Toy Company Agrees To Stop Setting Retail Prices
MICHAEL J. SNIFFEN
Jan. 31, 1995
WASHINGTON (AP) _ Playmobil USA Inc., one of the nation's largest specialty toy companies, agreed Tuesday to stop practices the Justice Department said illegally forced retailers to sell its toys at fixed prices. Some Pennsylvania customers will get refunds.
In a separate settlement, the company agreed to pay $275,000 to Pennsylvania, including $190,000 in refunds to its customers there, state Attorney General Ernie Preate Jr. announced.
It was the second case developed by the Clinton administration against a manufacturer for trying to fix retail prices. The first was against a maker of indoor tanning products.
The Reagan administration had halted prosecution of so-called resale price maintenance cases. The Bush administration developed one case, against a maker of hockey skates, filed shortly after it left office.
``It is our responsibility to enforce the laws as enacted by Congress and interpreted by the courts,'' said Assistant Attorney General Anne K. Bingaman, head of the antitrust division. ``Although we currently have fewer than 10 pending resale price maintenance investigations, we will continue to act when violations of law in this area ... can be proved ... under the legal standards set by the Supreme Court and the lower courts.''
Playmobil, whose parent company is Geobra Brandstatter GmbH & Co. KG. of Germany, has annual sales of more than $18 million and makes small plastic figurines, vehicles and buildings sold in sets organized around themes such as the Wild West, a Victorian doll house, a hospital or a pirate ship.
Playmobil agreed to drop the contested practices that Justice claimed eliminated competition among retail stores. The agreement was filed, along with a civil antitrust suit which it resolved, in U.S. District Court here.
A complaint against Playmobil, headquartered in Dayton, N.J., was brought to the department by the Pennsylvania attorney general's office, which also announced its own settlement with Playmobil on Tuesday.
As a result of the state settlement, refunds of 5 percent to 10 percent of purchase price will be made to consumers who can prove they bought at least $50 worth of Playmobil products from Pennsylvania stores from Jan. 1, 1991, to Dec. 31, 1993. Playmobil sold about $1 million worth of toys in the state annually during that period.
Any restitution money left after claims have been paid would be given to charities that serve children aged 3 to 11.
Preate said the company's practices ``resulted in consumers paying more for Playmobil toys than they would have paid if the retail stores had been free to compete by cutting prices.''
Playmobil did not admit any wrongdoing.
The Justice Department alleged that Playmobil reached agreements on retail prices with certain dealers and enforced minimum resale prices by threatening other dealers with termination unless they stopped discounting its products. The company has for several years had a written resale policy and has published retail price ranges for all of its products, the government said.
If approved by the court, a proposed consent decree embodying the agreement would bar Playmobil from entering retail price agreements with dealers or from threatening discounters for 10 years. For five years, the decree would prohibit Playmobil from setting a minimum advertised price policy that withholds advertising rebates from dealers who advertise Playmobil products at a discount.
EDITOR'S NOTE _ Consumers can request a claim form by writing to: Playmobil Claims Administrator, 1435 Strawberry Square, Harrisburg, Pa., 17120.