Associated Pest Control Services, Inc

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IN THE MATTER OF ASSOCIATED PEST COi\TROL SERVICES, INC., ET AL. CONSENT OIWER, ETC. , IN REGARD TO THE ALLEGED VIOLATION OF SECTION 2 (f) OF THE CLAYTON ACT Docket C 1638. Complaint NO"J , 26' 1969---Decision, Nov. ;26, 1969 Consent order requiring a Memphis, Tenn. , association of pest controllers to cea e inducing- and receiving discriminatory prices for pesticides and related products from suppliers of such products. COMPLAINT The Federal Trade Commission having reason to believe that the parties respondent named in the caption hereof, and hereinafter more particularly designated and described, have violated and are now violating the provisions of subsection (f) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act (D. C. Title 15, Section 13), hereby issues its complaint stating its charges with respect thereto as follows: PARAGRAPH 1. Respondent Associated Pest Control Services Inc., hereinafter referred to as "Associated " is a corporation organized, existing and doing business under and by virtue of the laws of tbe State of Tennessee, with its principal offce and place of business located at 1313 Poplar Avenue, Mempbis, Tennessee. Respondent Associated is an association of pest control organizations which was ostcnsib1y organized to further the interests and development of the members of the association, through tbe interchange of ideas, the dissen1ination of scientific information and other services and purposes incidental to the general welfare of its members. Its membership is comprised of persons, partnerships and corporations engaged in the performance of pest control, industrial sanitation and exterminating services. Associated also performs other services for its members, including the negotiation of discounts for its members from distributors of pesticides, application equipn1ent and other necessary supplies. Respondent Associated had approximately 37 members in October 1967, which members were located in 17 States of the United States, tbe Dominion of Canada, and the Bahamas. The membership of Associaied constitutes a class so nU111erous and changing as to make it impracticable to specifically name and describe each and all of sucb members as parties respondent herein. ASSOCIATED PEST COKTROL SERVICES , INC., ET AL. 699 698 Complaint Respondent Kotler Exterminating Co., Inc. , is a corporation organized, existing ann doing business under ano by virtue of the laws of the State of Tennessee with its principal offce and place of business located at 1313 Poplar Avenue, Memphis, Tennessee. 1t is a member of respondent Associated and is fairly representative of the entire membership of Associated. It is named as a respondent herein in its individual capacity and as representative of al1 members of respondent Associated. Al1 such members not named specifically are therefore made parties respondent herein as though the)' had been named individually. Respondent Louis 1. Kotler, 1313 Poplar Avenue, Memphis Tennessee, is an offcer of respondent Associated and the president of respondent Kotler Exterminating Co., Inc. He has been responsible, in part, for the direction m1d control of Associated. He is named as a respondent herein in his individual capacity, as an offcer of respondent Associateo m1d as tbe chief executive officer of respondent Kotler Exterminating Co., Inc. PAR. 2. The members of respon,)ent Associated have purchased and now purchase ill commerce from suppliers engaged in commerce numerous pesticides and ot.her sl1ppJies, such as application equipment, for use, consumption 01' resale within the United States. Said members ann saio suppliers cause the products and supplies so purchased to be shipped and transported among and between the several States of the United States, the Dominion of Canada, and the Bahamas from the respective State or States of location of said suppliers to the respective locations of said members of Associated. The members of respondent Associated and said suppliers are therefore engaged in commerce, as "commerce is defined in the Clayton Act.

PAR. 3. In the purchase, use and resale of said pesticides and supplies, the members of respondent Associated are in active competition ,with independent persons, partnershjps and corporations not affliated with reejJondent Associated; and the suppliers selling to said members of Associated and their independent competitors are in active competition with other suppjiers of similar products and supplies.

PAR. 4. Respondent Associated, since its formation in February 1959, has been and is now, maintained, managed and operated by its secretary-treasuer, respondent Louis 1. Kotler, for its membership and each member has participated in, approved, furthered or cooperated with respondent Louie 1. Kotler and the other mem- 700 FEDERAL TRADE COIVIVISSION DECISIONS Complaint 76 F.

bers of Associated in the carrying out of the procedures and activities hereinafter described.

In practice and effect, respondent Associated has been, and is now, serving as the medium or instrumentality by, through, or in conjunction with, which the said members of Associated exert the influence of their combined bargaining power on the competitive suppliers hereinbefore described. As a part of their operating procedure, said members of respondent Associated direct the attention of said suppliers to their aggregate purchasing power as a buying group and, by reason of such, have knowingly demanded and received, upon their individual purcbases, discriminatory prices, discounts, allowances, rebates and terms and conditions of sale. Suppliers not acceding to such demands are usually replaced as sources of supply for the commodities concerned and such market is closed to them, in whole or in substantial part, in favor of such suppliers as can be, and are, induced to afford the discriminatory prices, discounts, allowances, rebates, and terms and conditions of sale so demanded.

This procedure effects a discrimination in price on goods of like grade and quality between the members of respondent Associated and competing independent persons, partnerships and corporations whose discounts, allowances or rebates from such suppliers are based upon only their individual volumes. PAR. 5. Respondents have induced or received from their suppliers, in the the manner afore described, favorable prices, discounts, allowances, rebates, terms and conditions of sale which they knew or should have known constituted discriminations in price prohibited by subsection (a) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act. PAR. 6. The effect of knowing inducement or receipt by respondents of tbe discriminations in price, as above alleged, has been, and may be, substantially to lessen, injure, destroy or prevent competition between suppliers of pesticides and other supplies granting such discriminations and other suppliers of such products and supplies who do not grant or allow such discriminations, and also between respondent members and competing independent customers not receiving or securing such discriminations. PAR. 7. The foregoing acts and practices of respondents in knowingly inducing or receiving discriminations in price prohibited by subsection (a) of Section 2 of the Clayton Act, as amended by tbe Robinson-Patman Act, are in violation of subsection (f) of Section 2 of said Act.

ASSOCIATED PEST CONTROL SERVICES, INC., ET AL. 701 698 Decision und Order DECISION AND ORDER The Commission baving heretofore determined to issue its complaint charging the respondents named in the caption hereof with violation of subsection (f) of Section 2 of thc Clayton Act, as amended, 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 a proposed form of order; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by tbe respondents of all the jurisdictional facts set forth in the complaint to issue herein, a statement that the signing of said agreement is for settement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission s Rules; and The Commission having considered the agreement and having accepted same, and the agreement containing consent order having thereupon been placed on tbe public record for a period of thirty (30) days, now in further conformity with the procedure prescribed in !) 2. 31 (b) of its Rules, the Commission hereby issues its complaint in the form contemplated by said agreement makes tbe following jurisdictional findings, and enters the following order:

1. Respondent Associated Pest Control Services, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Tennessee, with its principal offce and place of business located at 1313 Poplar Avenue, :'demphis, Tennessee.

Respondent Kotler Exterminating Co. , Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of Tennessee, with its principal offce and place of business located at 1313 Poplar Avenue, Memphis, Tennessee. It is a member of Associated and is fairly representative of the entire membership of Associated.

Respondent Louis r. Kotler is an offcer of Associated and is president of Kotler Exterminating Co., Inc. He has been responsible in part, for the direction and control of Associated. His address is the same as that of said corporations. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents. 702 FEDERAL TRADE COMIVISSION DECISIOKS Decision and Order 76 F.

ORDER It is oi'dered That respondents Associated Pest Control Services, Inc. , a corporation, Kotler Exterminating Co. , Inc. , a corporation, individually and as a mernber of and as representative of the entire membership of Associated Pest Control ,serv.. ices, Inc., all other members of Associated Pest Control Services Inc., and Louis 1. Kotler, inclivic1ually and as an offcer of respondents Associated Pest Control Services, Inc. , and Kotler Exterminating Co. , Inc., their respe dive successors and assigns, officers, agents, representatives, em_plo Tees :md Dlembers, directly or through any corporate 01' other device, in connection with the offering to purchase or purchase of Eny pesticides and other supplies, such as application equijJ ent. in commerce, as "commerce is defined in the Clayton Act, ;\S f\i;i'mded, do forthwith cease and desist from:

Directly or indirectly induci Ilg' and receiving, receiving or 8,f'cepting any discrimination in the price of such products by accepting from any seller a net price respondents kno\v 01' should know is below the net price at whch said products of like grade and quality are being sold by sudl seller to other purchasers \vhere resporlrlents are conlpeting with the purchaser paying the higher price or with a customer of the purchaser paying the higber price.

For the purpose of determining the "net price" under the terms of this order, there shall be taken into account all discounts or other terms and conditions of sale by which net prices are affected.

It is " oj'dcnd That the respondent corporation, Associ- fur/he' ated Pest Control Services, Inc., shall fonvith distribute a copy of this order to each of its members.

It is fu,.ther onlered That respondents notify the Commission at least 30 days prior to any proposed change in the corporate respondents such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in the corporation, which may affect compljance oblig-ations arising out of the order. It is furthe;- ordered That tle respondents berein 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. KEENhY BROTHERS FARIVS, ET AL. 703 703 Complaint