[Federal Register Volume 59, Number 54 (Monday, March 21, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6535]


[[Page Unknown]]

[Federal Register: March 21, 1994]


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FEDERAL TRADE COMMISSION
[File No. 922 3330]

 

Samick Music Corporation; Proposed Consent Agreement With 
Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, would 
prohibit, among other things, a California subsidiary of a Korean piano 
manufacturer from misrepresenting the composition of any of its piano 
soundboards or any other piano parts in the future, and would require 
the respondent to pay, to the U.S. Treasury, $266,000 as a disgorgement 
remedy.

DATES: Comments must be received on or before May 20, 1994.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:
Bennett Rushkoff, FTC/H-200, Washington, DC 20580. (202) 326-3439.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the 
Commission's Rules of Practice (16 CFR 2.34), notice is hereby given 
that the following consent agreement containing a consent order to 
cease and desist, having been filed with and accepted, subject to final 
approval, by the Commission, has been placed on the public record for a 
period of sixty (60) days. Public comment is invited. Such comments or 
views will be considered by the Commission and will be available for 
inspection and copying at its principal office in accordance with 
Sec. 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 
4.9(b)(6)(ii)).

Agreement Containing Consent Order To Cease and Desist

    In the Matter of: Samick Music Corporation, a corporation.

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Samick Music Corporation, a corporation, 
and it now appearing that Samick Music Corporation, hereinafter 
sometimes referred to as proposed respondent, is willing to enter into 
an agreement containing an order to cease and desist from the use of 
the acts and practices being investigated,
    It is hereby agreed by and between Samick Music Corporation, by its 
duly authorized officer, and its attorney, and counsel for the Federal 
Trade Commission that:
    1. Proposed respondent Samick Music Corporation is a corporation 
organized, existing and doing business under and by virtue of the laws 
of the State of California, with its office and principal place of 
business located at 18521 Railroad Street, City of Industry, California 
91748.
    2. Proposed respondent admits all the jurisdictional facts set 
forth in the draft of complaint here attached.
    3. Proposed respondent waives:
    (a) Any further procedural steps;
    (b) The requirement that the Commission's decision contain a 
statement of findings of fact and conclusions of law; and
    (c) All rights to seek judicial review or otherwise to challenge or 
contest the validity of the order entered pursuant to this agreement.
    4. This agreement shall not become a part of the public record of 
the proceeding unless and until it is accepted by the Commission. If 
this agreement is accepted by the Commission, together with the draft 
of complaint contemplated thereby, it will be placed on the public 
record for a period of sixty (60) days and information in respect 
thereto publicly released. The Commission thereafter may either 
withdraw this acceptance of this agreement and so notify the proposed 
respondent, in which event it will take such action as it may consider 
appropriate, or issue and serve its complaint (in such form as the 
circumstances may require) and decision, in disposition of the 
proceeding.
    5. This agreement is for settlement purposes only and does not 
constitute an admission by proposed respondent that the law has been 
violated as alleged in the draft complaint here attached, or that the 
facts as alleged in the draft complaint, other than jurisdictional 
facts, are true.
    6. This agreement contemplates that, if it is accepted by the 
Commission, and if such acceptance is not subsequently withdrawn by the 
Commission pursuant to the provisions of Section 2.34 of the 
Commission's Rules, the Commission may without further notice to 
proposed respondent, (1) issue its complaint corresponding in form and 
substance with the draft of complaint here attached and its decision 
containing the following order to cease and desist in disposition of 
the proceeding, and (2) make information public in respect thereto. 
When so entered, the order to cease and desist shall have the same 
force and effect and may be altered, modified or set aside in the same 
manner and within the same time provided by statute for other orders. 
The order shall become final upon service. Delivery by the U.S. Postal 
Service of the complaint and decision containing the agreed-to order to 
proposed respondent's address as stated in this agreement shall 
constitute service. Proposed respondent waives any right it may have to 
any other manner of service. The complaint may be used in construing 
the terms of the order, and no agreement, understanding, 
representation, or interpretation not contained in the order or in the 
agreement may be used to vary or to contradict the terms of the order.
    7. Proposed respondent has read the proposed complaint and the 
order contemplated hereby. It understands that once the order has been 
issued, it will be required to file one or more compliance reports 
showing that it has fully complied with the order. Proposed respondent 
further understands that it may be liable for civil penalties in the 
amount provided by law for each violation of the order after it becomes 
final.

Order

I
    It is ordered that respondent Samick Music Corporation, its 
successors and assigns, and its officers, agents, representatives and 
employees, directly or through any corporation, subsidiary, division or 
other device, in connection with the advertising, offering for sale, 
sale, or distribution of any piano in or affecting commerce, as 
``commerce'' is defined in the Federal Trade Commission Act, forthwith 
cease and desist from misrepresenting, directly or by implication, the 
composition of piano soundboards or any other piano parts.
II
    It is further ordered that, pursuant to 15 U.S.C. 57(b), 
respondent, its successors and assigns, shall pay a refund of Two 
Hundred Sixty-Six Thousand Dollars ($266,000), which, in view of the 
impracticality of distributing the refund to consumers, shall be paid 
to the United States Treasury. Such payment shall be by two cashier's 
checks or certified checks made payable to the Treasurer of the United 
States, the first such check, in the amount of One Hundred Thirty-Two 
Thousand Dollars ($132,000), to be tendered to the Commission within 
six months of the date of service of this Order, and the second such 
check, in the amount of One Hundred Thirty-Four Thousand Dollars 
($134,000), to be tendered to the Commission within twelve months of 
the date of service of this Order.
III
    It is further ordered that respondent shall maintain for a period 
of three (3) years, and upon request make available to the Commission 
for inspection and copying, all promotional, advertising or other 
materials disseminated by respondent which make any representation 
concerning the composition of soundboards in pianos advertised, sold, 
distributed or offered for sale or distribution by respondent; all 
consumer complaints concerning the composition of soundboards in pianos 
advertised, sold, distributed or offered for sale or distribution by 
respondent; and accurate records of all materials relied upon by 
respondent to substantiate any representation concerning the 
composition of soundboards in pianos advertised, sold, distributed or 
offered for sale or distribution by respondent.
IV
    It is further ordered that respondent shall notify the Commission 
at least thirty (30) days period to any proposed change in respondent, 
including but not limited to dissolution, assignment, sale resulting in 
the emergence of a successor corporation, or the creation or 
dissolution of subsidiaries, that may affect compliance obligations 
arising out of the Order.
V
    It is further ordered that respondent shall within thirty (30) days 
after service of this Order, distribute this Order to each of its 
officers, directors, managers and all personnel responsible for the 
preparation or review of promotional material.
VI
    It is further ordered that respondent shall, within sixty (60) days 
after service of this Order, file with the Commission a report, in 
writing, setting forth in detail the manner in which it has complied 
with this Order.

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted an agreement to a 
proposed consent order from Samick Music Corporation, of City of 
Industry, California.
    The proposed consent order has been placed on the public record for 
sixty (60) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
order.
    The complaint attached to the proposed consent order alleges that 
Samick Music Corporation's representations, disseminated in promotional 
materials, that the soundboards in its pianos were ``solid spruce'' or 
``spruce'' were false and misleading, because many such soundboards 
were actually composed of outer layers of spruce with inner layers made 
of another type or types of wood. The complaint alleges that this 
practice is a violation of Section 5 of the Federal Trade Commission 
Act.
    The proposed consent order prohibits Samick Music Corporation from 
misrepresenting, directly or by implication, the composition of piano 
soundboards or any other piano parts. The proposed consent order also 
contains a disgorgement remedy in the form of a $266,000 refund, which, 
in view of the impracticality of distributing the refund to consumers, 
shall be payable to the U.S. Treasury.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 94-6535 Filed 3-18-94; 8:45 am]
BILLING CODE 6750-01-M