South Lake Tahoe Lodging Association; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 971-0110]

South Lake Tahoe Lodging Association; 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 September 21, 1998.

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:

William Baer, FTC/H-374, Washington, DC 20580. (202) 326-2932.

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 July 20, 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 (``Commission'') has accepted, subject

to final approval, an Agreement Containing Consent Order (``Order'')

from South Lake Tahoe Lodging Association (``SLTLA'' or ``Proposed

Respondent''). The proposed Order is designed to prevent the recurrence

of anticompetitive practices engaged in by SLTLA and its members in

connection with an effort by the Proposed Respondent and its members to

eliminate or restrict the use of signs advertising the prices at which

its members provided lodging services in the South Lake Tahoe,

California, area.

The Agreement Containing Consent Order, if finally accepted by the

Commission, would settle charges that Proposed Respondent's conduct

violated Section 5 of the Federal Trade Commission Act by eliminating

one form of competition between lodging establishments in the South

Lake Tahoe area and by making it more difficult for consumers to get

accurate information about the prices for lodging in that area. The

proposed complaint, described below, relates the basis for this relief.

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 Proposed Complaint

According to the Commission's proposed complaint, SLTLA is a

nonprofit corporation whose members are operators of lodging

establishments in the South Lake Tahoe, California, area. SLTLA's

associate members include operators of lodging establishments and

related businesses in the South Lake Tahoe, California, area and the

adjacent areas of Nevada. According to the proposed complaint, SLTLA's

members and associate

[[Page 39572]]

members constitute approximately 70 percent of the available lodging in

the South Lake Tahoe area. The Commission's complaint alleges that

SLTLA and its members entered into an agreement to suspend the use of

signs advertising prices for lodging. The evidence also shows that the

primary purpose of the agreement was to increase the room rates charged

for lodging in the South Lake Tahoe area of Northern California and

Nevada and to end what members saw as a ``destructive'' price war on

motel rooms in the South Lake Tahoe area by eliminating the posting of

signs advertising the prices at which its individual members offer such

lodging.

According to the proposed complaint, the effects of the agreement

are that price competition among providers of lodging in the South Lake

Tahoe area has been reduced, and consumers have been deprived of the

benefits of readily available information about the price for lodging.

The Proposed Order

The proposed Order contains provisions designed to remedy the

violations charged and to prevent the respondent from engaging in

similar acts and practices in the future. Part II of the proposed order

would prohibit SLTLA from carrying out, participating in, inducing,

suggesting, urging, encouraging, or assisting any agreement,

combination or conspiracy with its members, or agreement, combination

or conspiracy with some of its members, to restrict the posting of

signs advertising the prices at which its individual members offer

lodging. Part II would not bar SLTLA from exercising rights protected

under the First Amendment to the United States Constitution to petition

any federal, state or local government executive agency or legislative

body concerning legislation, rules, programs, or procedures, or to

participate in any federal, state or local administrative or judicial

proceeding.

The proposed order also requires the respondent to amend its

corporate by-laws to incorporate by reference Paragraph II of this

Order; to distribute a copy of the amended by-laws to each of its

members; to provide a copy of the consent agreement and complaint to

all of its current members and to any new members for a period of five

(5) years; and to file one or more reports detailing compliance with

the order.

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

proposed order. This analysis is not intended to constitute an official

interpretation of the agreement and proposed order or to modify their

terms in any way.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 98-19678 Filed 7-22-98; 8:45 am]

BILLING CODE 6750-01-M