Macy's Northeast, Inc., et al.; Proposed Consent Agreement With Analysis to Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 932 3115]

Macy's Northeast, Inc., et al.; 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

require, among other things, the New York-based retail department store

subsidiaries to comply with the Pre-Sale Availability Rule under the

Magnuson-Moss Warranty Act, to inform their retail store managers of

their compliance responsibilities, and to develop and implement a

program for instructing their sales personnel about the availability

and location of manufacturers' warranty information.

DATES: Comments must be received on or before September 6, 1994.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT: Jeffrey Klurfeld or Gerald Wright,

FTC/San Francisco Regional Office, 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 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 Section 4.9(b)(6)(ii) of the Commission's Rules of

Practice (16 CFR 4.9(b)(6)(ii)).

The Federal Trade Commission having initiated an investigation of

Macy's Northeast, Inc., Macy's South, Inc., Macy's California, Inc.,

and Bullock's, Inc. (``proposed respondents'' or ``respondents'',

corporations, and wholly-owned subsidiaries of R.H. Macy & Co., Inc., a

Delaware corporation, and it is now appearing that proposed respondents

are will 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 Macy's Northeast, Inc., Macy's

South, Inc., Macy's California, Inc., and Bullock's, Inc., by their

duly authorized officers, and counsel for the Federal Trade Commission

that:

1. Proposed respondent Macy's Northeast, Inc. is a corporation

organized, existing, and doing business under and by virtue of the laws

of the State of Delaware, with its principal office and place of

business located at 151 W 34th Street, New York, New York 10001.

Proposed respondent Macy's South, Inc. is a corporation organized,

existing, and doing business under and by virtue of the laws of the

State of Delaware, with its principal office and place of business

located at 151 W. 34th Street, New York, New York 10001.

Proposed respondent Macy's California, Inc. is a corporation

organized, existing, and doing business under and by virtue of the laws

of the State of Delaware, with its principal office and place of

business located at 50 O'Farrell Street, San Francisco, California

94102.

Proposed respondent Bullock's Inc. is a corporation organized,

existing, and doing business under and by virtue of the laws of the

State of Delaware, with its principal office and place of business

located at 50 O'Farrell Street, San Francisco, California 94102.

2. This agreement is for settlement purposes only and does not

constitute an admission by proposed respondents that the law has been

violated as alleged in the draft of complaint here attached.

3. Proposed respondents admit all the jurisdictional facts set

forth in the draft complaint here attached.

4. Proposed respondents waive:

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. 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 respondents, 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 this proceeding.

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

respondents, (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 respondents' addresses as stated in this agreement shall

constitute service. Proposed respondents waive any right they 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 respondents have read the proposed complaint and order

contemplated hereby. They understand that once the order has been

issued, they will be required to file one or more compliance reports

showing that they have fully compiled with the order. Proposed

respondents further understand that they may be liable for civil

penalties in the amount provided by law for each violation of the order

after it becomes final.

Order

The definitions of terms contained in Sec. 101 of the Magnuson-Moss

Warranty Act, 15 U.S.C. 2301, and in rule 702, 16 C.F.R. Sec. 702.1,

promulgated thereunder, shall apply to the terms of this Order.

I

It is ordered that respondents Macy's Northeast, Inc., Macy's

South, Inc., Macy's California, Inc., and Bullock's, Inc.,

corporations, their successors and assigns, and their officers,

representatives, agents and employees, directly or through any

corporation, subsidiary, division or other device in connection with

the sale or offering for sale of any consumer product in or affecting

commerce, do forthwith cease and desist from failing to make a text of

any written warranty on a consumer product actually costing more than

$15 readily available for examination by prospective buyers prior to

sale through utilization of one or more means specified in 16 CFR

702.3(a), as amended.

II

It is further ordered that respondents shall, within thirty (30)

days of the date of service of this Order, deliver to each current

retail store manager and assistant or operations manager engaged in the

sale of consumer products on behalf of respondents, a copy of this

Order to cease and desist.

III

It is further ordered that respondents shall, within thirty (30)

days of the date of service of this Order, instruct all current retail

store managers and assistant or operations managers engaged in the sale

of consumer products on behalf of respondents as to their specific

obligations and duties under the Magnuson-Moss Warranty Act (15 U.S.C.

2301) and this Order.

IV

It is further ordered that respondents shall, for a period of not

less than four (4) years from the date of service of this order,

instruct all future retail store managers and assistant or operations

managers who will be engaged in the sale of consumer products on behalf

of respondents, before they assume said responsibilities for

respondents, as to their specific obligations and duties under the

Magnuson-Moss Warranty Act (15 U.S.C. 2301) and this Order.

V

It is further ordered that respondents shall, within thirty (30)

days of the date of service of this Order, develop and implement a

program to instruct their sales personnel about the availability and

location of warranty information.

VI

It is further ordered that respondents shall, for a period of not

less than five (5) years from the date of service of the Order,

maintain and upon request make available to the Federal Trade

Commission for inspection and copying (i) copies of all written

instructions provided by respondents to their retail store managers and

assistant and operations managers and sales personnel regarding their

obligations and duties under the Magnuson-Moss Warranty Act (15 U.S.C.

2301) and this order; (ii) copies of signs posted by respondents in

their retail store outlets designed to elicit prospective buyers'

attention to the availability of the text of written warranties for

review upon request; and (iii) copies of the text of written warranties

made readily available by respondents' retail store outlets for

examination by prospective buyers on request.

VII

It is further ordered that respondents, for a period of six (6)

years from the date of service of this Order, shall notify the

Commission at least thirty (30) days prior to any dissolution,

assignment, or sale resulting in the emergence of a successor

corporation, the creation or dissolution of subsidiaries, or any other

change in the corporation that may affect compliance obligations

arising out of the Order.

VIII

It is further ordered that respondents shall, within ninety (90)

days after service of this Order on them, file with the Commission a

report in writing, setting forth in detail the manner and form in which

they have 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 Macy's Northeast, Inc., Macy's South, Inc.,

Macy's California, Inc., and Bullock's, Inc. (``proposed

respondents''), wholly-owned subsidiaries of R.H. Macy & Co., Inc.

Proposed respondents operate department stores in New York, California,

and a number of other states.

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 proposed order contained in the agreement.

The complaint alleges that the proposed respondents have violated a

Rule promulgated by the Federal Trade Commission (16 CFR 702.3(a))

pursuant to the Magnuson-Moss Consumer Warranty Act (15 U.S.C. 2301).

This Rule requires the proposed respondents to make manufacturers'

warranty information available to consumers. The purposes of this Act,

and the Rule, are to improve the information available to consumers, to

prevent deception, and to promote competition, in the marketing of

consumer product warranties offered by manufacturers.

The Rule, called the ``Pre-Sale Availability Rule,'' gives

retailers the option of either (1) displaying the text of

manufacturers' warranties in close proximity to the product display; or

(2) furnishing the text of manufacturers' warranties to customers upon

request, and prominently displaying signs advising of the availability

of such warranties. The complaint alleges that the proposed respondents

have not complied with either of these options.

The proposed order requires proposed respondents to comply with

this Rule, to inform their retail store executives of their compliance

responsibilities, and to develop a program for instructing their sales

personnel about the availability and location of manufacturers'

warranty information. Proposed respondents will be subject to civil

penalties if they do not comply with the order.

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.

Donald S. Clark,

Secretary.

[FR Doc. 94-16277 Filed 7-5-94; 8:45 am]

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