Teac Corporation of America

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IN THE MATTER OF TEAC CORPORATION OF AMERICA MODIFYING ORDER IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-2752. Consent Order, Oct. 1975-Modifying Order, Nov. , 1983 The Federal Trade Commission has modified the order issued against TEAC Corporation of America on Oct. 24, 1975 (86 F. C. 981) to allow the company to prevent transshipment of its products to dealers who do not meet reasonable, non-discriminatory standards of promotion, service and display. ORDER .MODIFYING CEASE AND DESIST ORDER ISSUED ON OCTOBER 24, 1975 On October 24, 1975, the Federal Trade Commission ("Commission ) issued an order against TEAC Corporation of America TEAC") in Docket No. G-2752, 86 F. C. 981 (1975), prohibiting TEAC from, among other things, restricting or limiting in any manner the customers or classes of customers to whom dealers may sell TEAC' s products.

On March 8, 1983 , the Commission issued a modified order in US. Pioneer Electronics Corporation Docket No. G-2755 (101 F. C. 372), allowing Pioneer (one of TEAC's competitors) to prevent transshipment of its products to dealers who do not meet reasonable, nondiscriminatory standards of promotion, service and display. The initial Pioneer order contained the same provisions that are contained in the TEAC order. Both orders contain a most favored respondent clause pursuant to which the Commission may modify the respective orders in order to bring them into conformity with less stringent restrictions imposed on the respondents' competitors. On August 1, 1983, the Commission issued an order to show cause why the proceeding in Docket No. G-2752 should not be reopened to modify Paragraph 1(11) of the order in this case to read as follows: Preventing or prohibiting any independent dealer or distributor from reselling his products to any persons or group of persons, business or class of businesses, except as expressly provided herein. This order shall not prohibit respondent from establishing lawful, reasonable, and non-discriminatory minimum standards for its dealers, including standards that relate to promotion and store display, demonstration, inventory levels, service and repair, volume requirements and financial stability, nor shall this )rder prohibit respondent from requiring its dealers who sell respomtent' s products for resale to make such sales only to dealers who maintain such minimum standards. 1815 Modifying Order The proposed modification was accepted by TEAC. In view of the Commission s action in Pioneer the Commission believes that this modification is in the public interest.

Accordingly, It is ordered That this matter be, and it hereby is, reopened and that Paragraph I(ll) of the order in Docket No. G-2752 be modified as indicated above.

Amended Complaint 102 F.