Fastline Publication, Inc., et al.; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 971-0039]

Fastline Publication, Inc., et al.; 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 or deceptive acts or

practices or unfair methods of competition. The attached Analysis to

Aid Public Comment describes both the allegations in the draft

complaint that accompanies the consent agreement 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 July 17, 1998.

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

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

FOR FURTHER INFORMATION CONTACT: Willian Baer or Willard Tom, FTC/H-

375, Washington, D.C. 20580. (202) 326-2932 or 326-2786.

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 above-captioned 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. 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 May 11, 1998), on the World Wide Web, at ``http://www.ftc.gov/os/

actions97.htm.'' A paper copy can be obtained from the FTC Public

Reference Room, Room H-130, Sixth Street and Pennsylvania Avenue, NW,

Washington, DC 20580, either in person or by calling (202) 326-3627.

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)).

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 Fastline

Publications, Inc. (``Fastline'') and Mid-America Equipment Retailers

Association (``Mid-America''). The agreement would settle allegations

that Fastline and Mid-America violated Section 5 of the Federal Trade

Commission Act by agreeing not to advertise or publish prices for new

farm equipment in the Fastline Kentucky Farm Edition.

The proposed consent order has been placed on the public record for

sixty (60) days for receipt of comments by interested persons. Comments

received during this period will become part of the public record.

After sixty (60) days, the Commission will 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.

The purpose of this analysis is to facilitate public comment on the

proposed consent order. The analysis is not intended to constitute an

official interpretation of the agreement and proposed order, or to

modify in any way their terms. Further, the proposed consent order has

been entered into for settlement purposes only, and does not constitute

an admission by Fastline or Mid-America that the law has been violated

as alleged in the complaint.

The Complaint

Fastline publishes, among other things, picture buying guides for

new and used farm equipment, which are mailed free to farmers and

ranchers in over 40 states. Farm equipment advertised in Fastline's

buying guides ranges from relatively inexpensive lawn mowers to heavy

duty farm equipment such as tractors, plows, planters, cotton pickers,

and combines costing tens of thousands of dollars. Fastline's principal

source of revenue is the farm equipment dealers who advertise in its

buying guides. Fastline currently publishes 20 monthly editions of its

farm equipment buying guides, serving 41 states. Farm equipment dealers

view the Fastline Kentucky Farm Edition as a key vehicle for

advertising to farmers located in Kentucky.

Mid-America is a trade association for farm equipment dealers. It

was formed in 1992 through the merger of the Indiana Implement Dealers

Association, Inc., and the Kentucky Farm and Power Equipment Retailers

Association (the ``Kentucky Retailers Association''). About 90 percent

of the farm equipment dealers in Kentucky and Indiana are members of

Mid-America.

In early 1991, several Kentucky farm equipment dealers complained

to Fastline about dealers advertising prices, including discount

prices, for new farm equipment in the Fastline Kentucky Farm Edition.

The price advertisements were, among other things, facilitating

downward pressure on prices for new farm equipment. In protest, several

dealers withheld their advertising from the Fastline Kentucky Farm

Edition until Fastline agreed not to publish advertisements that

included prices for new farm equipment.

Price advertisements for new farm equipment began to reappear in

the Fastline Kentucky Farm Edition by the end of 1991. In early 1992,

Fastline was invited to the annual meeting of the Kentucky Retailers

Association, during which several of its members expressed their

dislike for price advertising and threatened to withdraw or otherwise

cancel their advertisements in the Fastline Kentucky Farm Edition if

Fastline continued to publish advertisements that included prices for

new equipment. Fastline, threatened with the loss of substantial

advertising

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revenue, acquiesced and stopped accepting advertisements that included

prices for new equipment. Following the merger of the Kentucky and

Indiana trade associations, Mid-America sought and obtained Fastline's

reaffirmation of the agreement not to publish prices for new equipment

in the Fastline Kentucky Farm Edition.

These agreements have injured consumers by: (1) reducing price

competition among farm equipment dealers for new farm equipment; (2)

depriving consumers of truthful and nondeceptive price information; and

(3) depriving consumers of the benefits of competition.

The Proposed Consent Order

Fastline and Mid-America have signed a consent agreement containing

a proposed order. Part II of the proposed order would enjoin Mid-

America from impeding the advertising of prices or other terms of sale

for farm equipment or parts. Additionally, Mid-America would be

enjoined from participating in or assisting in any boycott regarding

the advertising or prices or other terms of sale for farm equipment or

parts.

Part III of the proposed order would enjoin Fastline from agreeing

to prohibit or restrict the advertising or prices or other terms of

sale for farm equipment or parts. Notwithstanding this provision,

however, the proposed order would not prevent Fastline from adopting

and enforcing reasonable guidelines with respect to advertisements that

Fastline reasonably believes would be false or deceptive within the

meaning of Section 5 of the Federal Trade Commission Act.

Part IV of the proposed order would require Mid-America to amend

its by-laws to incorporate by reference Paragraph II of the order, and

distribute a copy of the amended by-laws to each of its members. In

addition, the proposed order would require Mid-America to distribute

copies of the proposed order and accompanying complaint to: (a) Persons

whose activities are affected by the order; or who have

responsibilities with respect to the subject matter of the order, and

(b) each of its members.

Part V of the proposed order would require Fastline to distribute

copies of the order and accompanying complaint to persons whose

activities are affected by the order, or who have responsibilities with

respect to the subject matter of the order. In addition, the proposed

order would require Fastline to publish annually for each of the next

five years in each edition of its farm equipment buying guides a copy

of the NOTICE attached to the order.

Parts VI, VII, and VIII of the proposed order impose certain

reporting requirements in order to assist the Commission in monitoring

compliance with the order.

The proposed consent order would terminate twenty (20) years after

the date it is issued.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 98-13141 Filed 5-15-98; 8:45 am]

BILLING CODE 6750-01-M