Consumer Law Library

Wholesale Tobacco Trade

16 CFR Part 105 · Trade practice rules · in the Code of Federal Regulations 1938-1960 (5 annual editions)

Scanned CFR pages, OCR text may contain errors; the linked Library of Congress PDF is the authority. Not legal advice; not affiliated with the FTC. These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.

Latest edition: Library of Congress, 1960 CFR · Earliest edition: 1938 CFR

Text (1960 edition, OCR)

§ 1039

paragraph (d) of this section reads as fol-
lows

Upon proof being made at any hearing on
a complaint under this section that there
has been discrimination in price or services
or facilities furnished the burden of re-
putting the prima facie case thus made by
showing justification shall be upon the per-
son charged with a violation of this section
and unless justification shall be affirmatively
shown the Commission is authorized to issue
an order terminating the discrimination
Provided however That nothing herein con-
tained shall prevent a seller rebutting the
prima facie case thus made by showing that
bis lower price or the furnishing of services
or facilities to any purchaser or purchasers
was made in good faith to meet an equally
low price of a competitor or the services or
facilities furnished by a competitor

§ 1039 Aiding or abetting use of uufair
trade practices

It 1s an unfair trade practice for any
person firm or corporation to aid abet
coerce or induce another, directly or in-
directly to use or promote the use of any
unfair trade practice specified in this
part

PART 105—WHOLESALE TOBACCO

TRADE
Group I
Sec
1051 Loss leaders
105 2 Sales below cost
105 4 Misrepresenting character of busi-
ness
195 5 Misrepresentation in general
105 6 Imitation of trade-marks trade
names etc
105 7 False branding or packing
105 8 Defamation of competitors
10510 Commercial bribery
10511 Inducing breach of contract
10512 Threats of suit
10513 False price quotations etc
10514 Coercing purchases
10515 False invoicing
Group II
105101 Inadequate supplies
105102 Differentiating between wholesale

and retail transactions
105 103 Evasion of lawful taxes

COMMITTEE ON TRADE PRACTICES
105 201 Industry committee

AuTHoRITY §§ 1051 to 105 201 issued un-
der sec 6(g) 38 Stat 722 15 USC 46(g)
Interpret or apply sec 5 38 Stat 719 as
amended 15USC 45

Source §§1051 to 105201 contained in
trade practice rules Wholesale Tobacco
Trade FTC Sept 28 1935 except as other-
wise noted

Page 260

Title 16—Commercial Practices

Group I
§ 105 1 Loss leaders

The practice of using a brand of cigars
cigarettes tobacco products, or allied
lines as a “loss leader’ to induce the
purchase of other merchandise, the sale
of which merchandise 1s used to recoup
the loss sustained on the said brand of
cigars cigarettes tobacco products or
allied lines with the tendency or capac-
ity to deceive or mislead purchasers or
prospective purchasers and which un-
fairly diverts trade froin or otherwise
injures competitors 1s an unfair trade
practice

§ 1052 Sales below eost

The practice of selling below cost with
the intent and with the effect of injuring
a competitor and where the effect may
be to substantially lessen competition or
tend to create a monopoly or unreason-
ably restrain trade 1s an unfair trade
practice cost being determined by in-
cluding all elements recognized by good
accounting practices

§ 1054 Misrepresenting cbaracter of

business

For any person firm or corporation to
hold himself or itself out to the public
as a wholesaler when such 1s not the
case or for any member of the industry
to misrepresent the character of his busi-
ness, with the tendency or capacity to
mislead or deceive purchasers or pro-
spective purchasers 1s an unfair trade
practice

§ 1055 Mhusrepresentation m general

The making of or causing or permit-
ting to be made or published, any false,
untrue or deceptive statement by way of
advertising or otherwise concerning the
grade quality quantity substance char-
acter, nature origin, size or preparation
of any products sold or offered for sale
having the tendency or capacity to mis-
lead or decelve purchasers or prospective
purchasers 1s an unfair trade practice

§ 1056 Imitation of trade marks, trade
names, etc

The imitation of the trade-marks
trade names or other marks of identifi-
cation of competitors having the tend-
ency or capacity to mislead or deceive
purchasers or prospective purchasers 1s
an unfair trade practice


Chopter |—Federal

§ 1057 False branding or packing

The practice of branding or marking
or packing any products, or causing the
same to be branded or marked or packed
im a inanner which is calculated to or
does deceive or mislead purchasers or
prospective purchasers with respect to
the brand, grade quality quantity, or-
gin, size, substance, character, nature
material, content or preparation of such
products 1s an unfair trade practice

§1058 Defamation of compctitors

The defamation of competitors by
falsely 1mputing to them dishonorable
conduct, inability to perform contracts
questionable credit standing or by other
false representations or the false dis-
paragement of the grade or quality of
their goods with the tendency or capac-
ity to mislead or deceive purchasers or
Prospective purchasers 1s an unfair
trade practice

§ 10510 Commercial bribery

Directly or indirectly to give or permit
to be given or offer to give money or
anything of value, to agents employees
or representatives of customers or pro-
spective customers or to agents em-
Ployees or representatives of competi-
tors’ customers, or prospective customers
without the knowledge of their employers
or principals aS an inducement to in-
fluence their employers or principals to
purchase or contract to purchase indus-
try products from the maker of such gift
or offer or to influence such employers or
principals to refrain from dealing or con-
tracting to deal with competitors 1s an
unfair trade practice

§ 10511 Inducing breach of contract

Willfully inducing or attempting to
induce the breach of any lawfully exist-
ing contract or contracts between com-
petitors and their customers by any false
or deceptive means whatsoever, or inter-
fering with or obstructing the perform-
ance of any such contractual duties or
services, with the purpose and effect of
unduly hampering, injuring or embar-
rassing competitors in their busmesses 1s
an unfair trade practice

§ 10512 Threats of suit

The circulation of threats of suit for
infringement of patents or trade-marks
among customers or prospective cus-
tomers of a competitor not made in good
faith but for the purpose of harassing or

Trade Commission § 105 102
intimidating such customers or prospec-
tive customers or otherwise prejudicing
or injuring competitors in their busi-
nesses 1s an unfair trade practice

§ 10513 False price quotations, etc

The publishing or circulating by any
member of the industry of false or mis-
leading price quotations price lists or
terms of sale, having the capacity or
tendency to muslead or deceive pur-
chasers or prospective purchasers, 1s an
unfair trade practice

§ 10514 Coercing purchases

The practice of coercing the purchase
of one or more products as a prerequisite
to the purchase of one or more other
products where the effect may be to sub-
stantially lessen competition or tend to
create a monopoly or to unreasonably
restrain trade, 1s an unfair trade
practice

§105 15 False invoicing

Withholding from or inserting 1n the
invoice facts which make the invoice a
false record, wholly or in part of the
transaction represented on the face
thereof with the purpose or effect of
misleading or deceiving purchasers or
prospective purchasers 1s an unfair
trade practice

Group II

§ 105101 Inadequate supplies

The advertising or offering for sale by
a wholesaler of any well known or trade-
marked tobacco product of the Whole-
sale Tobacco Industry at greatly reduced
prices when the quantity of said goods
1s entirely inadequate to supply the usual
demand of customers of the said whole-
saler with the tendency or capacity to
mislead or deceive purchasers or pro-
spective purchasers 1s condemned by the
industry

§ 105102 Duiffereutiating between whole-
sale and retail transactions

Where merchandise at wholesale and
merchandise at retail are sold in the
same establishment the failure on the
part of any member of the industry to
properly differentiate between or iden-
tify the two types of transactions where
the result may be to create confusion and
deception as to the character of the
transaction in the mmds of purchasers
or prospective purchasers 1s condemned
by the industry

Page 261


§ 105 103

§ 105103 Evasion of lawful taxes

The evasion of the payment of State
taxes On cigars cigarettes or other to-
bacco products through interstate trans-
actions 1s condemned by the industry

COMMITTEE ON TRADE PRACTICES
§ 105 201 Industry committee

The provisions of §161 of this sub-
chapter shall be applicable to an industry
committee established under this part
[21FR 1174 Feb 21 1956]

PART 108-—-PAPER DRINKING STRAW
MANUFACTURING INDUSTRY

Group I
Sec
1081 Sales below cost
108 2 False marking or branding
1083 Imitation of trade-marks etc
1084 Misrepresentation in general
1085 Defamation of competitors
1086 Inducing breach of contract
1087 ~=©False price quotations
10810 Commercial bribery
10811 Threats of suit
10812 Coercing purchases
10813 False invoicing
10814 Sales through bogus independent

AUTHORITY §§ 1081 to 108 14 issued under
sec 6(g) 38 Stat 722 15 USC 46(g) In-
terpret or apply sec 5 38 Stat 719 as amend-
ed 15USC 45

Source §§1081 to 10814 contained in
trade practice rules Paper Drinking Straw
Manufacturing Industry FTC July 3 1936

§1081 Sales below cost

The practice of selling goods below the
Seller’s cost with the mtent and with
the effect of injuring a competitor and
where the effect may be to substantially
lessen competition or tend to create a
monopoly or unreasonably restrain trade
is an unfair trade practice, all elements
recognized by good accounting practice
as proper elements of such cost shall be
included in determining cost under this
section

§1082 False marking or branding

The false markmg or branding of
products of the industry with the tend-
ency capacity or effect of misleading
or deceiving purchasers with respect to
the grade qualhty quantity substance
character nature origin size or prepara-
tion or in any other material respect of
the goods purchased 1s an unfair trade
practice

Page 262

Title 16—Commercial Practices

§ 1083 Imitation of trade marks, ete

The imitation of the trade-marks
trade names brands labels or other
marks of identification of competitors
having the tendency capacity or effect
of misleading or decelving purchasers or
prospective purchasers 1s an unfair trade
practice

§ 1084 Mnusrepresentation in general

The making or causing or permitting
to be made of published of any false, un-
true or deceptive statement or represen-
tation by way of advertisement or other-
wise concerning the grade quality,
quantity substance character, nature
origin size or preparation or In any
other material respect of any product of
the industry sold or offered for sale hav-
ing the tendency capacity or effect of
misleading or decelving purchasers or
prospective purchasers 1s an unfair trade
practice

§ 1085 Defamation of competitors

The defamation of competitors by
falsely 1mputing to them dishonorable
conduct inability to perform contracts,
questionable credit standing or by other
false representations or the false dis-
paragement of the grade or quality of
their goods with the tendency capacity
or effect of misleading or deceiving pur-
chasers Or prospective purchasers or with
the tendency capacity or effect of unduly
hampering mjJuring or prejJudicing such
competitors in the conduct of their busi-
ness 1S an unfair trade practice

§ 1086 Inducmg breach of contract

Willfully inducing or attempting to m-
duce the breach of existing contract or
contracts between competitors and their
customers or their suppliers by any false
or deceptive means whatsoever or will-
fully interfering with or obstructing the
Performance of any such contractual
duties or services by any such means
with the purpose and effect of unduly
hampering injurmg or prejJudicing com-
petitors in their businesses 1s an unfair
trade practice

§ 1087 False price quotations

The publishing or circulating by any
member of the industry of false or mis-
leading price quotations price lists terms
of sale or discounts having the tendency,
capacity, or effect of misleading or de-
celving purchasers or prospective pur-
chasers, 1s an unfair trade practice