Marketer of Rug Accessory Settles FTC Charges of Invitation to Collude with Competitor

A company that sells rug accessories designed to keep rugs from curling at the corners has agreed to settle Federal Trade Commission charges that it illegally invited its closest competitor to coordinate prices.

The company, Step N Grip, LLC, sells NeverCurl, a product that can be attached to the corners of a rug so that they stay flat on the floor. Like its closest competitor, Step N Grip sells most of its inventory on Amazon.com, according to the FTC.

The complaint alleges that earlier this year, Step N Grip and its closest competitor, identified as Competitor A, reduced their prices to compete with each other and gain sales. After a week of this rivalry, Step N Grip approached Competitor A, proposing that it agree to fix and raise the price of their competing rug devices. Competitor A reported the invitation to collude to the FTC. According to the FTC, Step N Grip’s invitation to collude was an unfair method of competition that violated Section 5 of the Federal Trade Commission Act.

Under the proposed settlement agreement, Step N Grip is required to stop communicating with its competitors about prices. It is also barred from entering into, participating in, inviting, or soliciting an agreement with any competitor to divide markets, to allocate customers, or to fix prices; and from urging any competitor to raise, fix, or maintain its price or rate levels or limit or reduce service. The order is in effect for 20 years.

Details about the case are set forth in the analysis to aid public comment for this matter. The Commission vote to issue the complaint and accept the proposed consent order for public comment was 4-0.

The FTC will publish the consent package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through November 27, 2015, after which the Commission will decide whether to make the proposed consent order final. Comments can be filed electronically or in paper form by following the instructions in the “Supplementary Information” section of the Federal Register notice.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000 per day.

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave., NW, Room CC-5422, Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.