FOR YOUR INFORMATION..........................DECEMBER 18, 1991
MICHIGAN PROPOSALS REGARDING FUNERAL INDUSTRY PORTEND BENEFITS -- BUT ALSO SOME COSTS -- FOR CONSUMERS
Repealing a provision in Michigan law that prohibits joint ownership of both a funeral home and a cemetery could lead to better service and lower prices for consumers, staff of the Federal Trade Commission said in comments made public today. On the other hand, the staff said, another proposal might prohibit funeral industry members from "bundling" together various goods and services into a single package to be sold for less than they could be purchased separately. If broader than necessary to prevent harm to competition, such a restriction might thwart some of the benefits that could result from repealing the joint- ownership restriction.
The FTC staff comments, presented in a letter signed by Mark D. Kindt, Director of the FTC's Cleveland Regional Office, were submitted in response to a request from Michigan State Sen. John D. Pridnia for comments on two bills under consideration in the Michigan Senate -- Sen. Bill Nos. SB-301 and SB-302.
SB-302 would repeal the prohibition on joint ownership or operation of both a funeral establishment and a cemetery, and this might allow cemetery and funeral entities to pass on to consumers savings from reduced overhead, administrative and transportation costs, staff said. Further, according to Kindt's letter, consumers then "could make decisions about the burial and funeral service in one location, saving expense and perhaps easing personal concerns during a particularly stressful period."
- more - Michigan Funeral Bills--12/17/91)
Some of the proposed provisions regulating the practices of affiliated cemeteries and funeral establishments, however, could prevent some of the above benefits from being realized, staff said. For instance, provisions requiring that prices be the same regardless of whether customers do business with the affiliated entity are likely to have the effect of prohibiting the bundling of products and services at discounted prices. The antitrust laws already provide remedies for situations in which consumer injury might result from bundling. In contrast, a general prohi- bition on bundling could not take into account case-by-case fac- tors, and "consequently, may discourage efficiencies in situa- tions that present no competition problems," staff added.
In sum, staff said, the bills propose changes that would tend to increase competition and benefit consumers, but a general prohibition against offering a bundle of goods and services at a discount, if broader than necessary to prevent harm to competi- tion, could prevent the achievement of some benefits for consumers.
These comments represent the views of the FTC's Cleveland Regional Office, and are not necessarily the views of the Commission or any individual Commissioner.
Copies of the comments are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY 1-866-653-4261.
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MEDIA CONTACT: Bonnie Jansen, Office of Public Affairs 202-326-2161
STAFF CONTACT: Mark D. Kindt, Cleveland Regional Office 668 Euclid Avenue, Suite 520-A Cleveland, Ohio 44114 216-522-4207