Baby Furniture Plus Association, Inc.; Proposed Consent Agreement With Analysis To Aid Public Comment

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,

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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