Kaiser Industries Corporation

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IN THE MATTER OF KAISER INDDSTRIES CORPORATION ET AI,.

('ImEH , ETC. , IX TIEGAIm TO J.ALLEGED VIOLATION or SEC, , OF THE CLAYTON ACT Docket 83,11. Complaint, JlaT. 1961* Dccision, AlItJ. il, 1968 Order dismissing, as lacking public interest, complaint charging the second largest producer of steel in the 'Vestern States with violation of Sec. 7 of the Clayton Act by its acquisition of the largest independent fabricator and erector of structural steel in Arizona.

CO:\IPLAIN1' The Federal Trade Commission, having reason to believe that the above-named respondents have violated, and are now violating, the provisions of Section 7 of the amended Clayton Act (l:. C. Title , Sec. 18), hereby issl1es its complaint pursuant to Section 11 of the aforesaid Act (D. C. Title 15, Sec. 21), charging as follows: PARAGIL4.PH 1. Respondent I\.aiser Industries Corporation, hereinafter sometimes referred to a.s "J(aiser Industries, is a corporation organized and existing under the laws of the Stat.e of Nevada. was incorporated on August 9 19. , and has since undergone several name changes, its present name having been adopted on farch 14 1956. Its main offce and principal place of business is located in the Kaiser Center, 300 Lakeside Drive, Oakland, California. Respondent Henry J. l\:aiser Company, hereinafter sometimes referred to as "Kaiser Company, is a corporation organized and existing under the la ws other Sta te of Nevada. It was incorporated on December 30, 1941. Its main offce and principal place of business located in the Kaiser Center, 300 Lakeside Drive, Oakland, California. Respondent E::a.iser Aluminum & Chemica.l Corporation, hereinafter sometimes referred to as "l\.aiser Aluminum:' is a corporation organized and existing under the laws of the State of Delfware. It was incorporated on December rJ, 1940, and has since undergone several name cha.nges, its present name having been adopted on November 28, 1949. Its main offce and principal place of business is located in the Kaiser Center, 300 Lakeside Drive, Oakland California.

Respondent l\:aiser Steel Corporation, hereinafter sometimes re. fen' ed to as "lCaiser Steel':' is a corporation organized and existing under the Jaws of the State of Nevada. It was incorporated December 1 .As amended Ja.n. 9, 1962.

402 FEDERAL TIL-\DE: COMYIrS'SION DECISIOKS COBlvlaint 63 F.

1941. Its main offce and principal place of business is located in thc Kaiser Center, 300 Lakeside Drive, Oakland, California. PAR. 2. Kaiser Industries conducts its business both through direct operations and through ownership of stock in certain subsidiary and affliated corporations. Those subsidiary and affliated corporations include, among others, the respondents Kaiser Company, Kaiser Aluminum and I\aiser Steel. Kaiser Industries directs, controls, and for the purposes of this proceeding is responsible and liable for the acts, practices and policies or these subsidiary a.ncl affliated companies. PAR. 3. Kaiser Company, a wholly owned subsidiary of Kaiser Industries, conducts business both through direct operation and through ownership of stock in certain subsidiary and affliated cor porations. These subsidiary and affliated corporate.ions include among others, the respondents Kaiser Alum inurn and ICaiser Steel. In the conduct or its business, Kaiser Company acts 1'01' and on behalf or Kaiser Industries.

PAn. 4. ICaiser Aluminum is engaged in the production, manufacture, iabrication, erection, sale and distribution of aluminum and aluminum products. It is the third largest producer of priTnary aluminum in the United States. Its 1959 primary aluminum capacity of 609 000 tons, represented an increase of 3259'0 since 1950 and constituted over 309' of the total national capacity. It is also a subsbtTltial producer of fabricated aluminum products, consisting of among others, aluminum sheet, electrical conductor, rod and bar extrusions, foil, foil food containers and forgings. Its products are marketed jn major cities throughout the United States. Kaiser Aluminum first entered the aluminum business in 1946 through the acquisition of three pia.uts irOll1 the Federal government. In 185G Kaiser Aluminum acquired Foil-l\:raft, Inc., of Los Angeles California, a fabricator of aluminum containers for frozen food: and Hokin Aluminum Co., of Chicago, Illnois, a fabricator of aluminUl sheet and other products. Since 1946 Kaiser Aluminum has followed a consistent pattern of grm\'th due in part to acquisition and mergers. For t.he year ending December 31, 1959, Kaiser Aluminum had a net income of $22 328 000 based on net sales of $435 550 000, and the 379' of thecorporation s assets totaled $785 976 000. Approximately voting securities of l\.aiser Alumi.num are owned by I\.aiscI' CompanYj and approximately 8% are owned by Kaiser Industries. PAR. 5. Kaiser St.eel is engaged in the production, manufacture fabrication, erection, sa.le and distribution of steel a.nd steel products. It is thc second largest producer of steel in the "'Yes tern States and ranks ninth among steel producers in the United States. Its fac.ilities loell\ed at Fontana, California, constitute the Oldy fully integraced . .

403 KAISER ll DUSTRIES CORP. ET AL. 401 Cumplaint served bysteel plant on the Pacific Coast. The Fonlam, pllmt is large iron ore and coal reserves, owned in fee, and produces a chversIfied line of steel products, including phltes, tubuhr products, carbon and alloy bars, hot and cold rolled strips, hot rolled sheets and strucproducts are sold to various purchaserstural shapes. These inc1udino- fabricators, throughout the western part of the United l\:aiser Steel, both through acquisi-St.ates. Since its incorporation, tions and internal growth, has consistently expanded its production manufacture, fabrication, sa.1e and distribution of steel and steel products in its various marketing areas.

In larch 1951 Kaiser Steel merged with Utah Fuel Company and Book Cliffs Coal Corporation. In February 1955 it purchased from Union Steel Company facilities for fabricating finished steel products located at Montebel1o, California. As a I'esult of this acquisition Ka,iser Steel became engaged, for the first time, in the fabrication and erection of structural steel and the manufacture of associated steel products. In May 1955 it purchased the Steel Division of Basalt Rock Company, consisting of two fabricating plants locatell at Napa ELnd Fontana, California, and certain pipe mills. For the year ending December 31 , 1958, Kaiser Steel had a net profit of $5 422 000 based on net saJos of $181 179 000, and the corporation s asscts totaled $481 D50 000. In 1957 Kaiser Steel's net sales of fabricated steel products exceeded $20 000 000. Approximately 80% of the voting securities of Kaiser Steel are owned by Kaiser Company.

PAn. 6. Each of the re.spondents Ham.ed herein is engaged in commerce as "commerce" is defined in the Clayton Act. PAR. 7. Allison Steel :M:manufacturing Company, hereinafter referred to as "Allison, is a corporation organized and existing under the laws of the State of ArizOlm. Its main offce and principal place of business is located at 19th A venue and Southern Pacific Tracks Phoenix, Arizona.

, sale Allison is engaged in the manufachue, fabrication, erection and distribution of steel and aluminum products in commerce, as commerce" is defmed in the Clayton Act. It operates a completely modern manufacturing and fabricating plant which covers approximately 35 acres and inc.udes over 400 000 square feet under roof. It has complete facilities for the fabrication and erection of stTnctural steel and structural aluminum. l\lost of its business is done by sDccial contr ct wh reby All son is a Yarded contracts on the basis of public or pnvate lnds submltted to cllstomers which include, among others genera.! COl1tnLCtors, mining companies, enginee.ring companies and Federal, state and city agencies.

404 FEDETIAL TRu DE COl\:DISS'ION DECISIOXS Complaint 63 F.'r.

Allison is also a jobber and \varehouser for certain types 'Of manufact.ured metal products. In addition it does miscellaneous other work, including, among ot.hers, the manufacturing of derricks, cranes heavy truck ttnd bus bodies; fabrication of reinforcing steel; and work on special government contracts.

Prior to Iay 1958 ADison ,,'as the largest independent fabricator and erector of structural steel in the Stn,ie of Arizona and had accounted for approximfLtcly 40% of such business in that State. In Iaricopa County, Arizona (which includes the City of Phoenix), it has accounted for as much as tjOo/ of such business. Early in 1957 Allison diversified its activities by entering the field of fabrication of Aluminum along heavy and strueturallines. "\Within six months Allison s product line w;s constituted as follo\vs: fabrication and erection of structural steel, 56%, and of structural aluminum, 19%; and fabrication of other steel products, 19%, and of ot.her aluminum products, 6%. By .July 1957 Allison was one of the largest independent fabricators of structural aluminum and other aluminum products in the State of Arizona and in :.Iaricopa County, Arizona. Allison has also performed contracts for the fabrication and erection of steel and aluminum in, among others, the States of K ew :t\mexico, Colorado evada, and California.

The basie raw materials which are purchased for the fabrication and erection of structural steel and structural aluminum and the manufacture of associated steel and aluminum products are obtained primarily from stecl and a.luminum producers located in the western part of the United Sto.tes, including Kaiser Steel and Kaiser Aluminum.

For the year 1958 AJJison had a net income of $236 932 based on total sales of $10 006 626 and its total assets were $4 822 148. PAR. 8. On or about May 15, 1958, Kaiser Steel acquired approximately 45% of the outstanding capital stock, which is the voting stock, of Allison for a total consideration of $1 112 960. Subsequent to the date of this acquisition, at leltst two e,xecutives of the Kaiser interests were elected to the Board of Directors of Allison. PAR. 9. The fabrication and erection of structural steel and structural aluminum and the manufacture of associated stecl and alllmiumll products by independent non-integrated fabricators are industries of great importance to the economy of the -enited States. In recent years a substantial number of acquisitions and mergers of non-integrated fabricators by integrated producers of primary steel and aluminum has led to a serious trend toward concentration in a few largo companies tending to lessen competition and develop monopolistic industry conditions.

KAISER I DUSTRIES CORP. ET AL. 405 401 Complaint \R. 10. Prior to the acquisition of the AJJison stock, as set forth in Para,graph 8, the Kaiser interests, particularly I\.a.iser Steel and Kaiser Alumi111111, were actual and potential competitors with others in supplying rrrimary steel a,nd aluminum to Allison and were actual or potential compet.itors with Allison in the fabrication and erection of structural steel and structural aluminum and in the manufa,cture of other steel and aluminum product PAIL 11. The respondents have violated, and are now violating, Section 7 of the amended Cla,ytOl1 Act in that the acquisition of a substantial portion of the voting stock of Allison, as hereinbefore described, may have the effect of su11stantially lessening competition steel a.ndor tending to create a monopoly in the sale of primary aluminum and in the fabrication and erection of structural steel and steel andstructural aluminum and in the manufacture of other aluminum products in Iaricopa County, Arizona the State of Arihona, or in other sections of the country, in the following ways, among others:

1. Actual and potential competition in the supply of primary steel substantially lessened.and aluminum to Allison has been, or may be, 2. Actual and potential competition in the fabrication and erection of structural steel and ::trnctural aluminum and in the manufacture of other steel and aluminum products has been or may be substantially lessened.

:J. Actual and potential competition between the respondents and Allison in the fabrication and erection of structural steel and structural aJuminmn and the manufacture of other steel and aluminum products has been or may be eliminated.

4. The respondents' competitive advantage over other fabricators ancl ETcctors of structural steel and structural aluminum and manufllcturers of other steel and aluminum products has been or ma,y be enhanced t.o the detriment of actual and potential competition. 5. Iergers and acquisitions on the part of ot.her producers of primary steel and aluminum, and on the part of other fabricators and erectors of structural steel and structural aluminum and manufacturers of other steel and aluminum products, have been or may be fostered, with a consequent increase in concentration and tendency toward monopoly, to the detriment of actual and potential competition.

6. The respondents competitive advantage as integrated producers manufacturers, fabricators, and erectors of structural steel and structural aluminum and ot.her steel and aluminum products, and as suppliers of materials to non-integrated fabricators and erectors has 7S0-01S--69-g.

406 FEDERAL TR DE CO::1JSSIO DECISIO Syl1abns 63 F.

been or may be enhanced to the detriment of actual and potential competition.

7. Allison has been eliminated as the largest independent fabricator and erector of structural steel in the State of Arizona. 8. Allison has been eliminated as one of the largest independent fabricators and erectors of structural aluminum in the State of Arizona.

PAR. 12. The foregoing acquisitions, acts and practices of the respondents, as hereinbefore allegcd and set out, constitute a violation of Section 7 of the Clayton Act (V. C. Title 15, Sec. 18), as amended and a.approved December 30 , 1950.

ORDER DIS IIssnw COMPLAINT Complaint counsel having fied on .July 26, 1963, a motion to dismiss the complaint in this matter; and It appearing that this matter is now before thc Commission, having been removed from the jurisdiction of the hearing examiner and placed on suspcnse by the Commission s orders of February 7 and June 21 , 1963; and It further appearing, for the reasons set out in the motion complaint counsel, tha.t further proceedings in this matter would not be in the public interest;

It is ordered TJHtt the complaint be, and it hereby is dismissed. IN THB iair OF JONAS BROTHERS OF SEATTLE, INC., ET AI,.

COKSENT ORDER, ETC. , IX REGARD TO THE ALLEGED VIOLATION OF THE FEDER.tll TRADE C01l0IJSSlON AND T1: F"C PRODUCTS LABELING ACTS Docket Complail1t, Aug. 1963-Dce-i8iuH, Au Consent order refjuiring manufacturing furriers ,dtb principal place of business in Seattle, Wash., and two branch stores in Anchorage and Fairbanks Alaska, to cease violating the Fur Products Labeling Act by failng, in labeling, invoicing and advertising, to show the true animal name of fur in fur products and when fur was artificially colored, and to use the terms Dyed Mouton Lamb" and "natural" as requjred; failng, in invoicing and advertising, to show the country of origin of imported furs; representing falsely, in newspaper advertising, that prices of fur products were reduced from so-called "regular" prices which were fictitious; failng to maintain adequate records disclosing the facts on which pricing claims , AS BROTHERS OF SEATTLE , IXC. , ET AL, 407 40fi Complai.nt were based; substituting nonconforming labels for those affxed by the manufacturer or distributor; add failing in other respects to comply with requirements of the Act.

COMPLAINT Pursuant to the provisions of the r;'eclera.l Trade C0l111Ilissioll Act and the Fur Products Labeling Act and by virtue of the authority vested in it by said Acts, the Federal Trade Commission having reason to believe that tT onas Brothers of Seattle, Inc., a corporation and Jonas Brothers of Alaska, Inc., a corpomtion, and A. C. Bert KJincburger, Peter Bading and Chris Klineburger, individually and as offcers of the said corporations, 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 interest, hereby issues its complaint stating its charges in that respect as follows:

P AHAGRAl'H 1. Respondent Jonas Brothers of Seattle, Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of W ashington. Respondent .J onas Brothers of Alaska, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Alask..

Respondents A. C. Bert Klineburger, Peter Bading and Chris IOineburger are offcers of the corporate respondent and fonnulate direct and control the acts, practices and policies of the said corporate respondents including those hereinafter set forth. The respondents are manufacturers, dist.ributors and retailers of fur product.s with their offce a.nd principal.l place of business located at 1507 Twelfth A venue, Seattle, IVashi 6rton. Respondent Jonas Brot.hers 01' Alaska, Inc., operates two branch stores; one located at Fifth and G Streets, in Anchorage, Alaska and the ot.her at 203 Cushman Street, in Fairbanks, Alaska. PAR. 2. Subsequent to the ciIective date of the Fur Products Labeling Act on August 9 1952, respondents have been and arc now engaged in the introduction into commerce, and )n the manufacture for introduction into commerce, and in the sa.le, advertising, and offering for sale in commerce, and in the transportation and distribution in commerce, of fur products j and have manufactured for sale, sold advertised, offered for sa.le transported and djstributed fur products which have been made in '\",hole or in part of furs which have been shipped and received jn commerce as the terms "commerce fur and " fur product" are defined in the Fur Products Labeling Act. 408 FEDERAL TR!.A.DE CO.\DnSSION DECISIOXS Complaint G3 F.

\R. 3. Certain of said fur products were Inisbranded in that they were not labeled as required under the provisions of Section 4(2) of the Fur IJroc1ucts Labeling Act and in the manner and form prescribed by the Rules and R,egulations promulgated thereunder. AUiOng such misbranded fur products; but not limited thereto, were fur products ,with labels which fa,ilcd:

1. To show the true animal name of the fur used in the fur product.

2. To disclose that the fur contained in the fur product was bleached, dyed, or otherwise artificially colored, when such "was the fact.

PAR. 4. Certain of said fur products were misbranded in that labels ttrLChed thereto, set forth the name of an animal other than t.he lliunc of the animal that produced t.he fur from which the saiel fur products had been manufactured, in violation of Section 4(3) of the Fur J)roducts Labeling Act and the Rules and Regulations promulgated thereunder.

PAR. 5. Certain of said fur products were mishranded in violation of the Fur Products Labeling Act in that they were not labeled in ac;cordanee with the ItuJes and Regulat.ions promulgat.ed thereunder in the following respects:

(a) The term "Dyed J\Louton Lamb" was not set forth on labels in the manner required by law, in violation of Rule 9 of said Rules and Regulations.

(b) The term "natural" was not used on labels to describe fur products "which were not pointed, bleached, dyed, tip-dyed, or otherwise artilicially colored, in violation of Rule 19 (g) of said Rules and Regulations.

(c) Information required under Section 4(2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder was not completely set out on one side of labels, in violation of Rule 29(a) of said Rules and Regulations.

(d) Information required Ullder Section 4(2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder was set forth in handwriting on labels, in violation of Rule 29(b) of said rules and Regulations.

(e) Information required under Section 4(2) of the Fur Products Labeling Act and the Hules and Regulations promulgated thereunder was not set, forth in the required sequence, in violation of Rule 30 of said 1lures 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 separately on labels with respect to each section TOi\1,AS BROTHERS OF SE,ATTLE.. INC. ) E:T AL. 409 406 CompJnilit of fur products composed or two or more sections containing different animal furs, in violation of Rule 36 of said Rules and Regulations. PAR. 6. Certain of said fur products were falsely and deceptively invoiced by the respondent in that they were not invoice as required by Section 5(10) (1) of the Fur Products Labeling Act and the Rules and Hegulations promulgated under such Act. Among such falsely and deceptively invoiced fur products, but not limited thereto, were fur products covered by invoices which railed: 1. To show the true animal name of the fur used in the fur product. 2. To disclose that the fur contained in the fur product was bleached, dyed, or otherwise artificially colored, when such was the fact.

3. To shmv the country of origin or imported furs used in fur products.

PAIL 7. Certain of said fur products were falsely and deceptively invoiced in violation of the Fur Products Labeling Act in that they were not invoiced in accordaTlce with the Rules and R.egulations promulgated thereunder in the following respects: (a) Information required under Section 5(10) (1) of the Fur Products L.labeling Act and the Bules and Hegulations promulgated t hereunder was set forth on invoices in abbreviated form, in violation of Hule "1 of said Rules and Regulations.

(b) The terIl "Dyed Mouton Lamb" was not set forth on invoices in the manner required by Ja"', in violation of Rule 9 of said Bules ancl Regulations.

(c) The term "natural" was not used on invoices to describe fur products which were not pointed, bleached, dyed, tip-dyed or other- ,,'iso artificially colored, in violation of rule 19 (g) of said rules and Hegulations.

(el) Information l'equireel under Section 5(10) (1) of the Fur Products Labeling Act and the Rules and H,egulations promulgated thereunder \yas 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 or Rule 36 of said Hules and Regulations.

(e) Hcquired itenl numbers were not set forth on invoices, in violation of Rule 110 of said Hules and Regulations. u:. 8. Certain of said fur products were falsely and deceptively advertised in "violajion OT the Fur Products Labeling Act in that certain ac1vertisernents intended to aid, promote and assist, rn- 1'8ctJ:-" or indirectly, in the sale and oiIering for sale of such fur products \'Iere not in acconlnnce with the pro\:isions of Section 5 (a) of the said Act.

410 J;EDl' RAL TTI11.,DE COM?lJI5;S10X DECISIONS Complaint 63 F.'r.

Among and included in the aforesaid advertisements hut not limited thereto, were advertiseme,nts of respondents \which appeared in issues of the Daily "N ews liner and Anchorage Times, newspapers pub. lished in t.he cities of Fairbanks and Anchorage, respectively, in the Staic of Alaska.

l\.among such fa.lse and deceptive advertisements, but not limited thereto, were advertisements which failed: 1. To show the true animal name of the fur used in the fur product. 2. To show that the fur contained in the fur product was bleached dyed, or otherwise al'tiiicial1y colored, when such was the fact. 3. To show the could1try of origin of imported furs contained in fur products.

PAn. 9. Bv means of the a.loresaid a,advertisements and others of similar import and meaning not specifically referred to herein respondents falsely and deceptively advertised fur products in violation of the Fur Products Labeling Act in that t.he said fur products were not advertised in accordance with the Hules and Regulations promulga,ted thereunder in the following respects: (:t) The term "Dyed Mouton Lamb" was not set forth in the manner rcqnil'ed in vioh,tion of Hule 9 of the said Rules and Regulations. (b) The tenn "natural" was not: used to describe fur products which ,' ere not pointed, bleached, dycc1 tip-dyed or otherwise artificially colored, in violation of Hnle 19(9) of the said Rules and Regulations.

(c) Information required under Section 5(a) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder was not set forth separately with respect to each section of :fur products composed of two or marc sect.lons containing different animal furs, in violation of Rule 3G of t.he ai'oresaid Hules and R.egulations. (d) All parts of the information required under Section 5 (a) of the Fur Products Labeling Act and the Rules and Regulations promulgated t.hereunder were not set forth in type of equal size and conspicuousness and jn close proximity with each other in violation of Trade 38 (a) of the aforesaid Rules and Hegulations. PM:. 10. By means of the nforrsaicl advertisements il.c1 other advertisement.s of similar import and meaning not specifically referred to herein, respondents falsely and deceptively advertised fur products in that sflid aclycrtismncnts Teprescnted that the prices of fur products 'iBrC reduced from regular or usual retail prices and that the amount of such prjce reductions afforded savings to the purchasers of respondents' products, when the so-calle.d regular or usual retail prices were in fact fictitious in that they were not the prices at which said merchandise was usually sold by respondents in the recent regular JONIAS BROTHERS OF :S.E1ATTL-E , INC. , E;r AL. 411 406 Decision and' Order course of business and the represented savings were not thereby a/forded to the purchasers, in violation of Section 5 (a) (5) of the Fur Products Labeling Act and Rule 44 (a) of the Rules and Regulations promulgated under the said Act.

PAR. 11. By means of t.he aforesaid advertisements and others of similar import and meaning not specifically referred to herein respondents falsely and deceptively advertised fur products in that the said advertisements contained representations, either directly or by implic.ation, that the prices of such fur products were reduced from the prices at which the respondents regularly and usually sold suell fur products in the recent regular course of business and the amount of such purported reduction constituted savings to the purchasers of respondents' products, wIlen in fact such fur products were not reduced jn price from the price at which the respondents regularly and usually sold such fur products and savings were not afl'orded purchasers of respondents ' products as represented. \R. 12. In ach-erbsing fur pl'odlH ts for sale, as a.:foresaid respondents made pricing claims and representations of the types covered by subsections (a), (b), (0) ,md (d) of Rule 44 of the Regu- Jations under the Fur Products Labeling Act. Respondents in making such claims and reprcscntations failed to maintain full and adequate records disclosing the facts upon which such pricing claims and representations erc based, in violation of Rule 4-1(e) of the said R,ules and liegulations.

PAR. 13. lLespondcnts in introducing, selling, advertising, and offering for sa.le, in commerce, and in processing for commerce fur products; and in selling, advertising, 'Offering for sale and processing fur products 'ivhich have been shipped and received in commerce, have misbranded such fur products by substituting thereon, labels which did not conform to the requirements of Section 4 of the Fur Products Labeling Act, for the labels affxed to said fur products by the ma.ufacturer or distributor pursuant to Section 4 of said Act, in violation of Section 3 (e) of said Act.

PAR. 14. The aforesaid acts and practices of respondents, as herein alleged, are in violation of the Fur Products Labeling Act and the R.ules and Regulations promulgated thereunder and constitute unfair and c1eceptiile acts and practices and unfair methods of competition in commerce under the Federal Trade Commission Act. DECISION AXD Ommn The Commission having heretofore determined to issue its complaint charging the respondents named in the caption hereof with , , 412 FEDERAL THIADE CO:\J1\ISS'IOX DECISIONS Decision and Order 63 F.

violation of the Federal Trade Commission Act and the Fur Products Labeling .Act, and 1.118 respondents having been served \with notice of Bejel determination and with a copy of the complaint the Commission intended to issue, together with a proposed form of order; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an a.admission by respondents of aJl the jurisdictional facts set forth in the complaint to issue herein, a statement that the signing of said agremnent is for settlement purposes only and does not constitute an admission by respondents that the law has been violated as set forth in such complaint, and "waivers and provisions as required by the Commission rules; and The Commission, having considered the agreement, hereby accepts same, issues its complaint in the form contemplated by said agreement, makes the following jurisdictional findings, and enters the following order:

1. Respondent, J onas Brothers of Seattle, Inc., is a. corporation organized, existing and doing business under and by virtue 'Of the laws of the State of W ashington.

Respondent Jonas Brotl1ers of Alaska, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Alaska.

Respondents, A. C. Bert Klineburger, Peter Hading and Chris Klineburgel' , are officers of said corporation. All respondents have their offce and principal place of business located at 1507 Twelfth A venue, Seattle, 1Yashington. 2. The :Federal Tra,de Commission has jurisdiction of the subject matter of this proceeding and of the re pondents, and the proceeding is in the public interest.

ORDER It is ordered That respondents Jonas Brothers of Seattle, Inc., a corporation, and its offcers, and Jonas Brothers of Alaska, Inc. , a corporation, and its officers, and A. C. Bert KJineburger, Peter Bacling and Chris KJineburger, individually and as offcers of said corporation and respondents representatives, agents and employees directly or through any corponlte or other device, in connection with the introduction or manufacture for introduction, into commerce, or the sale, advertising or oflering for sale in commerce, or the transpor tat-ion or clistribubon in commerce, of any fur product; or in connection 1\-ith the manufacture for sale, sale, advertising, offering for sale, transportd-tion 01' distribution, of any fur product which is made in whole or part of fur which has been shipped and received in JO?\AS BHOTHERS OF SE\..\TITLE'J INC., ET AL. 413 40G Decisioll and Ord-er commerce, as '" commerce fur" and "fur product" are defined in the Fur Products Labeling Act, do forthwith cease and desist from: A. Misbranding fur products by:

1. Failing to a.fix labels to fur products showing in words and in figures plainly lcgible all of the information required to be disclosed by each of the subsections of Section 4(2) of thc Fur Products Labeling Act.

2. Setting forth on labels attached to fur products the name 'Or names of any animal or animals other than the name of the animal producing the fur contained in the fur product as specified in the Fur Products Name Guide, and as prescribed by the Rules and Regulations.

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

4. Fa.filing to set forth the term "Natural" as part of the jnformation required to be disclosed on labels under the Fur Products Labeling Act and the Rules and Regulations promulgated thcreunder to describe fur products which are not pointed, bleached, dyed, tip-dyed, or otherwise artificially colored.

5. Failing to completely set out information required under Section 4(2) of the Fur Products Labeling Act and the Rules a.nd Hegulations thereW1der on one side of the labels affxed to fur products.

U. Setting forth infor1nation required under Section 4 (2) of the Fur Products Labeling Act and thc Rules and Regulations promulgated thereunder in handwriting on labels affxed to fur products.

7. Fa,Ding to set forth information required under Section 4(2) of the Fur Products Labeling Act and the Rules and Heg111a.tions promulgated thereunder on labels in the sequence req11ircd by Rule ;-)0 of the aforesaid Rules and Regulations.

s. Failing to set forth separately on labels attached to fur products composed of two or more sections containing different animal fur the information required under Section 4(2) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder with respect to the fur comprising each section.

B. Falsely or deceptively invoicing fur products by: 1. Failing to furnish invoices to purchasers of fur prod- 414 FEDERAL TRADE C01v1MISSION DECISIONS Decision and Order 83 F.

uets showing in words and figures plainly legible all the information required to be disclosed in each of the subsections of Section 5(b) (1) of the Fur Products Labeling Act. 2. Sctting forth information required under Section 5 (b) (1) of the Fur Products Laheling Act and the Rules and Regulations promulgated thereunder in abbreviated form. 3. Failing to set forth the term " Dyed Iouton La,mb" in tho lTfl-ner required wl1cre an election is made to use that term instead of the words "Dyed Lamb"

4. Failing to set forth the term "Natural" as part of the information required to be disclosed on invoices under the Fur Products Labeling Act and Rules and R.egulations promulgated thereunder to describe fur products which ate not pointed, bleached, dyed, tip dyed or otherwise artificially colored.

5. Failing to set forth separately information required under Section 5 (b) (1) of thc Fur Products Labeling Act nd Rules and R.egulatjons promulgated thereunder with respect to each section of fur products composed of two 'Or more sections containing different animal furs. 6. FfliJing to set forth on invoices the item number or mflrk a signed to fur products.

C. Fahmly or dcccptiveJy advertising fur products through the use of any advertisement, Tcpresenbltion, pubhc announcem!:mt or notice which :is intended to aid, promote or assist, directly or indirectly, in the sale, or offering for sale of any fur product, and which:

1. Fails to set forth in 1yorc1s and figures pbinly legible all the information required to be disclosed by each of the subsections of Section 5(a) of the Fur Products Labeling Act.

2. Fails to set forth the term "Dyed ;,fouton Lamb" in the manner required where an election is made to use that term instead of the words "Dyed Lamb"

3. Fails to set forth the term "!\ natural" as part of thc information required to be disclosed in advertisements under the Fur Products Labeling Act. and the Rules and Regula tions promulgated thereunder to describe fur products which arc not pointed, hleached, dyed, tip dyed or otherwise arti fieially colored.

4. Fa.ils to separately set forth in advertisements relating to fur products composed of two or more sections cont.ainjng different animal furs the information required under Section , INC., ET AL. 415 JOXLAS BROTHERS OF :SEtAT'TLE 406 Deeisioll and Order 5 (a) of the Fur Products Labeling Act and the Rules and Regulations promulgated thereunder with respect to the fur comprising each section.

5. Fails to set forth all 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.

6. Represents, directly or by implication, that any price when a-accompanied or unaccompa,nied by any desc.riptive lnnguage, was tile price at which the merchandise advertised was usually and customarily sold (at retail) by the respondents unless such advertised merchandise was in fact usually and cU8to11a,-ily sold at such price by respondents in the recent past.

7. :.lisrepresents in any manner the savings available to purchasers 'Of respondents' fur products.

8. Falsely or decept,ively represents in any manner that prices of respondents' fur products are reduced. 0. )Iakes claims and represe,ntatiol1s of the types covered by subsections (a), (b), (c) and (d) of Rule 44 of the Rules and Regulations promulgated under the Fur Products Labeling Act unless there arc maintained by respondents full and adequate records disclosing the facts upon which such claims and representations are based.

It is further ordered That respondents, Jonas Brothers of Seattle Inc., a corporation and J only Brothers of Alaska, Inc., a corporation and respondents' representatives, agents and employees, directly or through any corporate or ot.her device, in connection with the introduction, sale, advertising or offering for sale, in commerce, or the processing for commerce, of fur products; or in connection with the selling, advertising, offering for salc, or proc.essing of fur products which.h have been shipped and received in commerce, do forthwith cease and desist from misbranding fur products by substituting for the hlbels affxed to such fur products pursuant to Section 4 of the Fur Products Labeling Act hlbels which do not conform to the requirements of the afm'esaid Act and the Rules and Regulations promulgded thereunder.

ltt.s fiuthCi' oTdej' That each of the respondent.s herein shan within sixty (60) days after service upon them of this order, file with the Commission a report in \vrit.ing setting forth in detail the manner and form in which they have complied with this order. 416 FEDERAL TRi/\DE COM:?vfISSION DECISIOXS Complaint 63 P.