Onkyo U.S.A. Corporation, a manufacturer of audio components, has agreed to settle Federal Trade Commission charges that it violated a 1982 FTC order under which it agreed not to fix prices or engage in unlawful resale price maintenance. Under the proposed settlement, Onkyo would pay a $225,000 civil penalty for the order violation.
Onkyo, based in Ramsey, New Jersey, manufactures and distributes audio components, including tuners, amplifiers, tape decks, speakers and related products.
According to the FTC complaint detailing the charges, the 1982 FTC order prohibits Onkyo from taking any course of action to fix prices or maintain the resale prices at which its products would be sold. The order bars Onkyo from "requesting, requiring or coercing" any retailer or dealer to "maintain, adopt or adhere to any resale price." The order also requires that any Onkyo promotional or sales material that lists suggested resale prices state that the prices are "suggested only" and advise retailers that they are free to determine their own resale prices.
The FTC now has 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 and that it should raise those prices;
- requesting retailers to report other dealers who deviated from Onkyo's pricing policy, and responding by threatening or intimidating the discounters;
- failing to disclose on price lists, advertising and promotional materials that the prices Onkyo listed as "resale" prices were suggestions only, and were not binding on dealers;
- failing to provide its sales agents and representatives with copies of the 1982 consent order to assure compliance with its provisions.
The proposed consent judgment to settle the charges would require that Onkyo pay a $225,000 civil penalty within 30 days of the date the court approves the settlement.
"The Commission's action in this case demonstrates our commitment to monitor and enforce its orders," noted William J. Baer, Director of the Bureau of Competition. "The Commission takes compliance with its orders very seriously and the Bureau will not hestitate to recommend civil penalties where order violations are found," Baer said.
The FTC vote to file the complaint and proposed consent judgment in court was 5-0. They were filed in the U.S. District Court for the District of Columbia this morning. The settlement requires the court's approval to become binding.
NOTE: A consent judgment is for settlement purposes only and does not constitute an admission of a law violation. Consent judgments are subject to court approval and have the force of law when signed by the judge.
Copies of the complaint and consent judgment, as well as prior documents associated with this case, are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261.
(Civil Action No. 95-CV01378)
(FTC File No. C-3092)