Maryland Attorney General Francis B. Burch yesterday accused the Federal Trade Commission of "rolling over and playing dead" instead of enforcing one of its own orders, and announced that Goodyear Tire & Rubber Co. will not sell its tires through oil companies in Maryland for at least 18 months.
Burch said at a press conference in a Maryland gas station that the public is being "bilked" by the oil companies. He said oil company markekting divisions are forcing gas stations to buy certain products, like tires, froim them "at markups of up to 15 per cent."
Those markups are actually commissions paid by the tire company to the oil company because the oil company is forcing the gas stations not to sell any other tires, Burch said.
Burch said Goodyear had signed a consent degree in an antitrust case filed yesterday in Circuit Court in Baltimore, agreeing not "to sell tires to any oil company in Maryland for the next 18 months."
The practice of oil companies forcing gas stations to sell certain products exclusively and collecting commissions from the product manufacturer for such arrangements was outlawed by an FTC order which was upheld by the Supreme Court in 1965.
Burch claims the oil companies "merely set up straw transactions to disguise the fact that they are still doing the same thing."
"And the FTC just sat on its duff and did nothing even after we told them it was still happening," Burch said.
Thomas M. Wilson, chief of Maryland's antitrust division, said he called the FTC in 1974 to tell them that gas station owners still were being forced to sell certain items at large markups. "They called me back six months later and said their order was not being violated," Wilson said.
Arthur Harneck, owner of the Citgo gas station in Forrestville where the press conference was held, said he figured "we were paying about $4 a tire more than a tire store would have to pay, just because we had to buy it through Citgo."
Burch said that the oil marketing companies would keep the extra money as a virtual commission for giving Goodyear the exclusive outlets in the gas stations.
"This practice isn't limited to tires," Burch said "It is happening with just about everything sold at gas stations - batteries, accessories, everything.
"We hope the United States government will follow the lead of Maryland and put a stop to all of this," Burch said.
Another gas station owner at the press conference, Bob Hall, from a nearby Mobil station, said he is being forced by buy car batteries at huge markups.
"When I got a load of 50 batteries, I had to pay $29.95 each for them,' he said. "In the same delivery truck were 50 more of the same batteries that were going to an auto supply store, and they were paying $19.95 each of them."
FTC compliance attorney Robert Gravatt acknowledged that his office had been contacted by Maryland, but said "we did not see where our order was being violated."
"Unless a company is foolish enough to put out a written directive, it is practically impossible to prove charges under this order," Gravatt said. "It may be a coincidence, for example, that a Texaco dealer sells only Texaco products. Maybe that's all he wants to sell.
"We have conducted numerous field investigations, and we have never had sufficient evidence to bring a civil suit," Gravatt said.
Asked why Goodyear would sign such a consent order in Maryland if it was not violating any order, Gravatt said, "People will say that they will no longer do things, even if they haven't done them before, just to end a pending suit."
The Maryland Attorney General's Office has been entangled in a legal squable with Citgo Oil Co. and Goodyear. Last May, the U.S. Court of APpeals held that Maryland had standing to bring federal antitrust action against Goodyear in connection with these activities.
Goodyear officials confirmed that they had signed the consent decree.
"Under (the 1965 court order), tire companies are prohibited from paying commissions to oil companies for tire; purchased from the manufacturers for sale to service stations," Goodyear spokesman Bill Newkirk said.
"Currently some oil companies buy tires from maufacturers, then sell them to service stations. No commission is involved. In our opinion, this is perfectly legal," the spokesman said.
"However, to avoid costly and time consuming litigation, we signed the consent decree, he added.