[Federal Register Volume 80, Number 212 (Tuesday, November 3, 2015)]
[Notices]
[Pages 67740-67742]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-27934]


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FEDERAL TRADE COMMISSION

[File No. 151 0181]


Step N Grip, LLC; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair methods of competition. 
The attached Analysis to Aid Public Comment describes both the 
allegations in the draft complaint and the terms of the consent order--
embodied in the consent agreement--that would settle these allegations.

DATES: Comments must be received on or before November 27, 2015.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/stepngripconsent online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``Step N Grip, LLC--
Consent Agreement; File No. 151 0181'' on your comment and file your 
comment online at https://ftcpublic.commentworks.com/ftc/stepngripconsent by following the instructions on the web-based form. 
If you prefer to file your comment on paper, write ``Step N Grip, LLC--
Consent Agreement; File No. 151 0181'' on your comment and on the 
envelope, and mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite 
CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex 
D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Michael Turner (202-326-3649). Bureau 
of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing 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 thirty (30) days. The 
following Analysis to Aid Public Comment describes the terms of the 
consent agreement, and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement package can be obtained 
from the FTC Home Page (for October 27, 2015), on the World Wide Web, 
at http://www.ftc.gov/os/actions.shtm.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before November 27, 
2015. Write ``Step N Grip, LLC--Consent Agreement; File No. 151 0181'' 
on your comment. Your comment--including your name and your state--will 
be placed on the public record of this proceeding, including, to the 
extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the 
Commission tries to remove individuals' home contact information from 
comments before placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone's Social Security number, 
date of birth, driver's license number or other state identification 
number or foreign country equivalent, passport number, financial 
account number, or credit or debit card number. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health

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information, like medical records or other individually identifiable 
health information. In addition, do not include any ``[t]rade secret or 
any commercial or financial information which . . . is privileged or 
confidential,'' as discussed in Section 6(f) of the FTC Act, 15 U.S.C. 
46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do 
not include competitively sensitive information such as costs, sales 
statistics, inventories, formulas, patterns, devices, manufacturing 
processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
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    \1\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
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    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/stepngripconsent by following the instructions on the web-based 
form. If this Notice appears at http://www.regulations.gov/#!home, you 
also may file a comment through that Web site.
    If you file your comment on paper, write ``Step N Grip, LLC--
Consent Agreement; File No. 151 0181'' on your comment and on the 
envelope, and mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite 
CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex 
D), Washington, DC 20024. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before November 27, 2015. You can find more 
information, including routine uses permitted by the Privacy Act, in 
the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Agreement Containing Consent Order to Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an agreement containing consent order (``Consent 
Agreement'') from Step N Grip, LLC (``Step N Grip''). The Commission's 
Complaint alleges that Step N Grip violated Section 5 of the Federal 
Trade Commission Act, as amended, 15 U.S.C. 45, by inviting a 
competitor in the sale of certain rug devices to set and raise prices.
    Under the terms of the proposed Consent Agreement, Step N Grip is 
required to cease and desist from communicating with its competitors 
about prices. It is also barred from entering into, participating in, 
inviting, or soliciting an agreement with any competitor to divide 
markets, to allocate customers, or to fix prices.
    The Consent Agreement has been placed on the public record for 30 
days for receipt of comments from interested members of the public. 
Comments received during this period will become part of the public 
record. After 30 days, the Commission will review the Consent Agreement 
again and the comments received, and will decide whether it should 
withdraw from the Consent Agreement or make final the accompanying 
Decision and Order (``Proposed Order'').
    The purpose of this Analysis to Aid Public Comment is to invite and 
facilitate public comment. It is not intended to constitute an official 
interpretation of the proposed Consent Agreement and the accompanying 
Proposed Order or in any way to modify their terms.

I. The Complaints

    The allegations of the Complaint are summarized below:
    Step N Grip markets and sells a device called NeverCurl that is 
intended to keep the corners of a rug from curling. Step N Grip sells 
NeverCurl primarily through Amazon.com; Step N Grip also sells 
NeverCurl through its own Web site.
    Step N Grip's closest competitor in the sale of such rug devices is 
Competitor A, a company that also sells its product on Amazon.com. For 
several months prior to June 1, 2015, Step N Grip generally priced 
NeverCurl at $13.95 per package, while Competitor A priced its product 
at $16.99 per package.
    On June 1, 2015, Competitor A lowered its price on Amazon.com to 
$13.49 in an effort to compete more aggressively with Step N Grip. In 
response, Step N Grip lowered its price on Amazon.com to $12.95.
    On June 7, 2015, Competitor A lowered its price on Amazon.com to 
$11.95 in response to Step N Grip. That same day, Step N Grip lowered 
its price to $11.95 on Amazon.com and sent an email message to 
Competitor A. The communication, in its entirety, read: ``We both sell 
at $12.95? Or, $11.95?''
    Competitor A reported the communication to the FTC.

II. Analysis

    Step N Grip's June 7 message to Competitor A is plainly an attempt 
to arrange an agreement between the two companies setting and 
increasing the price of their competing products. It is an invitation 
to collude. The Commission has long held that invitations to collude 
violate Section 5 of the FTC Act, and this is unaltered by the 
Commission's recent Statement on Section 5.
    In a recent statement, the Commission explained that unfair methods 
of competition under Section 5 ``must cause, or be likely to cause, 
harm to competition or the competitive process, taking into account any 
associated cognizable efficiencies and business justifications.'' \2\ 
Potential violations are evaluated under a ``framework similar to the 
rule of reason.'' \3\ Competitive effects analysis under the rule of 
reason depends upon the nature of the conduct that is under review.\4\
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    \2\ Fed. Trade Comm'n, Statement of Enforcement Principles 
Regarding ``Unfair Methods of Competition'' Under Section 5 of the 
FTC Act (Aug. 13, 2015) (Section 5 Unfair Methods of Competition 
Policy Statement), available at https://www.ftc.gov/system/files/documents/public_statements/735201/150813section5enforcement.pdf. 
Commissioner Ohlhausen dissented from the issuance of the Section 5 
Unfair Methods of Competition Policy Statement. See https://www.ftc.gov/public-statements/2015/08/dissenting-statement-commissioner-ohlhausen-ftc-act-section-5-policy.
    \3\ Section 5 Unfair Methods of Competition Policy Statement.
    \4\ See, e.g., California Dental Ass'n v. FTC, 526 U.S. 756, 781 
(1999) (``What is required . . . is an inquiry meet for the case, 
looking to the circumstances, details, and logic of a restraint.'').
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    An invitation to collude is ``potentially harmful and . . . serves 
no legitimate business purpose.''\5\ For this

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reason, the Commission treats such conduct as ``inherently suspect'' 
(that is, presumptively anticompetitive).\6\ This means that an 
invitation to collude can be condemned under Section 5 without a 
showing that the respondent possesses market power.\7\
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    \5\ In re Valassis Commc'ns., Inc., 141 F.T.C. 247, 283 (2006) 
(Analysis of Agreement Containing Consent Order to Aid Public 
Comment); see also Address by FTC Chairwoman Edith Ramirez, Section 
5 Enforcement Principles, George Washington University Law School at 
5 (Aug. 13, 2015), available at https://www.ftc.gov/system/files/documents/public_statements/735411/150813section5speech.pdf.
    \6\ See, e.g., In re North Carolina Bd. of Dental Examiners, 152 
F.T.C. 640, 668 (2011) (noting that inherently suspect conduct is 
such that be ``reasonably characterized as `giv[ing] rise to an 
intuitively obviously inference of anticompetitive effect.''' 
(citation omitted)).
    \7\ See, e.g., In re Realcomp II, Ltd., 148 F.T.C. ___, No. 
9320, 2009 FTC LEXIS 250 at *51 (Oct. 30, 2009) (Comm'n Op.) 
(explaining that if conduct is ``inherently suspect'' in nature, and 
there are no cognizable procompetitive justifications, the 
Commission can condemn it ``without proof of market power or actual 
effects'').
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    The Commission has long held that an invitation to collude violates 
Section 5 of the FTC Act even where there is no proof that the 
competitor accepted the invitation.\8\ There are various reasons for 
this. First, unaccepted solicitations may facilitate coordination 
between competitors because they reveal information about the 
solicitor's intentions or preferences. Second, it can be difficult to 
discern whether a competitor has accepted a solicitation. Third, 
finding a violation may deter similar conduct--conduct that has no 
legitimate business purpose.\9\
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    \8\ See, e.g., In re Valassis Commc'ns, Inc., 141 F.T.C. 247 
(2006); In re Stone Container, 125 F.T.C. 853 (1998); In re 
Precision Moulding, 122 F.T.C. 104 (1996). See also In re McWane, 
Inc., Docket No. 9351, Opinion of the Commission on Motions for 
Summary Decision at 20-21 (F.T.C. Aug. 9, 2012) (``an invitation to 
collude is `the quintessential example of the kind of conduct that 
should be . . . challenged as a violation of Section 5' '') (citing 
the Statement of Chairman Leibowitz and Commissioners Kovacic and 
Rosch, In re U-Haul Int'l, Inc., 150 F.T.C. 1, 53 (2010)). This 
conclusion has been endorsed by leading antitrust scholars. See P. 
Areeda & H. Hovenkamp, VI ANTITRUST LAW ] 1419 (2003); Stephen 
Calkins, Counterpoint: The Legal Foundation of the Commission's Use 
of Section 5 to Challenge Invitations to Collude is Secure, 
ANTITRUST Spring 2000, at 69. In a case brought under a state's 
version of Section 5, the First Circuit expressed support for the 
Commission's application of Section 5 to invitations to collude. Liu 
v. Amerco, 677 F.3d 489 (1st Cir. 2012).
    \9\ In re Valassis Comm'c, Inc., 141 F.T.C. 247, 283 (2006) 
(Analysis of Agreement Containing Consent Order to Aid Public 
Comment).
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III. The Proposed Consent Order

    The Proposed Order contains the following substantive provisions:
    Section II, Paragraph A of the Proposed Order enjoins Step N Grip 
from communicating with its competitors about rates or prices, with a 
proviso permitting public posting of rates.
    Section II, Paragraph B prohibits Step N Grip from entering into, 
participating in, maintaining, organizing, implementing, enforcing, 
inviting, offering, or soliciting an agreement with any competitor to 
divide markets, to allocate customers, or to fix prices.
    Section II, Paragraph C bars Step N Grip from urging any competitor 
to raise, fix or maintain its price or rate levels or to limit or 
reduce service terms or levels.
    Section II, Paragraph D forbids Step N Grip from instructing or 
encouraging a distributor or seller to engage in the conduct proscribed 
in Section II, Paragraphs A through C.
    Sections III-VI of the Proposed Order impose certain standard 
reporting and compliance requirements on Step N Grip.
    The Proposed Order will expire in 20 years.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2015-27934 Filed 11-2-15; 8:45 am]
 BILLING CODE 6750-01-P