[Federal Register Volume 60, Number 127 (Monday, July 3, 1995)]
[Notices]
[Pages 34537-34540]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16254]
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FEDERAL TRADE COMMISSION
[File No. 941-0007]
Council of Fashion Designers of America et al.; Proposed Consent
Agreement With Analysis to Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair acts and practices and unfair methods of competition, this
consent agreement, accepted subject to final Commission approval, would
prohibit, among other things, two New York based corporations or their
members from attempting to fix or reduce modeling fees, and would
require them to take steps to educate fashion designers that price-
fixing is illegal.
DATES: Comments must be received on or before September 1, 1995.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT:
Michael Antalics or Karen Mills, FTC/S-2627, Washington, DC 20580.
(202) 326-2821 or (202) 326-2052.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the
Commission's rules of practice (16 CFR 2.34), notice is hereby given
that the following consent agreement containing a consent order to
cease and desist, having been filed with and accepted, subject to final
approval, by the Commission, has been placed on the public record for a
period of sixty (60) days. Public comment is invited. Such comments or
views will be considered by the Commission and will be available for
inspection and copying at its principal office in accordance with
Sec. 4.9(b)(6)(ii) of the Commission's rules of practice (16 CFR
4.9(b)(6)(ii)).
Agreement Containing Consent Order To Cease and Desist
In the Matter of: The Council of Fashion Designers of America, a
corporation; and 7th on Sixth, Inc., a corporation. File No. 941-
0007.
The Federal Trade Commission (``Commission''), having initiated an
investigation of certain acts and
[[Page 34538]]
practices of the Council of Fashion Designers of America and 7th on
Sixth, Inc., hereinafter sometimes referred to collectively as
``proposed respondents,'' and it now appearing that the proposed
respondents are willing to enter into an agreement containing an order
to cease and desist from engaging in certain acts and practices being
investigated,
It is hereby agreed by and between proposed respondents, by their
duly authorized officers and attorneys, and counsel for the Commission
that:
1. Proposed respondent Council of Fashion Designers of America
(hereinafter ``CFDA'') is a not-for-profit corporation organized,
existing, and doing business under and by virtue of the laws of the
State of New York, with its office and principal place of business
located at 1412 Broadway, New York, New York 10018.
2. Proposed respondent 7th on Sixth, Inc. (hereinafter ``7th on
Sixth'') is a not-for-profit corporation organized, existing, and doing
business under and by virtue of the laws of the State of New York, with
its office and principal place of business located at 1412 Broadway,
New York, New York 10018.
3. Proposed respondents admit all the jurisdictional facts set
forth in the draft of complaint.
4. Proposed respondents waive:
(a) Any further procedural steps;
(b) The requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law;
(c) All rights to seek judicial review or otherwise to challenge or
contest the validity of the order entered pursuant to this agreement;
and
(d) Any claim under the Equal Access to Justice Act.
5. This agreement is for settlement purposes only and does not
constitute an admission by proposed respondents that the law has been
violated as alleged in the draft of complaint or that the facts as
alleged in the draft complaint, other than jurisdictional facts, are
true.
6. This agreement shall not become part of the public record of the
proceeding unless and until it is accepted by the Commission. If this
agreement is accepted by the Commission it, together with the draft of
complaint contemplated thereby, will be placed on the public record for
a period of sixty (60) days and information with respect thereto will
be publicly released. The Commission thereafter may either withdraw its
acceptance of this agreement and so notify the proposed respondents, in
which event it will take such action as it may consider appropriate, or
issue and serve its complaint (in such form as the circumstances may
require) and decision, in disposition of the proceeding.
7. This agreement contemplates that, if it is accepted by the
Commission, and if such acceptance is not subsequently withdrawn by the
Commission pursuant to the provisions of Sec. 2.34 of the Commission's
rules, the Commission may, without further notice to the proposed
respondents, (1) issue its complaint corresponding in form and
substance with the draft of complaint and its decision containing the
following order to cease and desist in disposition of the proceeding
and (2) make information public with respect thereto. When so entered,
the order to cease and desist shall have the same force and effect and
may be altered, modified, or set aside in the same manner and within
the same time provided by statute for other orders. The order shall
become final upon service. Delivery by the U.S. Postal Service of the
complaint and decision containing the agreed-to order to proposed
respondents' addresses as stated in this agreement shall constitute
service. Proposed respondents waive any right to any other manner of
service. The complaint may be used in construing the terms of the
order, and no agreement, understanding, representation, or
interpretation not contained in the order or the agreement may be used
to vary or contradict the terms of the order.
8. Proposed respondents have read the proposed complaint and order
contemplated hereby. They understand that once the order has been
issued, they will be required to file one or more compliance reports
showing that they have fully complied with the order. Proposed
respondents further understand that they may be liable for civil
penalties in the amount provided by law for each violation of the order
after the order becomes final.
Order
I
It is ordered that, as used in this order, the following
definitions shall apply:
A. ``Respondents'' means the Council of Fashion Designers of
America and 7th on Sixth, Inc.;
B. ``Person'' means any individual, partnership, association,
company, or corporation;
C. ``CFDA'' means the Council of Fashion Designers of America, its
directors, trustees, officers, members, representatives, committees,
subcommittees, boards, divisions, agents, employees, successors and
assigns;
D. ``7th on Sixth'' means 7th on Sixth, Inc., its directors,
trustees, officers, members, representatives, committees,
subcommittees, boards, divisions, agents, employees, successors and
assigns.
II
It is further ordered that respondents CFDA and 7th on the Sixth,
directly or indirectly, or through any corporate or other device, in or
affecting commerce, as ``commerce'' is defined in section 4 of the
Federal Trade Commission Act, 15 U.S.C. 44, forthwith cease and desist
from entering into, attempting to enter into, organizing or attempting
to organize, implementing or attempting to implement, or continuing or
attempting to continue, any combination, agreement, or understanding,
express or implied, for the purpose or with the effect of:
A. Raising, lowering, fixing, maintaining or stabilizing the price,
terms or other forms or conditions of compensation paid for modeling or
modeling agency services; or
B. Encouraging, advising, pressuring, assisting, inducing, or
attempting to induce any person to engage in any action prohibited by
this order.
Provided, however, that it shall not be deemed a violation of this
order for more than one member of CFDA and/or 7th on Sixth to employ or
use the services of the same person where such employment or use is not
otherwise in furtherance of any action prohibited by this order.
III
It is further ordered that Respondents CFDA and 7th on Sixth each
shall:
A. Within thirty (30) days after the date on which this order
becomes final, distribute by certified U.S. first-class mail a copy of
this order and the accompanying complaint, and the notice attached in
Appendix A hereto, to:
1. Each of its members, officers, directors, and employees, and
each fashion designer who has shown in the fashion shows organized by
7th on Sixth;
2. Each person to whom it has, at any time prior to the effective
date of this order, communicated the benefits of membership in 7th on
Sixth, or whom it has invited to join 7th on Sixth, as identified in
Appendix B hereto;
3. The International Model Managers Association, c/o David
Blasband, Esq., Deutsch, Klagsbrun & Blasband, 800 Third Avenue, New
York 10022;
[[Page 34539]]
4. Each of the modeling agencies listed in Appendix C attached
hereto; and
B. For a period of five (5) years from the date this order becomes
final, cause to be made minutes of all business meetings of its
membership, its board of directors, its committees and subcommittees.
Such minutes shall (i) identify all persons attending such meeting,
(ii) include a certification, signed by the presiding officer and
secretary under penalty of perjury, that states whether prices, terms,
or other forms or conditions of compensation paid for modeling or
modeling agency services were discussed at the meeting, and (iii)
summarize what was discussed at the meeting. If prices, terms, or other
forms or conditions of compensation paid for modeling or modeling
agency services were discussed at any business meeting subject to this
order, then the minutes of such meeting shall identify the participants
in the discussion and state in detail the substance of the
discussion(s). Minutes and the required certifications shall be
retained for a period of five (5) years from the date the minutes were
created. Such minutes shall be provided to the Commission upon request.
C. Within sixty (60) days after the date on which this order
becomes final, and annually thereafter for five (5) years, on or before
the anniversary date of this order,
1. Communicate either orally or in writing to its officers,
directors, employees and members concerning their obligations under
this order;
2. Obtain from each of its officers, directors, and employees an
annual written certification, that he or she (a) has read, understands
and agrees to abide by the terms of this order, (b) is not aware of any
violation of this order, and (c) has been advised and understands that
failure of CFDA or 7th on Sixth, as defined in the order, to comply
with this order may subject either or both of the respondents to
penalties for violation of the order; and
3. Retain the certifications required by Section III.C.2. Such
certifications shall be provided to the Commission upon request.
IV
It is further ordered that each respondent shall:
A. Notify the Commission at least thirty (30) days prior to any
proposed change in the respondent such as a dissolution, assignment, or
sale resulting in the emergence of a successor corporation, the
creation or dissolution of subsidiaries, bankruptcy, or any other
change in the respondent which may affect compliance obligations under
this order; and
B. File a written report with the Commission within sixty (60) days
after the date the order becomes final, and annually thereafter for
five (5) years on the anniversary of the date the order became final,
and at such other times as the Commission may by written notice
require, setting forth in detail the manner and form in which the
respondent has complied and is complying with the order.
V
It is further ordered that, for the purpose of determining or
securing compliance with this order, each respondent shall permit any
duly authorized representative of the Commission:
A. Upon reasonable notice to respondent access, during office hours
and in the presence of counsel, to inspect and copy all books, ledgers,
accounts, correspondence, memoranda and other records and documents in
the possession or under the control of each respondent relating to any
matters contained in this order; and
B. Upon five days' notice to respondent and without restraint or
interference from it, to interview officers, directors, employees, or
agents of respondent, who may have counsel present.
VI
It is further ordered that this Order shall terminate twenty (20)
years from the date this Order becomes final.
Appendix A
Dear ____________________: [Respondent] has agreed, without
admitting any violation of the law, to the entry of a Consent Order
by the Federal Trade Commission prohibiting certain conduct. A copy
of the Order is enclosed.
The Order spells out [Respondent]'s obligations in greater
detail, but we want you to know and understand the following:
The Council of Fashion Designers of America and 7th on Sixth,
Inc. may not negotiate on behalf of fashion designers collectively
with models or modeling or modeling agency services, and may not
enter into or continue any agreement or understanding, express or
implied, for the purpose or with the effect of affecting the prices
paid for modeling or modeling agency services.
Non-compliance with this Order may subject [Respondent] to
penalties for violation of the order, and may be reported to the
Federal Trade Commission.
Sincerely,
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[Respondent]
Enclosure
Appendix B
Mr. Victor Alfaro, 130 Barrow Street, Suite 105, New York, N.Y.
10014
Mr. Robert Danes, 488 Seventh Avenue, New York, N.Y. 10018
Ms. Gemma Kahng, 550 Seventh Avenue, New York, N.Y. 10018
Ghost, c/o Showroom Seven, 498 Seventh Avenue, New York, N.Y. 10018
Mr. Mark Eisen, 214 West 39th Street, New York, N.Y. 10018
Mr. Byron Lars, 29 West 57 Street, New York, N.Y. 10019
Ms. Mary McFadden, 240 West 35th Street, New York, N.Y. 10001
Magaschioni, Inc., 499 Seventh Avenue, New York, N.Y. 10018
The Next Generation, 242 West 38th Street, New York, N.Y. 10018
Mr. Mark Badgley, Badgley Mischka, 525 Seventh Avenue, New York,
N.Y. 10018
Mr. James Mischka, Badgley Mischka, 525 Seventh Avenue, New York,
N.Y. 10018
Ms. Jennifer George, Jennifer George, Inc., 530 Seventh Avenue, New
York, N.Y. 10018
Mr. Fernando Sanchez, Fernando Sanchez Ltd., 5 West 19th Street, New
York, N.Y. 10011
Ms. Joan Vass, Joan Vass NY, 117 East 29th Street, New York, N.Y.
10016
Ms. Adrienne Vittadini, 1441 Broadway, New York, N.Y. 10018
Mr. Byron Lars, 29 West 57th Street, New York, N.Y. 10019
Appendix C
Ms. Bethann Hardison, Bethann Management Co., 36 North Moore Street,
New York, NY 10013
Boss Models, 317 West Thirteenth Street, New York, NY 10014
Ms. Frances Grill, President, Click Model Management, 881 7th Ave.,
Suite 1013, New York, NY 10019
Mr. Michael Flutie, President, Company Ltd., 270 Lafayette St.,
Suite 1400, New York, NY 10012
Ms. Monique Pillard, President, Elite Model Management, 111 East 2nd
Street, New York, NY 10010
Ms. Ellen Harth, Elite Runway, 149 Madison Avenue, New York, NY
10016
Joseph Hunter, President, Ford Models, Inc., 344 East 59th Street,
New York, NY 10022
Mr. Charles Bennett, Senior Vice President, International Management
Group, 170 Fifth Avenue, 10th Floor, New York, NY 10010
Ms. Irene Marie, President, I'M New York, 120 Wooster St., New York,
NY 10012
Ms. Irene Marie, President, Irene Marie, Inc., 728 Ocean Drive,
Miami Beach, FL 33139
Ms. Milie Pellet, President, Next Management, 23 Watts Street, 5th
Floor, New York, NY 10013
Now Model Management, 568 Broadway, Suite 504-A, New York, NY 10012
Pauline Bernatchez, President, Pauline's, 379 West Broadway, 5th
Floor, New York, NY 10012
Ms. Natasha Esch, President, Wilhelmina Models, Inc., 300 Park
Avenue South, 2nd Floor, New York, NY 10010
Women Model Management, 107 Greene Street, New York, NY 10012
Ms. Barbara Lantz, President, Zoli Management, 3 West 18th Street,
New York, NY 10011
[[Page 34540]]
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission has accepted an agreement to a
proposed consent order from The Council of Fashion Designers of
America, Inc. (CFDA) and 7th on Sixth, Inc.
The proposed consent order has been placed on the public record for
sixty (60) days for reception of comments by interested persons.
Comments received during this period will become part of the public
record. After sixty (60) days, the Commission will again review the
agreement and the comments received and will decide whether it should
withdraw from the agreement or make final the agreement's proposed
order.
The complaint alleges that CFDA, a trade association of fashion
designers, and 7th on Sixth, a not-for-profit corporation, and their
members, have engaged in acts and practices that have unreasonably
restrained competition among fashion designers. The complaint alleges
that CFDA and 7th on Sixth fixed prices for the hiring of runway
models. The complaint alleges that this price fixing agreement among
purchasers of modeling and modeling agency services violates Section 5
of the Federal Trade Commission Act.
CFDA and 7th on Sixth have signed a proposed consent agreement that
requires them to cease and desist from any agreement which has the
purpose or effect of fixing prices paid or terms of employment for
modeling or modeling agency services and from encouraging others to
engage in such activities. The proposed consent order requires that
CFDA and 7th on Sixth distribute a copy of the complaint and a letter
notifying their members and employees, modeling agencies and other
designated parties listed in the order that neither the CFDA nor 7th on
Sixth may negotiate on behalf of fashion designers collectively with
models or modeling agencies, and they may neither continue nor enter
into any agreement for the purpose of affecting modeling prices.
The proposed order includes a proviso which makes clear that
fashion designers who choose to employ or use the services of the same
model will not be deemed in violation of the order, where such
employment or use is not otherwise in furtherance of any action
prohibited by the order. The proviso will permit fashion designers to
hire models independently without fear that the fact that they hire the
same model itself will result in liability. The order also permits two
or more designers to agree to hire and use models jointly without
violating the order, so long as they do not agree to do so in
furtherance of the kind of prohibited agreement to which CFDA and 7th
on Sixth were party.
In order to deter future law violations and facilitate FTC review
of compliance with the order, the proposed order requires CFDA and 7th
on Sixth to make and keep minutes of all meetings of their membership
board, committees or subcommittees, for five years. These minutes must
indicate if prices or terms of modeling services are discussed at any
meeting. CFDA and 7th on Sixth must provide these minutes to the FTC
upon request. The parties must also communicate to their members,
officers, directors and employees their obligations under this order.
Officers, directors and employees must in turn provide annual written
certification that they have received such notice.
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 their terms.
Donald S. Clark,
Secretary.
[FR Doc. 95-16254 Filed 6-30-95; 8:45 am]
BILLING CODE 6750-01-M