The Federal Trade Commission has given final approval to a consent agreement with Reebok International, Ltd. and its subsidiary, The Rockport Company, Inc., settling charges that they fixed the resale prices of their products. The Commission's action makes the consent order provisions binding on the respondents.
Reebok is based in Stoughton, Massachusetts, and Rockport is based in Marlboro, Massachusetts.
Under the final order, Reebok and Rockport must refrain from fixing, controlling, or maintaining the resale price at which any dealer may advertise, promote, offer for sale or sell any Reebok or Rockport brand athletic or casual footwear. The order also prohibits them from coercing or pressuring any dealer to maintain or adopt any resale price, and from attempting to secure their commitment to any resale price.
In addition, for 10 years, the settlement prohibits Reebok and Rockport from notifying a dealer in advance that it is subject to partial or temporary suspension or termination if it sells or advertises the respondent's products below a resale price that they designate, and that the dealer will be subject to some greater sanction if it continues or resumes selling or advertising the products below the designated resale price.
Finally, the order requires Reebok and Rockport to inform their dealers by letter and, for five years, on any materials in which they suggest a resale price, that dealers can advertise and sell Reebok and Rockport products at any price they choose.
The consent agreement was announced for a public-comment period on May 4, 1995. The Commission vote to issue it in final form occurred on July 18, and was 4-1, with Commissioner Roscoe B. Starek, III dissenting. In his dissenting statement, Commissioner Starek said he believes that the "fencing-in" provisions related to resale price advertising and to Reebok's structured termination policy in the settlement "are unnecessarily broad and may enjoin efficient conduct."
NOTE: A consent agreement is for settlement purposes only and does not constitute admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions by the respon- dents. Each violation of such an order may result in a civil penalty of up to $10,000.
A news release summarizing the complaint and consent agree- ment was issued at the time the Commission accepted the consent agreement for public comment. Copies of that release and of the complaint and final order 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. To find out the latest FTC News as it is announced, call the FTC's NewsPhone recording at 202-326-2710. FTC news releases and other materials are also available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov
(FTC Docket No. C-3592)