[Federal Register Volume 60, Number 150 (Friday, August 4, 1995)]
[Notices]
[Pages 39959-39961]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19240]



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FEDERAL TRADE COMMISSION
[File No. 941-0107]


Santa Clara County Motor Car Dealers Association; 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 association from carrying 
out, participating in, inducing or assisting any boycott or concerted 
refusal to deal with any newspaper, periodical, television or radio 
station, and would require the association to amend its by-laws to 
incorporate the stipulated prohibition, and to distribute the amended 
by-laws and the final Commission order to each of its members.

DATES: Comments must be received on or before October 3, 1995.

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

FOR FURTHER INFORMATION CONTACT:
Ralph Stone, San Francisco Regional Office, Federal Trade Commission, 
901 Market St., Suite 570, San Francisco, CA 94103. (415) 744-7920.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of 
the Commission's Rules and 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 Section 4.9(b)(6)(ii) of the Commission's Rule of 
Practice (16 CFR 4.9(b)(6)(ii)).

    In the Matter of: Santa Clara County Motor Car Dealers 
Association, an unincorporated association; File No. 941-0107.

Agreement Containing Consent Order to Cease and Desist

    The Federal Trade Commission, having initiated an investigation of 
certain acts and practices of the Santa Clara County Motor Car Dealers 
Association, an unincorporated association, and it now appearing that 
the Santa Clara County Motor Car Dealers Association, hereinafter 
sometimes referred to as the ``Association'' or ``proposed 
respondent,'' is willing to enter into an agreement containing an order 
to cease and desist from the acts and practices being investigated,
    It is Hereby Agreed by and between the Association, by its duly 
authorized 

[[Page 39960]]
officers, and its attorney, and counsel for the Federal Trade 
Commission that:
    1. The Association is an unincorporated association 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 at 
336 East Hamilton Avenue, Campbell, California 95008.
    2. The Association admits all the jurisdictional facts set forth in 
the draft of Complaint.
    3. The Association 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, 5 U.S.C. 
Sec. 504.
    4. This agreement shall not become 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 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 of Complaint, or that the facts as 
alleged in the draft of Complaint, other than the 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, (a) issue its Complaint corresponding in form and 
substance with the draft of Complaint and its decision containing the 
following Order to cease and desist in disposition of the proceeding 
and (b) 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 the agreement may be used 
to vary or contradict the terms of the Order.
    7. Proposed respondent has read the proposed Complaint and Order 
contemplated hereby. Proposed respondent 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, for the purposes of this Order, ``respondent'' 
or ``Association'' shall mean the Santa Clara County Motor Car Dealers 
Association, its predecessors, successors and assigns, and its 
directors, committees, officers, delegates, representatives, agents, 
and employees.

II

    It Is Further Ordered that the Association, directly or indirectly, 
or through any person or any corporate or other device, in or in 
connection with its activities as a trade association, in or affecting 
commerce, as ``commerce'' is defined in the Federal Trade Commission 
Act, shall forthwith cease and desist from carrying out, participating 
in, inducing, suggesting, urging, encouraging, or assisting any boycott 
of, or concerted refusal to deal with, any newspaper, periodical, 
television station, or radio station; provided, however, that nothing 
in this Order shall prohibit the Association or any of its members from 
establishing, participating in, or maintaining joint advertising 
programs, so long as such joint advertising programs are not a part of 
any boycott or concerted refusal to deal and do not otherwise violate 
this Order.

III

    It Is Further Ordered that the Association shall:
    A. Within sixty (60) days after the date this Order becomes final, 
amend its by-laws to incorporate by reference Paragraph II of this 
Order, and distribute by first-class mail a copy of the amended by-laws 
to each of its members;
    B. Within thirty (30) days after the date this Order becomes final, 
distribute by first-class mail a copy of this Order and the Complaint 
to each of its members;
    C. For a period of five (5) years after the date this Order become 
final, provide each new member with a copy of this Order, the 
complaint, and the amended by-laws within thirty (30) days of the new 
member's admission to the Association; and
    D. Within seventy-five (75) days after the date this Order becomes 
final, and annually thereafter for a period of five (5) years on the 
anniversary of the date this Order became final, file with the 
Secretary of the Commission a verified written report setting forth in 
detail the manner and form in which the Association has complied with 
and is complying with this Order.

IV

    It Is Further Ordered that the Association shall notify the 
Commission at least thirty (30) days prior to any change in the 
Association, such as dissolution or reorganization 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.

V
    It Is Further Ordered that, for the purpose of determining or 
securing compliance with this Order, respondent shall permit any duly 
authorized representative of the Commission:
    A. Upon seven (7) days' notice to respondent, to have access, 
during office hours and in the presence of counsel, to inspect and copy 
all books, ledgers, accounts, correspondence, memoranda and other 
records and documents in the possession or under the control of 
respondent relating to any matters contained in this Order; and
    B. Upon seven (7) days' notice to respondent and without restraint 
or interference from it, to interview officers, directors, or employees 
of respondent.

[[Page 39961]]


VI

    It Is Further Ordered that this Order shall terminate twenty (20) 
years from the date this Order becomes final.

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 the Santa Clara 
County Motor Car Dealers Association (``Association'').
    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.

Description of the Complaint

    A complaint prepared for issuance by the Commission along with the 
proposed order alleges that the Association and at least some of its 
members agreed that members would cancel advertising in, and thereafter 
collectively withhold advertising from, the San Jose Mercury News 
newspaper in retaliation for a Mercury News article that was intended 
to educate consumers on how to analyze the manufacturer's factory 
invoice as part of the automobile-buying process. Armed with this 
information, the consumer may be better equipped to negotiate a lower 
price.
    The complaint alleges that the purposes or effects of the agreement 
were to restrain competition among new automobile and truck dealers in 
Santa Clara County, California, and to deprive consumers of truthful 
information pertinent to the purchase of new automobiles and trucks. 
Agreements not to disemminate information through advertising can make 
it more difficult for consumers to choose among automobile dealers by 
preventing direct interbrand and intrabrand comparisons of dealers' 
automobiles and their prices and services, and thus may increase 
consumer search costs. Moreover, the use of the combined economic power 
of the automobile dealers to affect a newspaper's editorial content may 
chill the publication of information that would lower search costs and 
make readers more effective consumers.

Description of the Proposed Consent Order

    The proposed order would prohibit the Association from carrying 
out, participating in, inducing, suggesting, urging, encouraging, or 
assisting any boycott of, or concerted refusal to deal with, any 
newspaper, periodical, television station, or radio station.
    The proposed order would permit the Association to establish, 
participate in, and maintain joint advertising programs, so long as 
such joint advertising programs are not part of any boycott or 
concerted refusal to deal.
    The proposed order would require the Association to amend its by-
laws to incorporate by reference the order. It would also require the 
Association to distribute a copy of the amended by-laws, the order, and 
the complaint to each of its members, file compliance reports, and 
notify the Commission of certain changes in its structure.
    Finally, the proposed order contains a twenty year ``sunset'' 
provision. Under this provision, the terms of the order shall terminate 
twenty years after the date the order becomes final.
    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.
    The proposed consent order has been entered into for settlement 
purposes only and does not constitute an admission by the Association 
that the law has been violated as alleged in the complaint.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 95-19240 Filed 8-3-95; 8:45 am]
BILLING CODE 6750-01-M