Hearing Air Industry

16 CFR Part 159 · Trade practice rules · in the Code of Federal Regulations 1949-1949 (1 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1949 CFR · Earliest edition: 1949 CFR

Text (1949 edition, OCR)

Chapter I—Federal

(d) Prohibited discriminatory serv-
ices or facilities. It is an unfair trade
practice for any member of the industry
engaged in commerce to discriminate in
favor of one purchaser against another
purchaser or purchasers of a commodity
bought for resaie, with or without proc-
essing, by contracting to furnish or fur-
nishing, or by contributing to the fur-
nishing of, any services or facilities
connected with the processing, handling,
saie, or offering for sale of such com-
modity so purchased upon terms not ac-
corded to all purchasers on proportion-
ally equal terms.

(e) Inducing or receiving an illegal
discrimination in price. It is an unfair
trade practice for any member of the in-
dustry engaged in commerce, in the
course of such commerce, knowingly to
induce or receive a discrimination in
price which is prohibited by the provi-
sions of this section.

(f) Purchases by schools, colleges, uni-
versities, public libraries, churches, hos-
pitals, and charitable institutions not
operated for profit. The foregoing pro-
visions of this section relate to practices
within the purview of the Robinson-
Patman Antidiscrimination Act, which
act and the application thereunder of
this section are subject to the iimitations
expressed in the amendment to such
Robinson-Patman Antidiscrimination
Act, which amendment was approved
May 26, 1938, and reads as foliows:

Be it enacted by the Senate and House of
Representatives of the United States of Amer-
tea in Congress assembled, That nothing in
the Act Approved June 19, 1936 (Public,
Numbered 692, Seventy-fourth Congress,
second session), known as the Robinson-
Patman Antidiscrimination Act, shall apply
to purchases of their supplies for their own
use by schools, colleges, universities, public
ltbraries, churches, hospitals, and charitable
institutions not operated for profit.

(Sec. 2, 38 Stat. 730, as amended, secs. 2, 3, 4,
49 Stat. 1527, 1528, ch. 283, 52 Stat. 446; 15
U.S. C. 13, 18a, 13b, 18¢, 21a)

§ 158.17 Aiding or abetting use of un-
fair trade practices. Itis an unfair trade
practice for any person, firm, or corpora-
tion to aid, abet, coerce, or induce an-
other, directly or indirectly, to use or
promote the use of any unfair trade
practice specified in this part.

GROUP 11

§ 158.101 Publication of price lists
and terms of sale. The industry approves

Trade Commission § 159.4

the practice of each individual member
of the industry independently pubiishing
and circulating to the purchasing trade
his own price iists fully setting forth his
terms of sale,

Part 159—Hearing Aid Industry

GROUP I

Sec.

159.1 Misrepresentation in general.

159.2 Misrepresentation as to warranties,
guarantees, and the servicing of
hearing aids.

1593  Biind advertising.

159.4 Misrepresentation of earnings of
salesmen or agents,

159.6 Misrepresentation as to character of
business.

159.6 Defamation of competitors or dis-
paragement of their products.

169.7. Imitation or simulation of trade-
marks, trade names, etc.

159.8 Procurement of competitors’ confi-
dential information by unfair
means and wrongful use thereof.

159.9 Unfair threats of infringement suits.

159.10 Inducing breach of contract.

159.11 Enticing away employees of competi-
tors.

159.12 Commercial bribery.

159.13 Selling below cost.

159.14 Discrimination.

159.15 Aiding or abetting use of unfair trade
practices.

GROUP If
159,101 Information as to care,’ use, and
Maintenance of products.

159.102 Training of sales, service, and other

employees,

159.103 Assistance to users in servicing

hearing aids.

159.104 Cost records.

AUTHORITY: §§ 159.1 to 159.104 issued under
sec. 6 (g), 38 Stat. 722; 15 U. S. C. 46 (g).
Interpret or apply sec. 5, 38 Stat. 719, as
amended; 15 U. S. ©. 45. Other statutory
provisions interpreted or applied are cited to
text in parentheses.

Source: §§ 159.1 to 159.104 contained in
trade practice rules, Hearing Aid Industry,
FTC, Dec. 30, 1944.

GROUP I

§ 159.1 Misrepresentation in general.
It is an unfair trade practice for any
member of the industry to use, or cause
or promote the use of, any trade promo-
tional literature, advertising matter, tes-
timoniai, guarantee, warranty, mark,
brand, labei, designation or representa-
tion, however disseminated or pubiished,
which has the capacity arfd tendency or
effect of misleading or deceiving pur-
chasers or prospective purchasers, or

Page 437


§ 159.2

such member’s own sales agents, dealers,
or distributors:

(a) With respect to the grade, quality,
quantity, origin, price, terms of sale, use,
construction, design, durability, per-
formance, efficacy, restorative or other
properties, or physiological benefits of
any industry product; or

(b) With respect to any service
offered, promised, or to be supplied to
purchasers of such products; or

(c) With respect to the purported en-
dorsement, acceptance, approval, or use
thereof by any person, organization,
agency, group, or association; or

(d) With respect to the manufacture,
distribution, marketing, or servicing of
any industry product, or in any other
respect.

Note: Among the inhibitions of this sec-
tion, but not in limitation thereof, is “false
advertisement,” as defined in section 15 of
the Federal Trade Commission Act, of any
“device” or other product within the scope of
such section.

§ 159.2 Misrepresentation as to war-
ranties, guarantees, and the servicing of
hearing aids. It is an unfair trade prac-
tice for any member of the industry:

(a) To fail or refuse to promptly ful-
fill in good faith any warranties, guar-
antees, promises, or representations, ex-
press or implied, given or made to pur-
chasers of industry products; or

(b) To fail or refuse to promptly
render services or correct defects as war-
ranted, guaranteed, promised, or repre-
sented; or

(c) To use any means whatsoever to
induce purchasers to believe such war-
ranties, guarantees, promises, or repre-
sentations are more binding on the seller
or afford more protection to the pur-
chaser than is in fact true.

§159.3 Blind advertising. It is an
unfair trade practice to use “blind” ad-
vertisements in such manner as to have
the capacity and tendency or effect of
misleading or deceiving purchasers or
prospective purchasers, directiy or in-
directly, as to the character, make, type,
or efficacy of any industry product be-
ing offered for sale, or as to any services
offered or promises in connection there-
with, or as to the identity of the seller, or
in any other respect. (Also, see note to
§ 159.6.) °

§ 159.4 Misrepresentation of earnings
of salesmen or agents. It is an unfair

Page 438

Title 16—Commercial Practices

trade practice for any member of the in-
dustry to make or publish, or cause to
be made or published, any advertise-
ment, offer, statement, or other form of
representation which directly or by im-
plication is false, misleading or decep-
tive:

(a) Concerning the salary, commis-
sion, income, earnings or other remu-
neration which agents, canvassers, solici-
tors, or sales representatives receive or
may receive; or

(b) Concerning any conditions or con-
tingencies affecting such remuneration
or the opportunities therefor.

§ 159.5 Misrepresentation as to char-
acter of business. It is an unfair trade
practice for any member of the industry
to represent, directly or indirectly,
through the use of any word or term in
his corporate or trade name, in his ad-
vertising or otherwise, that he is a manu-
facturer of hearing aids, or of batteries
or other parts or accessories therefor, or
that he is the owner or operator of a fac~
tory or producing company manufactur-
ing them, or that he owns or maintains
an acoustical research laboratory de-
voted to hearing aid research or develop-
ment, when such is not the fact, or in
any other manner to misrepresent the
character, extent, or type of his business.

§ 159.6 Defamation of competitors or
disparagement of their products. The
defamation of competitors by falsely im-
puting them dishonorable conduct, in-
ability to perform contracts, question-
able credit standing, or by other false
representations, or the false disparage-
ment of the grade, quality, origin, price,
terms of sale, use, construction, design,
durability, performance, efficacy, physio-
logical benefits, restorative or other
properties, manufacture, distribution,
marketing, or servicing of the products
of competitors, or of their business
methods, values, credit terms, or policies,
or in any other respect, is an unfair trade
practice.

Nore: The use of “blind” advertisements
as a means of accomplishing such defama-
tion or false disparagement is deemed to be
within the inhibitions of this section,’as well
as the use of any other means of practicing
such prohibited defamation or disparage-
ment.

§ 159.7 Imitation or simulation of
trade-marks, trade names, etc. The imi-
tation or simulation of the trade-marks,
trade names, brands, or labels of com-


Chapter |l—Federal Trade Commission

petitors, or of the exclusively owned
designs of competitors which have not
been directly or by operation of law
dedicated to the public, with the ten-
dency and capacity or effect of mislead-
ing or deceiving purchasers or prospec-
tive purchasers, is an unfair trade
practice.

§ 159.8 Procurement of competitors’
confidential information by unfair means
and wrongful use thereof. Itis an unfair
trade practice for any member of the
industry to obtain information concern-
ing the business of a competitor, by
bribery of an employee or agent of such
competitor, by false or misleading state-
ments or representations, by the imper-
sonation of one in authority, or by any
other unfair means, and to use the in-
formation so obtained in such a manner
as to injure said competitor in his busi-
ness or to suppress competition or un-
reasonably restrain trade.

§ 159.9 Unfair threats of infringe-
ment suits. The circulation of threats
of suit for infringement of patents or
trade-marks among customers or pro-
spective customers of competitors, not
made in good faith but for the purpose
or with the effect of harassing or intimi-
dating such customers or prospective
customers or of unduly hampering, in-
juring or prejudicing competitors in their
business, is an unfair trade practice.

§ 159.10 Inducing breach of contract.
Inducing or attempting to induce the
breach of existing lawful contracts be-
tween competitors and their dealers, cus-
tomers or suppliers by any false or de-
ceptive means whatsoever, or interfer-
ing with or obstructing the performance
of any such contractual duties or services
by any such means, with the purpose and
effect of unduly hampering, injuring, or
prejudicing competitors in their business,
is an unfair trade practice.

§ 159.11 Enticing away employees of
competitors, Willfully enticing away the
employees of competitors, or the em-
ployees of distributors, dealers, or repre-
sentatives of such competitors, with the
purpose and effect of thereby unduly
hampering or injuring competitors in
their business and destroying or sub-
stantially lessening competition, is an
unfair trade practice.

Norte: Nothing in this section shall be con-
strued as prohibiting employees or agents
from seeking more favorable empioyment,
or as preventing manufacturers or sellers

§ 159.14

from soliciting business from any dealers or
other prospective purchasers or marketers
in good faith and by means of fair compet-
itive methods.

§ 159.12 Commercial bribery—(a) In
selling or marketing. It is an unfair
trade practice for a member of the in-
dustry, directly or indirectly, to give, or
offer to give, or permit or cause to be
given, money or anything of value to
agents, employees, or representatives of
customers or prospective customers, or
to agents, employees, or representatives
of competitors’ customers or prospec-
tive customers, without the knowledge of
their employers or principals, as an in-
ducement to influence their employers or
principals to purchase or contract to pur-
chase products manufactured or sold by
such industry member or the maker of
such gift or offer, or to influence such
employers or principals to refrain from
dealing in the products of competitors
or contracting to deal with competitors.

(b) In purchasing supplies. It is an
unfair trade practice for any member
of the industry, directly or indirectly, to
bribe an employee or agent of a supplier
to induce such supplier to discriminate
in favor of such member of the indus-
try over other purchasers from such sup-
plier, with the effect of thereby unduly
hampering a competitor of such member

‘in his business and destroying or sub-

stantially lessening competition. (See
also § 159.14 (e), relative to procurement
of illegal discrimination in price.)

§ 159.13 Selling below cost. The
practice of selling industry products be-
Iow the seller’s cost with the intent and
with the effect of injuring a competitor
and where the effect may be substantially
to 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. The costs, however, which are
referred to in this section, are actual costs
of the respective seller and not some
other figure or average costs in the in-
dustry determined by an industry cost
survey or otherwise.

§ 159.14 Discrimination—(a) Prohib-
tted discriminatory prices, or rebates, re-
funds, discounts, credits, commissions,
ete., which effect unlawful price discrim-
ination. It is an unfair trade practice
for any member of the industry engaged
in commerce, in the course of such com-

Page 439


§ 159.14

merce, to grant or allow, secretly or
openly, directly or indirectly, any rebate,
refund, discount, credit, commission, or
other form of price differential, where
such rebate, refund, discount, credit,
commission, or other form of price dif-
ferential effects a discrimination in price
between different purchasers of goods of
like grade and quality, where either or
any of the purchases involved therein
are in commerce, and where the effect
thereof may be substantially to lessen
competition or tend to create a monopoly
in any line of ‘commerce, or to injure,
destroy, or prevent competition with any
person who either grants or knowingly
receives the benefit of such discrimina-
tion, or with customers of either of them:
Provided, however, (1) That the goods
involved in any such transaction are sold
for use, consumption, or .resaie within
any place under the jurisdiction of the
United States;

(2) That nothing contained in this
section shall prevent differentials which
might make oniy due allowance for dif-
ferences in the cost of manufacture, sale,
or delivery resulting from the differing
methods or quantities in which such
commodities are to such purchasers sold
or delivered;

(3) That nothing contained in this
section shall prevent persons engaged in
selling goods, wares, or merchandise in
commerce, from selecting their own cus-
tomers in bona fide transactions and not
in restraint of trade;

(4) That nothing contained in this
section shall prevent price changes from
time to time where made in response
to changing conditions affecting either
(i) the market for the goods concerned,
or (ii) the marketability of the goods,
such as, but not limited to, actual or im-
minent deterioration of perishable goods,
obsolescence of seasonai goods, diStress
saies under court process, or sales in good
faith in discontinuance of business in
the goods concerned,

(b) Prohibited brokerage and com-
missions, It is an unfair trade practice
for any member of the industry engaged
in commerce,’ in the course of such com-
merce, to pay or grant, or to receive or
accept, anything of value as a commis-
sion, brokerage, or other compensation,
or any allowance or discount in lieu
thereof, except for services rendered in
connection with the sale or purchase of
goods, wares, or merchandise, either to
the other party to such transaction or

Page 440

Title 16—Commercial Practices

to an agent, representative, or other in-
termediary therein where such interme-
diary is acting in fact for or in behalf,
or is subject to the direct or indirect
control, of any party to such transaction
other than the person by whom such
compensation is so granted or paid.

(c) Prohibited advertising or promo-
tional allowances, etc. It is an unfair
trade practice for any member of the
industry engaged in commerce, to pay
or contract for the payment of adver-
tising or promotional allowances or any
other thing of value to or for the bene-
fit of a customer of such member in the
course of such commerce as compensa-
tion or in consideration for any services
or facilities furnished by or through such
customer in connection with the process-
ing, handling, sale, or offering for sale of
any products or commodities manufac-
tured, sold, or offered for sale by such
member, unless such payment or con-
Sideration is available on proportionally
equal terms to all other customers com-
peting in the distribution of such prod-
ucts or commodities.

(d) Prohibited discriminatory  serv-
ices or facilities. It is an unfair trade
practice for any member of the industry
to discriminate in favor of one pur-
chaser against another purchaser or
purchasers of a commodity bought for
resale, with or without processing, by
contracting to furnish or furnishing, or
by contributing to the furnishing of, any
services or facilities connected with the
processing, handling, sale, or offering
for sale of such commodity so purchased
upon terms not accorded to ail pur-
chasers on proportionately equal terms.

(e) Inducing or recciving an illegal
discrimination in price. It is an unfair
trade practice for any member of the in-
dustry engaged in commerce, in the
course of such commerce, knowingly to
induce or receive a discrimination in
price which is prohibited by the fore-
going provisions of this section.

(f) Purchases by schools, colleges, uni-
versities, public libraries, churches, hos-
pitals, and charitable institutions not
operated for profit, The foregoing pro-
visions of this section relate to prac-
tices within the purview of the Robinson-
Patman Antidiscrimination Act, which
act and the application thereunder of
this section are subject to the limita-
tions expressed in the amendment to
such Robinson-Patman Antidiscrimina-


Chapter I[—Federal Trade Commission

tion Act, which amendment was approved
May 26, 1938, and reads as follows:

Be it enacted by the Senate and House of
Representatives of the United States of
America in Congress assembled, That noth-
ing in the Act approved June 19, 1936 (Pub-
lic, Numbered 692, Seventy-fourth Congress,
second session), known as the Robinson-
Patman Antidiscrimination Act, shall apply
to purchases of their supplies for thelr own
use by schools, colleges, universities, public
libraries, churches, hospitals, and charitable
Institutions not operated for profit.

(Sec. 2, 38 Stat. 730, as amended, secs. 2, 3, 4,
49 Stat. 1527, 1528, ch. 283, 52 Stat. 446; 15
U. S. C. 18, 18a, 13b, 138c, 21a)

§ 159.15 Aiding or abetting use of un-
fair trade practices. It is an unfair
trade practice for any person, firm, or
corporation to aid, abet, coerce, or in-
duce another, directly or indirectly, to
use or promote the use of any unfair
trade practice specified in this part, or
of any other unfair method of competi-
tion or unfair or deceptive act or prac-
tice.

: GROUP II

§ 159.101 Information as to the care,
use, and maintenance of products. (1)
The practice, by manufacturers, distrib-
utors or dealers, of furnishing and dis-
seminating, through advertisements,
bulletins or other publicity, accurate and
nondeceptive information as to the
proper care and use of their hearing aids
or parts and accessories therefor, is ap-
proved and recommended as a desirable
practice to follow in the interest of en-
abling customers to obtain and enjoy full
benefits of the desirable qualities and
service of such instruments.

(2) To assist purchasers or users in
selecting and purchasing batteries which
are parts or accessories for hearing aids,
and to prevent misunderstanding, con-
fusion and deception, it is also important
that each of such batteries be marked
by the manufacturer thereof in con-
formity with the provisions of section 7
of the Circular of the National Bureau
of Standards C435, issued February 18,
1942, so as to reveal the source of such
battery, its size or number; also, date of
manufacture, or expiration of a guar-
antee period. indicated as such.

§ 159.102 Training of sales, service,
and other employees. The practice by
manufacturers, distributors, and dealers
of adequately training employees in the
fitting and servicing of hearing aids is
approved and recommended as a desir-

§ 159.104

able practice to follow in the interest
of enabling customers to obtain and en-
joy the fullest possible benefit from the
use of such instruments.

§ 159.103 Assistance to users in servic-
ing hearing aids. Manufacturers and
dealers are encouraged to provide all
possible facilities and service to the users
of their hearing aids to insure maximum
assistance and satisfaction to such users
of the respective instruments. The sale
of hearing aids without reasonably ade-
quate provision for properly servicing
the instruments to the extent necessary
for satisfactory use is not encouraged.

§ 159.104 Cost records. Itis the judg-
ment of the industry that each member
should independently keep proper and
accurate records for determining his
costs.

Part 160—Water Heater Industry

GROUP I

Sec.

160.1 Misrepresentation In general.

160.2 Misrepresentation as to character of
husiness.

160.3 Deceptive use of trade or corporate
names, or trade-marks, etc.

160.4 Other false or deceptive selling meth-
ods.

160.5 Guarantees, warranties, etc.

160.6 Misuse of terms “close-outs,” “dls-
continued lines,” “special bar-
gains,’ etc.

160.7 Misrepresentation as to instaliment
sales contracts, their terms, con-
ditions, etc.

160.8 Misrepresenting products as con-
forming to standard.

160.9 Deception as to rebutlt or second-
hand products.

160.10 Imitation of trade-marks, trade
names, etc.

160.11 Fictitious prices,

160.12 Combination or coercion to fix prices,
suppress competition or restraln
trade,

160.13 Defamation of competitors or dis-
Pparagement of their products.

160.14 Substitution of products.

160.15 Faise invoicing.

160.16 Inducing breach of contract.

160.17 Use of lottery schemes.

160.18 Commercial bribery.

160.19 Enticing away employees of compet-
itors.

160.20 Procurement of competitors’ confi-
dential information by unfair
Means and wrongful use thereof.

160.21 Unfair threats of infringement suits.

160.22 Coercing purchase of one product as
& prerequisite to the purchase of
other products.

160.23 Unlawful interference.

Page 441