intended to issue, together with a proposed form of order; and 1744 FEDERAL TRADE LY!ISSIOX DECISIONS Decision and Order GO F.

The respondent and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of aU the jurisdictional facts set forth in the complaint to issue herein, a stat.ement that the signing of said agreement is for settlement purposes only ana does not constitute an admission by respondent that the law has been violated as set forth in such complaint and "mive.rs an(l provisions as required hy the Commission s rules; and The Commission, h Living considered the agreement, hereby accepts same, issues its complaint in the form contemplated by said fLgreement makes the fonowing jurisdictional findings, and enters the fonowing order:

1. Respondent I-I.S.D. Publications, Inc., is a corporation organized existing and doing business under and hy virtue of the laws of the State of New Yark, with its offce and principal place of business located at 2441 Beach Court, in the city of Riviera Beach, State of Florida.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent. ORDER It is ordered That respondent H. D. Publications, Inc., a corporation, its offcers, employees, agents and represento.tives directly or through any corporate or other device, in connection with the distribution, sale or offering for sale of publicabons including magazines in commerce, as "commerce" is defined in the amended Clayton Act do forthwith cease and desist from:

Paying or contracting for the payment of an allowance or anything of value to, or for the- benefit of, ally customer as compensation or in consideration for any services or facilities furnished by or through such customer in connection with the handling, offering for salo, sale or distribution of publications including magazines published, sold or offered for sale by respondent, unless such payment or consideration is affrmatjvely offered nllrl otherwise made avaibble on proportionally equal terms to all of its other customers competing with slich favored cllstomer in the distribution of such publications including magazines.

The word "customer" as useel above shall be deemed to mean anyone who purchases from I-I.S.D. Publications, Inc., acting either as principal 01' agent, or from a distributor or wholesaler "where such transaction with such purchaser is essentiany a sale by such respondent, acting either as principal or agent.

NATIONAL POLICE GAZETTE CORP. 1745 1741 Complaint It is further 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 this order.