Westinghouse Electric Corporatiox

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IN THE l\:L TIER OF WESTINGHOUSE ELECTRIC CORPORATION COSSEN'l ORDER) ETC. , IN REGARD TO THE ALLEGED VIOLATION OF SEC. 2(a) OF THE Clayton ACT.

Docket S053. Compla-i.nt, July 20, 1.960-Decfsion, Sept. , 1963. Consent order requiring a manufacturer of electrical devices, equipment and supplies, to cease di criminating in price in violation of Sec. 2(a) or the Clayton Act by such vractkes as (1) granting to automotive replacement parts wholesalers who purchased in excess of $25 000 worth of its miniature and sealed-beam lamps in a contract year, an additional discount over that allo\ved to purchasers of smaller amounts; and (2) granting to General Motors Corporation, on purchases resold to car and truck dealers, in competition with replacement parts wholesalers, an additional discount to that allowed such wholesalers.

COMPLAINT The Federal Trade Commission, having reason to believe that the party respondent named in the caption hereof and hereinafter more part.icularly designated and described has violated and is now violating the provisions of subsection (a) of Section 2 of the Clayton Act as amended by the Robinson Patman Act, approved June 19, 1936 (U. C. Title 15, Sec. 13) hereby issues its complaint., stating its c.charge,s wi th respect thereto,o as follows: PARAGRAPH 1. Respondent '''Testinghollse Electric Corporation, is a corporation organized, existing and doing business under and by v-ir. tue of the la"s of the Commonwealth of Pennsylvania, with its principal offce located at 3 Gat.away Center, Pittsburgh, Pennsylvania. Respondents numerous divisions and corporate subsidiaries are vari- Ously located\ and engaged in the manufacture, saJe and distribut.ion *Onler mollifying Final Order. daterl Xov. 6. H)(J3 . p. G:n herein. 626 FEDERAL r \.DE CO),IMISSION DECISIONS. 63 F. Complaint of electrical devices, equipment and supplies. In 1956 the total value of products and services sold by respondent amounted to $1 525 375 771. One of the divisions of respondent is the Lamp Division. The Lamp Division is engaged in the manufacture, sale and distribution 'Of electric lamps of various kinds, including automotive miniature and sealed-beam lamps, which respondent seUs to various classes of customers.

Respondent in the course and conduct of its business as aforesaid competes \With other manufacturers and sellers of similar automotive miniature and sealed-beam lamps.

PAR. 2. Respondent in the course and conduct of its business as aforesaid, has caused and now causes, the said miniature and scaledbeam lamps to be shipped and transported from the States of location of its various places of business to the purchasers thereof located in States other than the States wherein said shipments originated. Said miniature and sealed-beam lamps have been, and are, sold to different purchasers for use or resale within the United States and the District of Columbia. In the sale of said miniature and sealed-beam lamps respondent has been, at aU times relevant herein, engaged in commerce, as "commerce': is defined in the Clayton Act. PAR. 3. Respondent., in the course and conduct of its business as aforesaid, has been, and now its, discriminating in price between different purchasers of its miniature and sealed-beam lamps of like grade and quality by seJJing said products at higher and less favorable prices to some purchasers than the same are sold to other purchasers many of whom have been, and now are, in competition with the purchasers paying the higher prices.

For example, among respondent's customers are automotive replacement parts wholesalers who purchase automotive miniature and sealed-beam lamps pursuant to the terms and conditions set forth in respondent' s "Distributor Franchise For Miniature and Sealed Beam Lamps, which is also identified as respondent's "Form DA" franchise. According to the terms a,nd conditions of the aforesaid distributor franchise miniature and sealed-beam lamps are sold to form DA distributors at prices appearing in the current "'Westinghouse Schedule of Net Prices to vV1lOlesalers-Automotive, ::\arine and Aircraft Lamps." Such prices are not discounted on orders of less than $250. On orders of 6250 or more for shipment in entirety at one time to one place a discount of 180/0 is granted from the prices appearing in the aforesaid price schedule. An additional discount is available, accordino" to the terms and conditions of the distributor franchise, as follows: If the Distributors net purchases of 1restinghouse Miniature and Sealed Beam Lamps during any contract year reach $25,000 net value, an additional discount WESTINGHOUSE ELECTRIC CORP. 627 625 Cumplaint at 5% at the net value of each invoice (after all other applicable discounts ex. cept cash discount have been deducted) wil be allowed and a retroactive credit adjustment wi1 be made on all net purchases during the contract year. In such cases the additional discount wil be allowed during the subsequent contract year.

The granting 'Of such an additional discount results in the charging of higher and Jess favorable prices to purchasers whose total annual dollar volume of purchases is less than $25 000. As of January 1 1957, respondent had executed DA franchises with 752 distributors of which 719 purchased1ess than $25 000 worth of miniature and seaJedbeam Jamps annually and 33 of which purchased $25 000, or more worth 'Of miniature and sealed-beam lamps annually. As another example, t.he General :Motors Corporation, through its AC Spark Plug Division, purchases for replncement resale antomotive miniature and sealed-beam lamps pursuant to the terms and conflitions of a negotiated contract. According to the terms and conditions of the aforesaid contract, automotive miniature and sealedbeam lamps are sold to the General :Motors Corporation at prices appearing in the current "tVestinghouse Schedule of JI et Prices to wholesalers-Automotive Marine and Ai,'craft Lamps" less cliscounts of 29.2%. Such automotive miniature and sealedhbeam lamps are then sold by the General lotors Corporate.ion, to Genera11Yot.ors car and truck dcaJers, in competition I\'il:h automotive replacement parts wholesalers.

The granting of such an additional discount, by respondent, to the General 1\lol:ors Corporation results in the charging of lower and more favomble prices to the General Motors Corporation than the higher and less favorable prices charged to other wholesaler purchasers competitive with the General :l\motors Corporation and who purchase from respondent pursuant to the terms and conditions set forth in respondent's "Distributor Franchise For l\finiature and Sealed Beam Lamps.

PAR. 4. The effect of respondent:s afon said discriminations in price between the said different purchasers of its said products of like grade and quality, sold in manner and method and for purposes as aforestated, may be to substantially lessen competition in t.he Jines of commerce in which the aforesaid favored purchasers arc engaged, or to injure, destroy, or prevent competition with said favored purchasers or with the custom rs of said favored purchasers. PAR. 5. The aforesaid acts and practices of respondent constitute violations of subsection (a) of Section 2 of the Clayton Act, as ;628 FEDERAL TRADE CO:\DnSSIOK DECISI01\S Initial Decision 63 F.

amended by the Uobinson-l:)atJnan Aet approved June 19, 1936 (U. G. Title 15, Sec. 13).

J1 r. Richard B. M ethia8 for the Commission. Oravath, Swaine Moore hy Mr. John D. Oalhoun ="ew York . Y., for respondent.

INITIAL DECISION BY LEON R. GROSS, HEARING EXA IIKER. JULY 24 , 19B2 The complaint med herein on July 20 , 1960, charges respondent "ith violating subsection (a) of Section 2 of the Clayton Act, as amended by the Robinson-Patmrm Act., by discriminating in price be.hveen different. plll'Cl1asers of its Hntomotive miniature and scaledbeam lamps of like grade and quality by selling said products at higher and Jess favorable prices to some purcha,sers than the same are sold to other purchasers, many of whom have been, and now are, in ,competition \"lth the purchasers paying the higher prices. On Au. gust 10, 1861, the parties to this proc.eeding filed with the Secretary of the Federal Trade Commission a notice of their intention to dispose ,of this proceeding by entering into an agreement containing It consent order to cease and desist, as then requirccl hy the Hules of Practice for AdjuClicative Proceedings. One July 16, 1%2, the parties submitted to the undersigned an agreement dated December 28, 1961 which purports to dispose of all the issues raised by t.he complaint herein as to all parties involved. Said agreement has been signed by the vice president of respondent corporation and by c0ll1sel for both pa.rties, and has DeJ'n approved by the Director of the Bureau of Restraint of Trade of this Commission. The said agreement was SllD- Jnitted to the n1Joye-namect hl'nl'l11g examinet for his consideration, in accon1rmce with 25 of the Commission s Rules of Practice for Adjudicative Proceedings published Iay 6 , 1953. I-tespanc1ent, pursuant tathe aforesaid agreement, has admitted all the jurisdictional facts alleged in the complaint and agreed that the record 111ay be taken as if findings of jurisdictional facts had been duJy made in accordance with such allegations. Said agreBmeIlt furt11e1' provides that respondent waives any further procedural steps before the hearing examiner Rnd the. Commission tllP making of findings of fact or conclusions of law, and all of the rights it may have to challenge or cont.est. the validity of the order to cease and desist entered in accordanee with such agreement. The parties have inter alia by such agreement covenanted:

1. The order to cease and desist issued in accordance with said agreement shall have the same force a.nd e,ffect as if entered after a lull hearing;

\VESTIKGHOUSE ELECTRIC CORP. 629 025 Initial Decision 2. The record on which the initial decision ancl the decision of tl1'2 Commission shall be based shall consist solely of the complaint andthisi. The complnintagreement;may be, used in construcing the 1:terms of said order:

4. The agreement is entered into subject to the condit.ion that the initial decision based thereon shall be stayed by the Commission unless and until the Commission disposes of Docket 1\0. 8514 (I'. 632 hereina by all order to cease and desist in substantially the same form as set fort.h herein: or by other appropriate order to cease and desist or of dismissal;

0. The agreement shan not become a part of the offcial record this proceeding unless anc1until it becomes a part of the decision of the Commission;

G. The complaint and t.he order to cease and desist to be entered in accordanco ,with the ngreeme.nt deal only wit.h soJes (i) by respondent of alltomoti,To miniature and sealed-beam lamps to customers engaged ill the resale or distribution of such lamps to the replac.ement trade nllll (ii) lor re.placement. purposes only; 7. The agre.ement is for settement purposes only and does not constitute an admission by respondent that it has violated the law as alleged in the complaint;

8. The follo\yjng order to cease and desist ma.y be entered in this proceeding by the Commission. It may be altered, modified or set aside in the manner PI'oviclec1 lor other orders. The term "purchaser as u ecl in the agreed u pan order to cease and desist herein shall induele any purchaser buying directly or indire.cly froni respondent: or a divisjon ubsic1iary OJ' aie1iatc of respondent by means or groupbll ing or any related dm-ice.

This proceeding hoxing now come on for fulal consideration on the complaint. and the aforesaid agreement of December 28, 1961 , coni aining consent orde.r, and it appearing that the order provided for in saiel agreement covers the allegations of the complaint and provides for an appropriate. disposition of this proceeding as to a.ll pa.rt.ies: the agreement 1S hereby accepted, pursuant to SS 3.2-1 and 3.25 of the Commission s R.ulcs of Practice for Adjudicative Proceedings published "lay 6, 1D55; ane! The undersigned hern'ing examiner ha.ving considered the complaint herein and the a.agreement and proposed order: and being of t.he opinion that. tho disposition of this proceeding by means of said agreement \will be in the public inte.rest., makes the follmying jurisdictional findings: and issues the following order.

iso-01S-- 630 FEDERAL TR'ADE C01nnSSION DECISIONS Fill::ll Or(lel' 63 F.

T"L RISDICTIO:NAL FINDINGS 1. The Fcderal Trade Commission has jurisdiction over the parties and the subject matter of this proceeding;

2. R.esponclent ,Vestillghouse Electric Corporation is a corporation existing and doing business under and by virtue of the la' s of the Commonwealth of Pennsylvania. The. principal offce of respondent is located at 3 Gat.away Center, Pittsburgh, Pennsylvania; 3. Respondent is engaged in commerce, as "commerce" is defined in the Clayton Act;

4. The complaint states a cause of action against said respondent under the Act hereinabove named, and this proceeding is in the public i:iiterest. Now, therefore 1 t is ordered That vVestinghouse Electric Corporation, a corporation, its ofiicers, representatives, agents and employees, directly or through any corporate or other device, in or in connection with the sale for replacement purposes, of automotive miniature and sealedbeam la,mps in commerce, as "commerce" is defined in the Clayton Act do forth wi th cease and desist from:

Discriminating, directly or indirectly, in the price of such automotive miniature and sealed-beam lamps of like grade and quality, by selling to any purchaser at net prices higher than the net prices charged any other purchaser who, in fact, competes in the resale and distribution of said products with t.he purcbaser paying the higher price.

FINAL ORDER S1TTE.:JBEH 1:: , 1DG3 By its order of August 13 , 1962, the Commission extended until further order the date on which the init.ial decision of the hearing exa,miner herein would become the decision of the Commission: and The Commission having determined that the conditions set forth in Paragraph 7 of the agreement upon which the initial decision is based have been fulfilled and having concluded that said initial decision is appropriate in all respects to dispose of this proceeding: I t is ordered That the initial decision of the hearing e,xo.mine1' filed July 24 , 19(j2, be, and it hereby is, adopted as the decision of the Commission.

It is lurther ordered. That re.spondent \VestinghOlli'e Electric CorporuJicn, a corporation, shall ,within sixty (60) days after sen ice 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 the order to cease and desist.

WESTI GHOUSE ELECTRIC CORP. 631 623 Final Order ORDER :MODIFYING FINAL ORDER NOVEl-IRER G , 18G, ponclent having moved the Commission to mOllify its Final for the purpose of incJnc1ing with-Order, issued September 12, 18B3, in the initial decision a paragraph inadvertently omitted therefrom said paragraph being an integral part of the agreement upon which the initial decision is based; and The Commission, after noting that counsel in support of tlle complaint does not oppose respondent's motion and, after duly considering said motion, having ueterminec1 that respondents request has merit and that good cause has been 8ho\"n in support thereof: It is ordered That this proceeding be, and it hereby is, reopened. It i8 JUTther ordered That the Commission s Final Order, issued September 12, 1963, be, and it hereby is, modified by striking the , in lieu thereof, sub-last t o paragraphs of said Final Order a.nu stituting the following pa.ragraphs:

It is ordered That the init.ial decision of .JnJy 24, 1962, be, and it hereby is, adopted as the decision of the Commission, except that said initial decision is modified by inserting the following paragraph as a subparagraph to paragraph 6 of the covenants of the parties:

For purposes of t.his agreement and the order t.o tense and desist to be entered in accurdance herewith, cllstOlners engaged in the resale or c1istribntion of alltomotjn, miniature and senJecl beam )amps to the replacement trade are defined as such types of customers as were or are (1) purchasing a,utomotive miniature and sealed-beam lamps from respondent under distributor franchise agreements \Ylth respondent and (ii) aut.omotive manufacturers purchasing for rephcement, rather than original instnJ1ation, purposes j ORDER It is ordered That \Vestinghouse Electric Corporation, a corporation, its offcers, representative, , agents and employees, directly or tht011gh any corporate or other devlc.e., in or in connec.holl with the sale for replacement purposes, of automotjye miniature ana sealed-beam lamps in commerce' , 3S "comnlerce: is dc fined in the Clayton Ad, do iortlndth cease and de ist from: Discriminating, directly 01' indirectly, in the prjce of such auto1l1otin:' , mil1iature and sca1ec1-beam lamps of like grade anll quality, by selling to any purchaser at net prices h;ghcr , .

632 FEDERAL TR, DE CQ:\I:JISS'IOX DECISIO='rS' Cumplaillt G3 F.

than the net prices charged any other purchaser who, in fact competes in the resale and distribution of said products "ith the purchaser paying the higher price.

It is JUT/her ordered That respondent Westinghouse Electric Corporation, a corporation, shall within sixty (60) clays after service upon it of the instant order, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has