Korean Video Stores, et al.; Proposed Consent Agreement With Analysis to Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 931-0134]

Korean Video Stores, 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

prohibit, among other things, a Maryland based video store association

and its members from entering into any agreement to raise or fix prices

in the retail video tape rental business; and would require its members

to display an announcement of the settlement in their respective stores

and to publish the text of the corrective posters in three Korean-

language newspapers in the Washington, DC area.

DATES: Comments must be received on or before June 12, 1995.

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

Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

Joseph G. Krauss, FTC/H-324, Washington, DC 20580. (202) 326-2713.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 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, have 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)).

In the Matter of: Korean Video Stores Association of Maryland,

an unincorporated association,

Chang Hyun Cho, individually and trading and doing business as

Hana Video;

Bong Soo Ha, individually and trading and doing business as

Video Town;

Yoo Kwan Jun, individually and trading and doing business as

Harford Video;

Dae Yong Kang, individually and trading and doing business as

Daenamoo Video;

Yong Hoon Kang, individually and trading and doing business as

Lotte Gifts Store;

Mi La Kim, individually and trading and doing business as Koryo

Video;

Ki Sik Kim, individually and trading and doing business as Video

Center;

Suk C. Kim, individually and trading and doing business as Nalee

Video;

Ju Young Lee, individually and trading and doing business as

Young Video;

Kyeong Hae Lee, individually and trading and doing business as

Korean Corner;

Chang Jin Park, individually and trading and doing business as

Samsung Video;

Mi Hwa Park, individually and trading and doing business as

Sarangbang Video;

Young Min Ro, individually and trading and doing business as

Hanyang Video;

Chae Sul Song, individually and trading and doing business as

Lucky Gifts;

Tae Eung Yu, individually and trading and doing business as

Hyundai Video; and

Seung Man Yun, individually and trading and doing business as

Gaymi Video; File No. 931-0134.

Agreement Containing Consent Order

The Federal Trade Commission (``Commission''), having initiated an

investigation of certain acts and practices of the Korean Video Stores

Association of Maryland, Chang Hyun Cho, Bong Soo Ha, Yoo Kwan Jun, Dae

Young Kang, Yong Hoon Kang, Mi La Kim, Ki Sik Kim, Suk C. Kim, Ju Young

Lee, Kyeong Hae Lee, Chang Jin Park, Mi Hwa Park, Young Min Ro, Chae

Sul Song, Tae Eung Yu, and Seung Man Yun, and it now appearing that the

Korean Video Stores Association of Maryland, Chang Hyun Cho, Bong Soo

Ha, Yu Kwan Jeon, Dae Yong Kang, Yong Hoon Kang, Mi La Kim, Ki Sik Kim,

Suk C. Kim, Ju Young Lee, Kyeong Hae Lee, Chang Jin Park, Mi Hwa Park,

Young Min Ro, Chae Sul Song, Tae Eung Yu, and Seung Man Yun,

hereinafter sometimes referred to as ``proposed Respondents,'' are

willing to enter into an agreement containing an Order to cease and

desist from certain acts and providing for other relief,

It is hereby agreed by and between the proposed Respondents and

counsel for the Commission that:

1. Proposed Respondent Korean Video Stores Association of Maryland

is an unincorporated trade association. Its mailing address is c/o

Nalee Video, 13-G Aquahart Plaza, Glen Burnie, MD 21061.

Proposed Respondent Chang Hyun Cho is an individual trading and

doing business as Hana Video, 220 N. Crain Highway, Glen Burnie, MD

21061.

Proposed Respondent Bong Soo Ha is an individual trading and doing

business as Video Town, 2092 Veirs Mill Road, Rockville, MD 20581.

Proposed Respondent Yu Kwan Jeon is an individual trading and doing

business as Harford Video, 8904 Harford Road, Baltimore, MD 21234.

Proposed Respondent Dae Yong Kang is an individual trading and

doing as Daenamoo Video, 5722 York Road, Baltimore, MD 21212.

Proposed Respondent Yong Hoon Kang is an individual trading and

doing business as Lotte Gifts Store, 2201 N. Charles Street, Baltimore,

MD 21218.

Proposed Respondent Mi La Kim is an individual trading and doing

business as Koryo Video, 10820-G Rhode Island Avenue, Beltsville, MD

20705.

Proposed Respondent Ki Sik Kim is an individual trading and doing

business as Video Center, 29 W. North Avenue, Baltimore, MD 21201.

Proposed Respondent Suk C. Kim is an individual trading and doing

business as Nalee Video, 13-G Aquahart Plaza, Glen Burnie, MD 21061.

Proposed Respondent Ju Young Lee is an individual trading and doing

business ad Young Video, 11790 Parklawn Drive, Rockville, MD 20852.

Proposed Respondent Kyeong Hae Lee is an individual trading and

doing business as Korean Corner, 12207 Veirs Mill Road, Wheaton, MD

20906. [[Page 18412]]

Proposed Respondent Chang Jin Park is an individual trading and

doing business as Samsung Video, 3425 N. Chathom Road #108, Ellicott

City, MD 21042.

Proposed Respondent Mi Hwa Park is an individual trading and doing

business as Sarangbang Video, 2430 York Road, Timonium, MD 21093.

Proposed Respondent Young Min Ro is an individual trading and doing

business as Hanyang Video, c/o Lucky World (Laurel), 14222 Cherry Lane

Ct., Laurel, MD 20707.

Proposed Respondent Chae Sul Song is an individual trading and

doing business as Lucky Gifts, 1690-D Annapolis Road, Odenton, MD

21113.

Proposed Respondent Tae Eung Yu is an individual trading and doing

business as Hyundai Video, 10539 Greenbelt Road, Seabrook, MD 20706.

Proposed Respondent Seung Man Yun is an individual trading and

doing business as Gaymi Video, 801 S. Crain Highway, Glen Burnie, MD

21061.

2. Proposed Respondents admit all the jurisdictional facts set

forth in the draft of complaint.

3. Proposed Respondent 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. Any claim under the Equal Access to Justice Act.

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 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 the proceeding.

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

constitute an admission by the proposed Respondents that the law has

been violated as alleged in the draft of complaint or that the facts as

alleged in the draft complaint, other than 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 Sec. 2.34 of the Commission's

rules, the Commission may, without further notice to the proposed

Respondents, (1) Issue its complaint correspondent 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 (2) make information public with 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. Proposed Respondents understand that once the

Order has been issued, they will be required to file one or more

compliance reports showing that they have fully complied 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.

It is ordered that, as used in this Order, the following

definitions shall apply:

(A) ``Respondent Korean Video Association'' means the Korean Video

Stores Association of Maryland, its predecessors, subsidiaries,

divisions, members, committees, and groups and affiliates controlled by

the Korean Video Stores Association of Maryland, their directors,

officers, employees, agents, and representatives, and their successors

and assigns.

(B) ``Individual Respondents'' means Chang Hyun Cho, individually

and trading and doing business as Hana Video; Bong Soo Ha, individually

and trading and doing business as Video Town; Yoo Kwan Jun,

individually and trading and doing business as Harford Video; Dae Yong

Kang, individually and trading and doing business as Daenamoo Video;

Yong Hoon Kang, individually and trading and doing business as Lotte

Gifts Store; Mi La Kim, individually and trading and doing business as

Koryo Video, Ki Sik Kim, individually and trading and doing business as

Video Center; Suk C. Kim, individually and trading and doing business

as Nalee Video; Ju Young Lee, individually and trading and doing

business as Young Video; Kyeong Hae Lee, individually and trading and

doing business as Korean Corner; Chang Jin Park, individually and

trading and doing business as Samsung Video; Mi Hwa Park, individually

and trading and doing business as Sarangbang Video; Young Min Ro,

individually and trading and doing business as Hanyang Video; Chae Sul

Song, individually and trading and doing business as Lucky Gifts; Tae

Eung Yu, individually and trading and doing business as Hyundai Video;

Seung Man Yun, individually and trading and doing business as Gaymi

Video; and their respective successors and assigns.

(C) ``Respondents'' means the Respondent Korean Video Association

and the Individual Respondents.

(D) ``Commission'' means the Federal Trade Commission.

(E) ``Video tapes'' means pre-recorded video cassette tapes.

(F) ``Retail video tape rental business'' means the business of

renting pre-recorded video cassette tapes for a fee to retail

customers.

II

It is further ordered that Respondents, directly or indirectly, or

through any corporation, association, or other device, in connection

with the retail, video tape rental business, in or affecting commerce,

as ``commerce'' is defined in the Federal Trade Commission Act, as

amended, forthwith cease and desist from:

(A) Entering into, attempting to enter into, organizing,

continuing, adhering to, or maintaining any combination, conspiracy,

contract, agreement, understanding, plan, or program with any person in

the retail video tape rental business to construct, fix, stabilize,

raise, maintain, or otherwise interfere or tamper with the prices

charged or other terms or conditions for retail video tape rentals;

(B) Recommending or encouraging any person in the retail video tape

rental business to charge certain prices or set other terms or

conditions for retail video tape rentals;

(C) For a period of three (3) years after the date this Order

becomes final, continuing any formal or informal [[Page 18413]] meeting

of the Respondent Korean Video Association or of any Individual

Respondents, after:

1. Any person makes a statement, addressed to or audible to the

body of the meeting, concerning the prices of retail video tape rentals

and Respondents fail to declare such statement to be out of order;

2. Any person makes two such statements concerning the prices of

retail video tape rentals and Respondents fail to eject him or her from

the meeting; or

3. Two people make such statements concerning the prices of retail

video tape rentals.

Provided, however, that without regard to the obligations of

Respondent Korean Video Association under Paragraph II. (C), if a

person making a prohibited statement is not ejected, and such meeting

continues, then the Individual Respondents shall instead leave such

meeting and within thirty (30) days after such meeting shall report to

the Commission the circumstances of such meeting, a description of the

prohibited statements and Respondents' actions in response thereto.

III

It is further ordered that Respondent Korean Video Association,

directly or indirectly, or through any corporation, association, or

other device, in connection with the retail video tape rental business,

in or affecting commerce, as ``commerce'' is defined in the Federal

Trade Commission Act, as amended, forthwith cease and desist from:

(A) Prohibiting, regulating, or advising against any form of price

competition between or among persons in the retail video tape rental

business; and

(B) Inviting, coordinating or providing a forum for any discussion

or agreement between or among persons in the retail video tape rental

business concerning prices charged for retail video tape rentals.

IV

It is further ordered that:

(A) Each Individual Respondent shall, within thirty (30) days after

the date this Order becomes final, prepare and for a period of sixty

(60) days, clearly display a corrective poster at each Individual

Respondent's place of business. Each poster shall be in both English

and Korean, shall be no less than two feet by two feet in size, and

shall have the text of Appendices A and B, attached to this Order,

enlarged and conspicuously displayed thereon; and

(B) Respondent Korean Video Association shall, within thirty (30)

days after the date this Order becomes final, publish Appendix B to

this Order in the Metropolitan Washington, DC editions of the

Periodicals Korea Times, Joong Ang Ilbo, and Chosun Ilbo.

V

It is further ordered that:

(A) Respondent Korean Video Association and the Individual

Respondents shall, within ninety (90) days after the date this Order

becomes final, file with the Secretary of the Federal Trade Commission

a verified written report setting forth in detail the manner and form

in which Respondents have complied and are complying with this Order.

Among such other information as may be required, the Individual

Respondents' compliance reports shall contain a picture of the

corrective poster as displayed and the dates such poster was displayed;

(B) Respondent Korean Video Association shall, annually for three

(3) years on the anniversary of the date this Order becomes final, file

with the Secretary of the Federal Trade Commission a verified written

report setting forth in detail the manner and form in which Respondents

have complied and are complying with this Order; and

(C) Respondent Korean Video Association and the Individual

Respondents shall, for a period of three (3) years after the date this

Order becomes final, notify the Federal Trade Commission at least

thirty (30) days prior to any proposed change in any Respondent, such

as dissolution, assignment, sale resulting in the emergency of a

successor organization, or the creation or dissolution of subsidiaries,

or any change in such Respondent that may affect compliance obligations

arising out of this Order.

VI

It is further ordered that, for the purpose of determining or

securing compliance with this Order, Respondents shall permit any duly

authorized representative of the Commission:

(A) 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 a Respondent relating to any matters contained in this

Order; and

(B) Upon five days' notice to a Respondent and without restraint or

interference from it, to interview officers, directors, or employees of

such Respondent.

VII

It is further ordered that this order shall terminate twenty (20)

years from the date of issuance.

Appendix A

Annoucement

The Korean Video Stores Association of Maryland (the ``Korean

Video Association'') and its individual members (Chang Hyun Cho,

Bong Soo Ha, Yoo Kwan Jun, Dae Young Kang, Young Hoon Kang, Mi La

Kim, Ki Sik Kim, Suk C. Kim, Ju Young Lee, Kyenong Hae Lee, Chang

Jin Park, Mi Hwa Park, Young Min Ro, Chae Sul Song, Tae Eung Yu, and

Seung Man Yun) have entered into a consent agreement with the

Federal Trade Commission (``Commission'') to settle the Commission's

charges that the Korean Video Association and its individual members

named above violated section 5 of the Federal Trade Commission Act

when they jointly decided to increase prices for retail video tape

rentals in 1993. The U.S.antitrust laws, including the Sherman Act

and the Federal Trade Commission Act, prohibit competitors in the

same line of business from jointly setting prices they charge to

their customers.

Pursuant to this consent agreement, the Commission has issued an

Order that prohibits the Korean Video Association and its individual

members from jointly deciding prices that they charge to their

customers in the retail video tape rental business. The Order also

prohibits the Korean Video Association and its individual members

from taking any other actions that may harm price competition.

The Korean Video Association and its individual members also

understand and agree to honor that each person in the retail video

tape rental business must unilaterally and independently determine

its own prices.

Korean Video Stores Association of Maryland

Chang Hyun Cho, Hana Video

Dae Yong Kang, Daenamoo Video

Ki Sik Kim, Video Center

Kyeong Hae Lee, Korean Corner

Young Min Ro, Hanyang Video

Seung Man Yun, Gaymi Video

Bong Soo Ha, Video Town

Yong Hoon Kang, Lotte Gifts Store

Suk C. Kim, Nalee Video

Chang Jin Park, Samsung Video

Chae Sul Song, Lucky Gifts

Yoo Kwan Jun, Harford Video

Mi La Kim, Koryo Video

Ju Young Lee, Young Video

Mi Hwa Park, Sarangbang Video

Tae Eung Yu, Hyundai Video

Appendix B

(Appendix B is the Korean version of Appendix A and is available

from the Commission's Public Reference Branch, H-30, 6th and Pa.

Ave., NW, Washington, DC 20580). [[Page 18414]]

Analysis of Proposed Consent Order to Aid Public Comment

The Federal Trade Commission (``the Commission'') has accepted an

agreement to a proposed consent order from the Korean Video Stores

Association of Maryland, Chang Hyun Cho, Bong Soo Ha, Yoo Kwan Jun, Dae

Yong Kang, Yong Hoon Kang, Mi La Kim, Ki Sik Kim, Suk C. Kim, Ju Young

Lee, Kyeong Hae Lee, Chang Jin Park, Mi Hwa Park, Young Min Ro, Chae

Sul Song, Tae Eung Yu, and Seung Man Yun (``Respondents'').

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.

The Commission's investigation of this matter concerns the

Respondents' joint retail video tape rental pricing activity in 1993.

The Commission alleges in its proposed complaint that: the Respondents

agreed to increase the retail price of Korean language video tape

rentals in the Metropolitan Washington, D.C. area; and, in furtherance

of the joint price increase agreement, the Respondents announced the

price increase to the general public by displaying at each Respondent's

place of business a poster setting forth the joint price increase

agreement and signed in the name of the Korean Video Stores Association

of Maryland (``Video Association''). The Commission alleges that the

Respondents' acts and practices constitute unfair methods of

competition in violation of Section 5 of the Federal Trade Commission

Act.

The order, accepted for public comment, prohibits the Respondents

from directly or indirectly entering into a price fixing agreement in

the retail video tape rental business. The order also prohibits the

Respondents from taking any other actions that may harm price

competition in the retail video tape rental business. In addition, the

order requires the individual Respondents to either discontinue or

leave a meeting of the Respondents if a person or persons make

impermissible statements concerning retail video tape rental fees.

The order would also prohibit the Video Association from

interfering with its individual members' pricing decisions and from

acting as a forum for discussion or agreement on retail video tape

rental fees. The order further requires the Respondents to display a

corrective poster at each Respondent's place of business, and requires

the Video Association to publish the Korean text (translated to Korean

by Commission staff from the English version approved by the

Commission) of the corrective poster in three major local Korean

language daily newspapers.

Under the order, the Respondents are required to file written

compliance reports with the Commission. The order terminates

automatically twenty years from the date of issuance.

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.

Donald S. Clark,

Secretary.

[FR Doc. 95-8861 Filed 4-10-95; 8:45 am]

BILLING CODE 6750-01-M