[Federal Register Volume 59, Number 210 (Tuesday, November 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27010]


[[Page Unknown]]

[Federal Register: November 1, 1994]


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FEDERAL TRADE COMMISSION

[File No. 911 0097]

 

Baby Furniture Plus Association, Inc.; 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, an Alabama buying cooperative and trade 
association from taking any action on behalf of its members, or 
encouraging them to take any action, that interferes with a juvenile 
product manufacturer's decision as to how or to whom to distribute its 
products. The consent agreement also would prohibit the respondent from 
coercing--by means of actual or threatened refusals to deal--any 
juvenile products manufacturer to abandon or adopt--or to refrain from 
abandoning or adopting--any marketing method for its products.

dates: Comments must be received on or before January 3, 1995.

addresses: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th Street and Pennsylvania Avenue NW., Washington, DC 20850.

for further information contact: Phoebe Morse, Boston Regional Office, 
Federal Trade Commission, 101 Merrimac St., Suite 810, Boston, MA 
02114-4719. (617) 424-5960.

supplementary information: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 State. 721, 15 U.S.C. 46 and Sec. 2.34 of the 
Commission's rules of practice (16 CFR 2.35), 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

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of the Baby Furniture Plus Association, Inc. 
(``BFPAI'') and it now appearing that the BFPAI, hereinafter 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 the BFPAI, by its duly 
authorized officer, and counsel for the Federal Trade Commission that:
    1. Proposed respondent Baby Furniture Plus Association, Inc. is a 
corporation organized, existing and doing business under and by virtue 
of the laws of the Commonwealth of Virginia, with its principal office 
and place of business located at Suite 1, 1020 Montgomery Highway, 
Birmingham, Alabama 35216. Respondent is a voluntary association of 
retailers of juvenile products doing business in approximately twenty-
five States.
    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;
    (c) All rights to seek judicial review or otherwise to challenge or 
contest the validity of the order entered pursuant to this agreement; 
and
    (d) All claims under the Equal Access to Justice Act.
    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, it, together with the 
draft of complaint contemplated thereby, 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 its acceptance of this agreement and so notify 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 of facts, other than 
jurisdictional facts, or of violations of law as alleged in the draft 
of complaint here attached.
    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 Sec. 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 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 might 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 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

    For purposes of this order, the following definitions shall apply:
    A. ``Baby Furniture Plus Association, Inc.'' means Baby Furniture 
Plus Association, Inc., and its directors, committees, officers, 
representatives, agents, employees, successors and assigns.
    B. ``Juvenile products'' means products or accessories to products 
that are used by or are intended for use by babies, children or 
juveniles.

I

    It is ordered that BFPAI, directly, indirectly, or through any 
corporate or other device, in or in connection with its activities in 
or affecting commerce, as ``commerce'' is defined in section 4 of the 
Federal Trade Commission Act, as amended, forthwith cease and desist 
from:
    A. Taking any action, directly or indirectly, on behalf of its 
members, including but not limited to any actual or threatened boycott 
or refusal to deal, that has the purpose or effect of interfering with 
any juvenile product manufacturer's decision as to how or to whom it 
distributes its product(s);
    B. Coercing, compelling, inducing, or intimidating by means of 
actual or threatened refusals to deal, or attempting to coerce, compel, 
induce, or intimidate by means of actual or threatened refusals to 
deal, any manufacturer of juvenile products into abandoning, adopting 
or refraining from abandoning or adopting any marketing method, 
practice or policy with regard to the distribution of its product(s); 
and
    C. Requesting, urging, recommending or suggesting that BFPAI 
members take any action, directly or indirectly, including but not 
limited to any actual or threatened boycott or refusal to deal, which 
has the purpose or effect of interfering with any juvenile product 
manufacturer's decision as to how or to whom it distributes its 
product(s).
    Provided that this order shall not be construed to prevent BFPAI 
from engaging in trade association or buying cooperative activities 
that are lawful under the antitrust laws.

II

    It is further ordered that BFPAI shall:
    A. Distribute by first-class mail a copy of this order and the 
accompanying complaint to each of BFPAI's members within thirty (30) 
days after the date on which this order become final;
    B. For a period of five (5) years after the date on which this 
order becomes final, provide each new BFPAI member with a copy of this 
order and the accompanying complaint at the time the member is accepted 
for membership; and
    C. Within thirty (30) days after the date on which this order 
becomes final, distribute by first-class mail to each manufacturer 
enumerated in ``Appendix A'' to this order a copy of the Commission's 
complaint and order in this matter and letter, on BFPAI letterhead and 
signed by BFPAI's president, in the form shown as ``Appendix B'' to 
this order.

III

    It is further ordered that, for a period of five (5) years after 
this order becomes final, BFPAI shall maintain in its files a copy of 
the minutes of each meeting of its membership and of each meeting of 
its board of directors and a copy of all correspondence received from, 
or sent to, any mail order dealer of juvenile products, any 
manufacturer of juvenile products, or any association representing 
manufacturers of juvenile products and that such copies of minutes and 
correspondence be made available to Commission staff for inspection and 
copying upon reasonable notice.

IV

    It is further ordered that, within sixty (60) days after the date 
on which this order becomes final, BFPAI shall file with the Commission 
a verified written report setting forth in detail the manner and form 
in which it has complied with this order. Thereafter, additional 
reports shall be filed at such other times as the Commission or its 
staff may, by written notice to BFPAI, require.

V

    It is further ordered that BFPAI shall notify the Commission at 
least thirty (30) days prior to any proposed change in the corporation 
such as a dissolution, assignment, or sale resulting in the emergence 
of a successor corporation or association, or any other change in the 
corporation or association which may affect compliance obligations 
arising out of this order.

Appendix A

A.D.I. Lamps, P.O. Box 6357, Phoenix, AZ 85005, Attn: National Sales 
Manager
Aprica U.S.A., Inc. P.O. Box 25408--Zip 92825-5408, 1200 Howell 
Avenue, Anaheim, CA 92805, Attn: National Sales Manager
Baby Trend, Inc., 1928 W. Holt Avenue, Pomona, CA 91768, Attn: 
National Sales Manager
Bandaks Emmaljunga Incorporated, 737 South Vinewood Street, 
Escondido, CA 92029, Attn: National Sales Manager
Bassett Furniture Industries, Inc., P.O. Box 626, Bassett, VA 24055, 
Attn: National Sales Manager
Carlson Children's Products, Inc., 122 Kirkland Circle, Oswego, IL 
60543, Attn: National Sales Manager
Century Products Company, 9600 Valley View Road, Macedonia, OH 
44056-9989, Attn: National Sales Manager
Chicco Artsana of America, 200 Fifth Ave., Rm 910, New York, NY 
10010, Attn: National Sales Manager
Child Craft Industries, Inc., P.O. Box 444, Salem, IN 47167-0444, 
Attn: National Sales Manager
Children on the Go, 1670 S. Wolf Road, Wheeling, IL 60090, Attn: 
National Sales Manager
Cocso, Inc., 2525 State St., Columbus, IN 47201, Attn: National 
Sales Manager
Dutalier, Inc., 298 Chaput St. Pie, Quebec, Canada JOH 1WO, Attn: 
National Sales Manager
Evenflo Juvenile Furniture Co., 1801 Commerce Drive, Piqua, OH 
45356, Attn: National Sales Manager
FBS, Inc., 1071 Batesville, Rd., Greer, SC 29650, Attn: National 
Sales Manager
Fisher-Price, Inc., 636 Girard Ave., East Aurora, NY 14052, Attn: 
National Sales Manager
Gerry Baby Products, 12530 Grant Drive, Denver, CO 80233, Attn: 
National Sales Manager
Glenna Jean Mfg., P.O. Box 2187, Petersburg, VA 23804, Attn: 
National Sales Manager
Graco Children's Products, Inc., Rt 23, Main St., Elverson, PA 
19520, Attn: National Sales Manager
Jolly Jumper, P.O. Box M, Woonsocket, RI 22895, Attn: National Sales 
Manager
Lambs & Ivy, 5978 Bowcroft St., Los Angeles, CA 90016, Attn: 
National Sales Manager
The Little Tikes Co., 2180 Barlow Rd., Hudson, OH 44236, Attn: 
National Sales Manager
Newborne Company, River Rd., Worthington, MA 01098, Attn: National 
Sales Manager
Noel Joanna Inc., 22942 Arroyo Vista, Rancho Santa Margarita, CA 
92688, Attn: National Sales Manager
Nu-Line, 214 Nu-Line St., Suring, WI 54174, Attn: National Sales 
Manager
Omron Marshall Products, 600 Barclay Blvd., Lincolnshire, IL 60069, 
Attn: National Sales Manager
Pansy Ellen Products, 1245 Old Alpharetta Rd., Alpharetta, GA 30202, 
Attn: National Sales Manager
Perego, USA, 3625 Indpendence Drive, Fort Wayne, IN 46808, Attn: 
National Sales Manager
Prince Lionheart, 3070 Skyway Dr., Bldg. 502, Santa Maria, CA 93455, 
Attn: National Sales Manager
The Red Calliope & Associates, Inc., 13003 S. Figueroa St., Los 
Angeles, CA 90061, Attn: National Sales Manager
Rochelle Furniture, 722 North Market St., Duncannon, PA 17020, Attn: 
National Sales Manager
Safety 1st, Inc., 210 Boylston St., Chestnut Hill, MA 02167, Attn: 
National Sales Manager
Sandbox Industries, P.O. Box 477, Tenafly, NJ 07670, Attn: National 
Sales Manager
Sassy, Inc., 1534 College SE, Grand Rapids, MI 49507, Attn: National 
Sales Manager
Simmons Juvenile Products Co., 613 E. Beacon Avenue, New London, WI 
54961, Attn: National Sales Manager
Snugli, Inc., 12520 Grant Drive, Denver, CO 80233, Attn: National 
Sales Manager
Summer Infant Products, 33 Meeting Street, Cumberland, RI 02864, 
Attn: National Sales Manager
Welsh Company, 1535 S. Eighth St., St. Louis, MO 63104, Attn: 
National Sales Manager

Appendix B

Dear-------------------------------------------------------------------

    As you may be aware, the Federal Trade Commission (``FTC'') has 
been investigating certain activities of the Baby Furniture Plus 
Association, Inc. (``BFPAI''). The BFPAI has voluntarily entered 
into an agreement with the FTC which resulted in the issuance by the 
FTC on (date) of a complaint and the entry of a consent order. The 
order requires that you be sent a copy of the complaint, the order 
and this letter.
    In accordance with the terms of the FTC's order, you are hereby 
notified that, among other things, the BFPAI will cease and desist 
from:
    A. Taking any action, directly or indirectly, on behalf of its 
members, including but not limited to any actual or threatened 
boycott or refusal to deal, that has the purpose or effect of 
interfering with any juvenile product manufacturer's decision as to 
how or to whom it distributes its products(s);
    B. Coercing, compelling, inducing, or intimidating by means of 
actual or threatened refusals to deal, or attempting to coerce, 
compel, induce, or intimidate by means of actual or threatened 
refusals to deal, any manufacturer of juvenile products into 
abandoning, adopting or refraining from abandoning or adopting any 
marketing method, practice or policy with regard to the distribution 
of its product(s); and
    C. Requesting, urging, recommending or suggesting that BFPAI 
members take any action, directly or indirectly, including but not 
limited to any actual or threatened boycott or refusal to deal, 
which has the purpose or effect of interfering with any juvenile 
product manufacturer's decision as to how or to whom it distributes 
its product(s).
    A copy of the complaint and the order are enclosed.

Sincerely,
----------------------------------------------------------------------

President

Enclosures

Analysis of Proposed Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, an agreement to a proposed consent order from proposed 
respondent Baby Furniture Plus Association, Inc. (``proposed 
respondent'' or ```BFPAI'').
    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 and take other appropriate action or make 
final the agreement's proposed order.

Description of Complaint

    A complaint prepared for issuance by the Commission along with the 
proposed order alleges that proposed respondent's members, all of whom 
are retailers of juvenile products, agreed to act in concert to 
restrict the competition that some of the members faced from the New 
Hampshire Buyer's Service catalog.
    The complaint alleges that pursuant to this agreement, the BFPAI 
wrote letters to thirty-seven manufacturers of juvenile products in 
which it directly or impliedly threatened that its members would refuse 
to deal with them if the manufacturers continued to do business with 
the New Hampshire Buyer's Service catalog.
    The complaint alleges that these actions constituted a combination 
or conspiracy to threaten to boycott juvenile product manufacturers 
that do business with the New Hampshire Buyer's Service catalog. This 
conduct, it is alleged, had the purpose or effect, or the tendency or 
capacity, to restrain competition unreasonably and injure consumers. 
Among other things, it is alleged that the conduct restrained 
competition between the proposed respondent's members and other 
retailers of juvenile products, including the New Hampshire Buyer's 
Service catalog, restrained the ability of manufacturers of juvenile 
products to distribute their products through mail order catalogs, and 
deprived consumers of the benefits of additional price, quality and 
service competition in connection with the sale of juvenile products.

Description of the Proposed Consent Order

    The proposed order would require the proposed respondent to cease 
and desist from taking any action on behalf of its members, including 
an actual or threatened boycott or refusal to deal, that has the 
purpose or effect of interfering with a juvenile product manufacturer's 
decision as to how or to whom it distributes its products. In addition, 
the proposed order requires the BFPAI to cease and desist from actual 
or threatened boycotts, refusals to deal or the use of other means of 
coercion to compel or induce any juvenile product manufacturer to adopt 
or refrain from adopting any marketing method, practice or policy with 
regard to the distribution of its products. Finally, the proposed order 
requires the proposed respondent to cease and desist from requesting, 
urging, recommending or suggesting that its members take action, such 
as an actual or threatened boycott or refusal to deal, which has the 
purpose or effect of interfering with a juvenile product manufacturer's 
decision as to how or to whom it distributes its products.
    The proposed order contains a safe harbor provision which provides 
that the order shall not be construed to prevent the BFPAI from 
engaging in trade association or buying cooperative activities that are 
lawful under the antitrust laws.
    The BFPAI is required to take several remedial actions under the 
terms of the proposed order. Within 30 days after the order becomes 
final, the BFPAI must distribute a copy of the order to all its members 
and, for a five year period, the BFPAI must make a copy of the order 
available to all new members at the time they are accepted for 
membership. In addition, within 30 days after this order becomes final, 
the BFPAI must also send a letter to the manufacturers it had 
threatened to boycott in which it acknowledges the consent order and 
outlines the order's principal terms.
    Finally, the proposed order requires the BFPAI to file compliance 
reports, to retain certain documents for a five year period, and to 
notify the Commission of certain changes in status.
    The purpose of this analysis is to facilitate public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.
    The proposed consent order has been entered into for settlement 
purposes only and does not constitute an admission by the proposed 
respondent that the law has been violated as alleged in the complaint.
Donald S. Clark,
Secretary.
Dissenting Statement of Commissioner Mary L. Azcuenaga in New England 
Juvenile Retailers Association, File 911-0079, and Baby Furniture Plus 
Association, Inc., File 911-0097
    In these cases, two trade associations complained to manufacturers 
about free riding by a catalogue seller, and the Commission charges 
them and the retailer members of one association with directly or 
impliedly threatening a concerted refusal to deal with the 
manufacturers. Although the letters of complaint were ill-advised, 
evidence that the retailers (many of whom were not represented by 
counsel during our investigation) were committed ``to a common scheme 
designed to achieve an unlawful objective''\1\ (i.e., a coercive, 
concerted refusal to deal) is thin at best. Given the dearth of 
evidence of unlawful agreement, the arguably procompetitive purpose, 
and the absence both of market power and of anticompetitive effects, I 
do not find reason to believe that the challenged conduct unreasonably 
restrained trade or that the imposition of an order is in the interest 
of the public. I dissent.

    \1\Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 768 
(1984).
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[FR Doc. 94-27010 Filed 10-31-94; 8:45 am]
BILLING CODE 6750-01-M