PROPOSED CONSENT ORDER
The Federal Trade Commission has accepted an agreement to a proposed consent order from the Institute of Store Planners ("ISP"). ISP has its principal place of business in Tarrytown, New York.
The proposed consent order has been placed on the public record for thirty (30) days for reception of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the Commission will again review the agreement and the comments received, and decide whether it should withdraw from the agreement or make final the agreement's proposed order.
ISP's membership is composed of professional design practitioners who provide architectural, store design, store planning, merchandise planning, traffic flow planning fixture and lighting design, in-store graphics and visual presentation services to retail stores. Its membership is also comprised of trade members such as suppliers and fabricators of products and materials used in store design, as well as general contractors who provide labor and project management services and build the projects.
The complaint alleges that ISP engages in substantial activities for the economic benefit of its members. The complaint alleges that ISP has approximately 800 members, many of whom provide store planning services for a fee or who are employed by store planning or design firms that provide store planning services for a fee. It alleges that ISP is and has been organized in substantial part for the profit of its members.
The complaint charges that ISP has violated Section 5 of the Federal Trade Commission Act by acting as a combination of its members and in agreement with some of its members to restrain price and non-price competition among its members and others. The complaint alleges that in furtherance of the combination and agreement, ISP has adopted and maintained provisions in its Code of Ethics that state, among other things, "a member shall not render professional services without compensation" (ISP Code of Ethics, Section 2) and "a member shall not knowingly compete with another member on the basis of professional charges, or use donations as a device for obtaining professional advantage" (ISP Code of Ethics, Section 3). The Code also provides that "a member shall not offer his services in competition except as provided by such competition codes as the Institute may establish" (ISP Code of Ethics, Section 4). Applicants for membership in ISP must agree in writing to follow ISP's By-laws, which contain its Code of Ethics.
The complaint alleges that the above acts and practices constitute unfair methods of competition which have restrained competition unreasonably and injured consumers by discouraging price competition among store planners and depriving consumers and users of store planners' services of the benefit of free and open competition among store planners.
ISP has signed a consent agreement containing the proposed consent order. The proposed consent order would prohibit ISP from restricting, impeding, declaring unethical or unprofessional or advising against price competition among its members. That is, ISP would no longer be able to restrict members from providing free or discounted services.
To ensure and monitor compliance, the consent order provides, among other things, that within 90 days after the order becomes final ISP shall remove from ISP's Code of Ethics, its constitution and bylaws and any existing ISP policy statement, commentary or guideline- including those appearing on ISP's website-any provision, policy statement, commentary or guideline which is inconsistent with the order. The order also requires that ISP publish in ISP International News and on its website, the revised versions of such documents. In addition, the order requires ISP to publish a copy of the order and complaint in the ISP International News. It further provides that the order and complaint shall be published on the ISP website for at least one year, with a link placed in a prominent position on the website's home page. The proposed consent order also contains other provisions to monitor compliance.
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 its terms.