Bylaw prohibiting certain advertising claims by memhers of trade association

No. 80. Bylaw prohibiting certain advertising claims by memhers of trade association. The Federal Trade Commission has informed a trade association that it cannot give its approval to a proposed amendment to the association s bylaws which would prohibit a member from advertising that its service is faster and better in other towns than that of members who actual1y are in business in these towns.

The Commission said in its advisory opinion that "the adoption of this proposaJ would be highly questionable under the antitrust laws for the reason that advertising is an element or form of competition and any agreement among eompetitors to refrain from legitimate and truthful advertising restricts competition. If * * " (an industry mcmberJ wishing to compete in another city is denied the right to advertise that despite his geographical disadvantage he can furnish faster and better service than his local competitors, assuming the representation to be truthful he is to that extent denied the right to compete effectively and local" .,. ,', (industry membel'sJ are thus insulated from outside competition.

If competition in an industry is to survive, the members must be left free to exploit in a lawful manner such advantages as they actual1y possess. Consequently, the proposed amendment ,

1866 FEDERAL TRADE CO)!MISSIO DECISIONS to the Association s by-laws cannot receive Commission approval." (File No. 6537035, released Aug. 6, 1966.