Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-01-21
NFA|R PRACTICE
CHARGES DROPPED
Trade Commission Denies
Jurisdiction in Advertising
Cases of 1924.

The Federal Trade Commission to-
day announced dismissal of charges OF
unfair competition and unfair trade
practices brought by the commission
in 1924 against five publishers and press
associations and advertising agencies.
The announcement of the commits
sion regarding its action did not GO
into details nor reveal the vote, but 1t
was understood that dismissal was
made on the ground of lack of jurts-
diction.
Questions of fairness or unfairness OF
the charges complained of were not
discussed in the laconic announcement
of the commissions action because OF
the lack of jurisdiction"
Those named in the complaint were
the American Association of Advertising
Agencies, its officers, executive board
and members; the American Press As
ISOLATION, the American Newspaper Pub
fishers Association, the Southern News
paper Publishers Association, its off,
GERS and directors, and the Six-Point
League, its officers, executive committee
and members.
Defendants Faced Four Charges.
The defendants were charged with
unfair competition in violation of the
Federal Trade Commission act on the
grounds that, by concerted action, they
attempted:
81. To prevent certain national ad-
vertisers from obtaining their adver-
Using from daily newspapers at the So
called net rate.
-. To monopolize the placing Of ma
tional advertising In daily newspapers
by advertising agencies for the special
benefit Of one of the respondents, the
American Association of Advertising
Agencies, and to prevent competition
as to commission charged by such
agencies for service rendered.
-. To promote these schemes through
unfair agreements among the respond
ents.
-. To promote these schemes by CO.
operative efforts among the individual
members OF each Of the respondent or
CARNATIONS"
The respondents answered:
"(A) That the conditions complained
OF are not in any sense the result of
any agreement or combination and con-
spiracy among the respondents;
"(B) That there has been no restraint
OF any ones interstate trade and no I'M
fair methods OF interstate trade or COM
petition;
"(C) That the practice, the scope,
kind and character of service in ma
tional advertising. and relations OF the
parties are normal developments over O
long term OF yeers are in no sense ar
tifleial, fore aUrained;
(D) ~ aone of the subject mat
ter set l-..n in the complaint has to do
with interstate trade or commerce. and
that the commission is without juris-
diction."
The commission charged that these
alleged practices and conspiracies would
have the following effects:
Regulates National Advertisers"
"O To regulate in part the BUSH
ness OF national advertisers by con-
straining them to employ respondent
agencies and other agencies, which
maintain said standard trade differ
entail as their minimum rate of remu-
neration for engaging, on behalf OF said
national advertisers, in the activities
and commerce between various States
or throughout the United States, de-
Scribed In paragraph 3 hereof, and by
hinoering and preventing said adver-
tiSers from themselves engaging In said
activities, and from employing agencies
charging for said activities less than the
standard trade differential: or in the
alternative, constraining said national
advertisers to pay for direct advertising
at aforesaid gross rates and in addition
thereto. to engage In said activities at
their own cost and expense. To lessen,
hinder and obStruct the competition in
interstate commerce of such national
advertisers as do not employ agencies
that maintain the standard trade Diff
ferential.
"(2l To regulate the publication by
newspapers OF national advertising in
interstate commerce and to restrict such
national advertising to newspapers
throughout the United States selected
and approved by respondents: to con-
strain newspaper publishers throughout
the United States to charge for the
publication in interstate commerce of
such national advertising at aforesaid
gross rates; to hamper and obstruct
the circulation, distribution and sale In
interstate commerce of those news
papers whose publishers accept and
publish the national advertising of d.
rect advertisers and Of national adver-
tisers that employ agencies not adhering
to the standard trade differential.
"(9 To regulate the business Of adj
vertising agencies throughout the
United States by preventing them from
engaging in their activities in inter-.
state commerce as described in para
graph three hereof, except upon terms
prescribed by respondents, and by en-
forcing the standard trade differential
as the minimum price for their said
activities; hinder, obstruct and SUBJ
lessen competition, and par
ticularly competition in price, among
agencies engaged in interstate COM
merce as aforesaid; to prevent national
tAxr 70 mAw
or said described house
agencies, from themselves engaging in
the activities described In said para
graph three.
Competition Denied Public"
80 To deprive the public of the
benefits q free competition, and par
ticularly of competition in price, be-
tween agencies; to enhance the cost of
national advertising in newspapers, and
to increase the cost of the dis
tribution of goods, wares and merchan-
disc sold in interstate commerce by
means. in whole or in part, OF national
advertising. and thereby to enhance the
cost to the public of the goods, wares
and merchandise nationally advertised
in newspapers.
The alleged acts and practices of
are all to the prejudice of
the public and constitute unfair meth
DDS Of competition in commerce within
the intent and meaning of the Federal
Trade Commission act"
AS explained today by Elisha Hanson,
counsel for the American Newspaper
Publishers Association, the case hinged
largely on the efforts, through circula-
ton OF recognition lists" and other
means, to keep publishers informed
about advertising agencies which were
on the accepted basis Of keep
Ing all of their commissions. These
lists also dealt with those which were
offering inducements to clients by split
ting commissions obtained from the
publishers, as we'll as advertisers who
we're attempting, directly or indirectly,
TO obtain rebates of the amounts of