Tingley Rubber Corp

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IN THE MATTER OF TINGLEY RUBBER CORP.

CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-3041. Complaint. Sept. )980-lJecision, Sept. )980 This consent order requires, among other things, a South Plainfield, N. manufacturer of molded rubber footwear to cease withholding cooperative advertising credits or allowances, or in any way limiting or restricting dealers from participating in any cooperative advertising program because of the resale price at which the dealer has advertised or sold a product; or because the dealer has used price comparisons in the advertising and sale of a product. Appearances For the Commission: Jerome S. Lamet. For the respondent: Allan J Weinschel, Wei!, Gotschal Manges, New York City.

COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act as amended, 15 U. G 41 et seq., and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Tingley Rubber Corp., hereinafter sometimes referred to as respondent, a corporation, has violated the provisions of said 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 as follows: For purposes of this complaint, the following definitions shall apply:

Product" is defined as any item which is manufactured, offered for sale or sold by respondent.

Dealer" is defined as any person, partnership, corporation or firm which purchases any product for retail sale. Resale Price" is defined as any price, price floor, price ceiling, price range, or any mark-up, formula or margin of profit used by any dealer for pricing any product. Such term includes, but is not limited to, any retail price suggested or established by respondent, any customary resale price or the retail price in effect at any dealer. Cooperative Advertising" is defined as advertising which invites the public to purchase respondent's products at dealer s place of TINGLEY RUBBER CORP. 341 340 Complaint. business, whether the cost of the advertising is borne by respondent alone or shared by dealer and/or wholesaler and respondent. PARAGRAPH L Respondent Tingley Rubber Corp. is a corporation organized, existing and doing business under and by virtue of the laws of the State of New Jersey, with its principal offce and place of business at 200 South Ave., South Plainfield, New Jersey. PAR. 2. Respondent is now, and for some time last past, has been engaged in the manufacture, advertising, offering for sale, sale and distribution of molded rubber footwear for men, women and children. Sales by respondent for fiscal year 1978 exceeded twelve millon dollars.

PAR. 3. Respondent maintains, and has maintained, a substantial course of business, including the acts and practices as hereinafter set forth, which are in or affect commerce, as "commerce" is defined in the Federal Trade Commission Act.

PAR. 4. Respondent sells and distributes its products to more than one hundred footwear wholesalers located throughout the United States who in turn resell respondent' s products to dealers. PAR. 5. Except to the extent that competition has been hindered, frustrated, lessened and eliminated, as set forth herein, in the course and conduct of its business, and at all times mentioned herein respondent has been, and now is, in substantial competition in or affecting commerce with corporations, firms and individuals engaged in the manufacture, advertising, offering for sale, sale and distribution of merchandise of the same general kind and nature as merchandise manufactured, advertised, offered for sale, sold and distributed by respondent.

PAR. 6. In the course and conduct of its business, as above described, respondent has for some time administered cooperative advertising programs which limit or restrict the rights of dealers to obtain cooperative advertising credits or allowances for any merchandise which has been:

a. Advertised at a sale price, at a discount price, at a promotional price, at a reduced price, at an off-price, or at a mark-down. b. Advertised at less than the suggested retail price, or at less than any minimum resale price.

c. Advertised using a price comparison.

PAR. 7. The administering by respondent of cooperative advertising programs or plans with any of the limitations or restrictions described in Paragraph Six hereinabove has the capacity, tendency and effect of establishing, maintaining, fixing, stabilizing or otherwise illegally influencing the resale prices of dealers in respondent' Decis-ion and Ordet 96. F'. products, and has had and stil has the capacity, tendency and effect of hindering, suppressing or eliminating competition between or among those dealers selling respondent' s products. PAR. 8. The aforesaid acts and practices of respondent have been and are now having the effect of hampering and restraining competition in the resale and distribution of respondent's products and, thus, are to the prejudice and injury of the public, and constitute unfair methods of competition in or affecting commerce or unfair acts and practices in or affecting commerce in violation of Section 5 of the Federal Trade Commission Act. DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint which the Chicago Regional Offce proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violation of the Federal Trade Commission Act; and The respondent, its attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent 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 thereafter considered the matter and having determined that it had reason to believe that the respondent has violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Tingley Rubber Corporation is a corporation organized, existing and doing business under and by virtue of the laws of the State of New Jersey, with its offce and principal place of business located at 200 South Ave., in the City of South Plainfield State of New Jersey.

2. The Federal Trade Commission has jurisdiction of the subject TINliLJ:I nuuu....

340 Decision and Order matter of this proceeding and of the respondent, and the proceeding is in tbc public interest.

ORDER For the purposes of this Order, the following definitions shall apply:

Product" is defined as any item which is manufactured, offered for sale or sold by respondent.

Dealer" is defined as any person, partnership, corporation or firm which purchases any product for retail sale. Resale Price" is defined as any price, price floor, price ceiling, price range, or any mark-up, formula or margin of profit used by any dealer for pricing any product. Such term includes, but is not limited , any retail price suggested or established by respondent, any customary resale price or the retail price in effect at any dealer. Cooperative Advertising" is defined as advertising which invites the public to purchase respondent's products at dealer s place of business, whether the cost of the advertising is borne by respondent alone or is shared by dealer and/or wholesaler and respondent. It is ordered, That respondent Tingley Rubber Corp., a corporation its successors and assigns; and respondent' s officers, agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the designing, implementing, conducting, administering or auditing of any cooperative advertising program or any other promotional assistance program, or portion thereof. in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, shall cease and desist from:

1. Threatening to withhold or withholding cooperative advertising credits or allowances or any other promotional assistance payments from any dealer, or limiting or restricting the right of any dealer to participate in any cooperative advertising program or any other promotional assistance program for which it would otherwise qualify, because of the resale price at which said dealer advertises or sells any product, or proposes to advertise or sell any product. 2. Threatening to withhold or withholding cooperative advertising credits or allowances or any other promotional assistance payments from any dealer, or limiting or restricting the right of any dealer to participate in any cooperative advertising program or any other promotional assistance program for which it would otherwise Decision nd .order 91; F. qualify, because said dealer has advertised or sold, or proposes to advertise or sell, any product using or featuring any resale price comparison.

It is further ordered, That respondent shall: Within thirty (30) days after service of this Order, mail under separate cover a copy of the enclosure set forth in the attached Exhibit A to each of its present wholesalers and to all publications soliciting advertising for respondent' s products. An affdavit shall be sworn to by an offcial of respondent verifying that the attached Exhibit A was so mailed.

2. Mail under separate cover a copy of the enclosure set forth in the attached Exhibit A to any person, partnership, corporation or firm that becomes a new wholesaler or solicits advertising for respondent' s products within three (3) years after service of this Order.

It is further ordered, That respondent shall forthwith distribute a copy of this Order to all of its operating divisions, and to present or future personnel, agents or representatives having sales, advertising or policy responsibiliies with respect to the subject matter of this Order, and that respondent secure from each such person a signed statement acknowledging receipt of said Order. It is further ordered That respondent notify the Commission at least thirty (30) days prior to any proposed change in the corporate respondent, 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 compliance obligations arising out of the Order. It is further ordered, That respondent shall within sixty (60) days after service upon it of this Order, fie with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this Order.

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,)'1;) 340 Decision and Order EXHIBIT A Dear Wholesale Distributor/Publisher: it-- Tingley Rubber Corp., without admitting any violation of the law, has agreed to the entry of an Order by the Federal Trade Commission regulating its cooperative advertising programs. In connection therewith, the Company has agreed to send you this letter describing the Order.

The order provides, among other things, as follows: 1. Dealers are free to participate in any cooperative advertising program or any other promotional assistance program conducted by Tingley Rubber Corp. "regardless of the retail price at which they advertise or sell any Tingley product. 2. Dealers will receive reimbursement under any Tingley cooperative advertising program or any other promotional assistance program regardless of the retail price featured in otherwise qualifying advertisements. If you have any questions regarding the Order or this letter, please call at Tingley.

Tingley Rubber Corp.

336- 345 0 - 81 - 23 ? EDERAL TRADE COMMISSION DECISIONS Interl-uto.ry Order