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I. FEDERAL CASES
Nintendo of America Inc., 114 F.T.C. 702 (1991) (consent order).
The Commission prohibited Nintendo, for five years, from terminating
dealers on the basis of the resale price they charge. Although I was not at
the Commission when it considered the Nintendo matter, I do not think it
is merely a coincidence that the complaint also alleged that Nintendo
accounted for more than 80% of all home video game equipment sales.
The presence of market power makes vertical restraints far more suspect
because of the potential for even nonprice restraints to have
anticompetitive effects. Nintendo-like relief also may be appropriate in
egregious situations where a manufacturer demonstrates a willful
disregard of the law on per se vertical price restraints for example, if a
manufacturer continues to engage in unlawful RPM after repeated
enforcement warnings.
Kreepy Krauly, 114 F.T.C. 777 (1991) (consent order).
The Commission alleged that a Florida manufacturer of swimming pool
cleaning equipment entered into written agreements with dealers to
maintain resale prices. Kreepy Krauly settled with Commission and
agreed to rescind the paragraph of its dealer agreements that required
dealers to agree to maintain resale prices, and to cease including that
paragraph in dealer agreements. The consent order also prohibited Kreepy
Krauly from entering into agreements with dealers to maintain resale
prices.
United States v. California SunCare, Inc., 1994-2 Trade Cas. (CCH) ¶ 70,843
(C.D. Cal. 1994) (final judgment).
DOJ brought charges against California SunCare, an indoor tanning
products manufacturer, alleging that, from November 1992 through April
1994, the defendant entered into agreements with certain dealers to fix and
maintain the resale prices of its products. California SunCare settled with
DOJ and agreed to refrain from price-fixing, announcing a pricing policy,
or threatening to terminate or actually terminating for non-compliance
with suggested retail prices for a period of five years.
Keds Corporation, 117 F.T.C. 389 (1994) (consent order).
The Commission settled charges that Keds Corporation allegedly had
agreed with some dealers to maintain resale prices on certain types of
athletic and casual shoes, solicited commitments from dealers regarding
pricing, and encouraged dealers to report noncomplying dealers. The
consent order required Keds to refrain from: fixing the prices at which any
dealer may advertise or sell the product; coercing any dealer to adopt or
adhere to any resale price; attempting to secure commitments from dealers about the prices at which they would advertise or sell the products; or
requiring or even suggesting that dealers report other dealers who
advertise or sell any Keds products below a suggested resale price. The
order also required Keds to inform its dealers that they were free to
advertise and sell Keds products at prices of their own choosing. For five
years, the order required Keds to incorporate a similar statement in any
materials sent to dealers suggesting resale prices.
Reebok International, 120 F.T.C. 20 (1995) (consent order).
The FTC alleged that Reebok and Rockport fixed the resale prices of their
products. The settlement prohibited both companies from fixing the
prices at which dealers advertised or sold athletic or casual footwear
products to consumers. The settlement also prohibited the companies from
coercing or pressuring any dealer to maintain or adopt any resale price, or
from attempting to secure their commitment to any resale price. The order
required Reebok and Rockport to inform their dealers in writing that
dealers were free to advertise and sell Reebok and Rockport products at
any price they chose, despite any suggested retail price established by the
companies.
United States v. Playmobil USA, Inc., 1995-1 Trade Cas. (CCH) ¶ 71,000
(D.D.C. 1995) (final judgment).
Playmobil USA had maintained a Retailer Discount Policy that provided
for the termination of any Playmobil dealer that failed to adhere to certain
Playmobil suggested price ranges. In January 1995, DOJ filed a civil suit
that alleged that Playmobil enforced this policy in a manner that violated
the antitrust laws by reaching agreements with some of its retailers about
what their retail prices would be. DOJ and Playmobil entered a settlement decree prohibiting Playmobil from reaching agreements with its dealers
on retail price levels, and also from threatening dealers with termination
for discounting off the retail price.
Onkyo U.S.A. Corporation, 1995-2 Trade Cas. (CCH) ¶ 71,111 (D.D.C. 1995)
(final judgment).
Onkyo U.S.A. Corporation, a manufacturer of audio components, agreed
to settle FTC charges that it violated a 1982 FTC order under which it
agreed not to fix prices or engage in unlawful resale price maintenance.
The complaint alleged that Onkyo sales representatives violated the terms
of the order by: agreeing with a dealer to establish resale prices for the
Onkyo products the dealer outlets sold to consumers; requesting that the
dealer adhere to specified resale prices or price levels, informing the
dealer that its prices were too low; directing the dealer to raise those
prices, asking retailers to report other dealers who deviated from Onkyo's
pricing policy; and responding to such deviations with threats and
intimidation. Under the settlement, Onkyo paid $225,000 in civil
penalties for violation of the original order.
New Balance Athletic Shoe, Inc., 122 F.T.C. 137 (1996) (consent order).
The Commission charged that New Balance entered into RPM agreements
with some of its retailers, in which such dealers agreed to raise retail
prices on New Balances products, maintain certain prices or price levels set by New Balance, or refrain from discounting New Balances products
for a certain period of time. New Balance induced dealers to enter into
these agreements by monitoring retailer prices, threatening to terminate or
suspend shipments to discounting retailers, and demanding that retailers
raise their prices. New Balance also assured retailers that New Balance
would secure similar price agreements from other competing retailers or
otherwise prevent unapproved discounting of New Balance athletic shoes.
The settlement prohibited New Balance from fixing or controlling the
prices at which retailers could sell the companys athletic footwear.
American Cyanamid Corp., 123 F.T.C. 1257 (1997) (consent order).
The Commission alleged that, between 1989 and 1995, American
Cyanamid entered into written agreements with its retail dealers under its
rebate programs, pursuant to which American Cyanamid offered to pay its
dealers substantial rebates on each sale of its crop protection chemicals
that was made at or above specified minimum resale prices. This
conditioning of financial payments on dealers' charging a specified
minimum price amounted to an agreement on resale prices. The consent
decree enjoined the defendant from seeking agreements by retailers to fix
prices.
Fair Allocation System, Inc., 126 F.T.C. 626 (1998) (consent order).
An association of auto dealers settled charges that it threatened to boycott
Chrysler if the manufacturer did not agree to change its vehicle allocation
system to restrict vehicle supply to discounters engaged in Internet sales.
Nine West Group, Inc., 65 Fed. Reg. 13386 (March 13, 2000) (proposed consent agreement).
The Commission ordered a manufacturer of womens shoes to cease
seeking agreements by retailers to fix, raise or stabilize shoe prices to
consumers.
