Piston Ring Industry

16 CFR Part 166 · Trade practice rules · in the Code of Federal Regulations 1946-1976 (12 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1976 CFR · Earliest edition: 1946 CFR

Text (1976 edition, OCR)

§ 165.101

Group I

*§ 165.101 Disapproval of solicitation
when benefits unlikely.

The industry condemns the practice of
‘soliciting or promoting the sale of
any of its products to persons who
by reason of their physical state, age
or infirmity, cannot be expected to
obtain reasonable use and benefit from
such products. This rule shall not
be regarded as preventing the pur-
chase of an industry product by any per-
son who requests such a device, notwith-
standing such person may not thereby
obtain a reasonable degree of use and
benefit therefrom.

§ 165.102 Cooperation with doctors.

The industry fully realizes that the in-
terest of amputees is best promoted by
the cooperation of the doctor and indus-
try member with respect to the site of
amputation and the type and fitting of
industry products, and as to the ap-
propriate time for consideration by the
patient of the purchase of a prosthetic
device. The industry pledges its mem-
bers to give every assistance and advice
to doctors prior to and after the ampu-
tation that the amputee may have the
optimum of benefit from the industry
product which he may later purchase
and use, whether or not such industry
smember sells, or has opportunity to so-
4icit the purchase of, his products; and
‘to do everything possible to promote mu-
-tual trust and confidence between the
4ndustry and members of the medical
‘profession.

$ 165.103 Importance of personal fit-
ting.

The industry disapproves of the prac-
tice of undertaking to supply an arti-
ficial limb that will fit an amputee by
mail-order specifications and without
personal fitting thereof, as it believes
that satisfactory and proper fit cannot
be attained except by personal fitting.
This rule shall not be construed as pro-
hibiting sale of artificial limbs by mail
order without personal fitting when no
misrepresentation is made, directly or by
implication, as to fit.

$ 165.104 Minimizing importance of
“fir? by exploitation of less im-
portant features.

It is the concensus of the industry

that proper fit and alinement are of
vital importance with respect to the

68

Title 16——Commercial Practices

satisfactory use of its products by ampue
tees and should not be minimized by the
undue exploitation of other aspects or
features of less importance.

§ 165.105 Sharing of improved tech.
niques.

Believing that the interest of ampu-~
tees is its first concern, the industry
favors the making available to all of its
members and the general pubiic any im-
proved technique that may be used or
developed by any of its members tn re-
spect to the making, fitting, alining, or
servicing of industry products. Further,
the industry desires to be an active and
cooperative factor in all progressive de-
veiopments of improved techniques that
will contribute to the welfare and com-
fort of all amputees.

PART 166—PISTON RING INDUSTRY

Group I
Sec.
166.1 Misbranding.
168.3 False advertising.
1663 Deceptive concealment of price
charged for so-called premiums.
166.4 False and misleading price quota-
tions.
166.6 False invoicing.
166.6 Imitation of trade-marks, trade-
names, etc.
166.7 Misuse of word “free,” etc.
166.8 Guarantees.
166.9 Coercing purchase of one product as
: @ prerequisite to the purchase of
other products.
166.10 Exclusive deals.
168.11 Commercial bribery.
166.12 “Spiffs,” “push money,” “premiums,”
eto.
168.13 Consignment shipping.
166.14 Defamation of competitors or dis-
paragement of their products.
166.15 Selling below cost.
166.16 Discrimination.
Group IL
166.101 Publication of price lists and terms
of sale.
166.102 Maintenance of accurate records.
166.103 Shipping goods not requested.
166.104 Unwarranted return of merchandise.
166.106 Arbitration.

AutHortry: The provisions of this Part
166 issued under secs. 6(g), 5, 38 Stat. 722,
719; 15 U.S.C. 46(g), 45, unless otherwise
noted.

Source: The provisions of this Part 166 ap-
pear at 11 F.R. 7658, July 12, 1946, unless
otherwise noted.


Chapter I—Federal

Group I
§ 166.1 Misbranding.

It is an unfair trade practice for any
member of the industry to use, or cause
or promote the use of, any label, brand,
or mark, which has the capacity and
tendency or effect of misleading or de~
ceiving purchasers or prospective pur-
chasers with respect to the type, brand,
grade, quality, composition, tests, dura-
bility, serviceability, performance, quan-
tity, origin, size, substance, character,
nature, material, content, price, value,
preparation, manufacture, distribution,
or marketing of any product, or in any
other respect.

$166.2 False advertising.

It is an unfair trade practice for any
member of the industry to use, or cause
or promote the use of, any trade pro-
motional literature, advertising matter,
testimonial, guarantee, warranty, desig-
nation, or representation, however dis-
seminated or published, which has the
capacity and tendency or effect of mis-
leading or deceiving purchasers or pro~
spective purchasers with respect to the
type, brand, grade, quality, composition,
tests, durability, serviceability, perform-
ance, quantity, origin, size, substance,
character, nature, material, content,
price, value, preparation, manufacture,
distribution, or marketing of any prod-
uct, or in any other respect.

$166.3 Deceptive concealment of price
charged for so-called premiums.

In the offering of so-called premiums
in combination or in connection with the
sale or offering for sale of piston rings, it
is an unfair trade practice:

(a) To represent, directly or by im-
plication, that the so-called premium ts
given without additional charge when in
fact a charge therefor is included in the
price of such piston rings; or

(b) To conceal or fail to disclose the
fact that the selling price at which piston
rings are sold or offered for sale includes
a charge for such so-called premium
which Is in addition to the regular and
customary selling price of such piston
Tings, where such concealment or fallure
to disclose has the capacity and tendency
or effect of misleading or deceiving pur-
chasers or prospective purchasers; or

(c) To conceal or fail to disclose what

‘part or proportion of such selling price
is attributable to the so-called premium,
where such concealment or failure to dis-

Trade Commission § 166.8
close such part or proportion has the
capacity and tendency or effect of mis-
leading or deceiving purchasers or pro-
spective purchasers.

§ 166.4 False and misleading price quo-
tations.

The publishing or circulating by any
member of the industry of false or mis-
leading price quotations, price lists, or
terms or conditions of sale, with the
capacity and tendency or effect of mis-
leading or deceiving purchasers or pro~
spective purchasers, is an unfair trade
practice.

§ 166.5 False invoicing.

Withholding from or inserting in an
invoice any statements or information
by reason of which omission or insertion
a false record Is made, wholly or in part,
of the transaction represented on the
face of such invoice, with the effect of
thereby misleading or deceiving pur-
ehaser or prospective purchasers, is an
unfair trade practice.

§ 166.6 Imitation of trade-marks, trade
names, ete.

The imitation or simulation of the
trade-marks, trade names, or other
marks of identification of competitors,
with the capacity and tendency or effect
of misleading or deceiving purchasers
or prospective purchasers, is an unfair
trade practice.

§ 166.7 Misuse of word “free,” ete.

The use of the word “free,” or any
other term or representation of similar
import or meaning, to describe, designate,
or refer to any piston ring or so-called
premium offered in connection therewith
which is not given to the recipient
thereof without cost and uncondition~
ally, is an unfair trade practice.

Cross REFERENCE: For other provisions ree
lating to the use of premiums, see §$ 16638,
166.11, 166.12 and 166.16.

§ 166.8 Guarantees.

It is an unfair trade practice to use,
or cause to be used, any guarantee which
is false, misleading, deceptive, or unfair
in any respect.

Guarantees of the type prohibited by
this section include the following: :

(a) Guarantees issued or directly or
indirectly caused to be used by any mem~
ber of the industry under which the
guarantor fails or refuses to scrupulously
observe his obligation or fails or refuses

69


§ 166.9

to make good on claims coming rea-
sonably within the terms of the guar-
antee; or

(b) Guarantees which are so used or
are of such form, text, or character as
to import, imply, or represent that the
guarantee is broader than is in fact true,
or will afford more protection to pur-
chasers or users than is in fact true; or

(c) Guarantees in which any condl-
tion, qualification, or contingency ap-
plied by the guarantor thereto is not fully
and nondeceptively stated therein, or is
stated in such manner or form as to be
deceptively minimized, obscured, or con-
cealed, wholly or in part; or

(d) Guarantees containing statements,
representations, or assertions which have
the capacity and tendency or effect of
misleading and deceiving purchasers or
prospective purchasers with respect to
the serviceability, durability, or lasting
qualities of any piston rings, or which
guarantees, either in themselves or in the
manner of their use, are otherwise false,
misleading, or deceptive; or

(e) Guarantees which are not fur-
nished all purchasers on proportionally
equal terms contrary to the provisions of
§ 166.16, or are otherwise discriminatory
within the inhibitions of § 166.16.

§ 166.9 Coercing purchase of one prod-
duct as a prerequisite to the purchase
of other prodncts.

The practice of coercing the purchase
of one or more products as a prerequisite
to the purchase of one or imore other
products, where the effect may be to
substantially lessen competition or tend
to create a monopoly or to unreasonably
restrain trade, is an unfair trade
practice.

§ 166.10 Exclusive deals.

It is an unfair trade practice for any
member of the industry to purchase or
otherwise acquire from a distributor or
dealer the stock of a competitor or com-
petitors of such industry member, to
make loans to a distributor or dealer, or
to guarantee a distributor or dealer in-
creased profits as compared with profits
previously obtained in the handling of
competitive products, when such acts
or practices are done:

(a) Upon any express or implied condi-
tion, agreement, or understanding, that
the distributor or dealer will discontinue
handling competitive products and will
handle such member’s products exclu-
sively; or

Title 16—Commercial Practices

(b) As an inducement to the distribu-
tor or dealer to discontinue handling
competitive products and to handle such
member’s products exclusively,
and where the effect of such acts or
practices may be to substantially lessen
competition, or tend to create a monop-
oly, or to unreasonably restrain trade.

§ 166.11 Commercial bribery.

It is an unfair trade practice for a
member of the industry, directly or indi-
rectly, to give, or offer to give, or permit
or cause to be given, money or anything
of value, whether in the guise of premi-
ums or otherwise, to agents, employees,
or representatives of customers or pro-
spective customers, or to agents, employ-
ees, or representatives of competitors’
customers or prospective customers,
without the knowledge of their employers
or principals, as an inducement to influ-
ence their employer or principals to pur-
chase or contract to purchase piston
rings manufactured or sold by such in-
dustry member or the maker of such gift
or offer, or to influence such employers
or principals to refrain from dealing in
the piston rings of competitors or from
dealing or contracting to deal with com-
Petitors..

Cross RererEnce: For other provisions re-
lating to the use of premiums, see §§ 166.3,
166.7, 166.12 and 166.16,

§ 166.12 “Spiffe,” “push money,” “pre-
miums,”’ etc.

It is an unfair trade practice for
any member of the industry, directly, or
indirectly, to give, pay, or contract to
Pay, to any clerk, salesperson, purchas-
ing agent, stockroom man, mechanic, or
other employee, of any customer-dealer
handling two or more competitive brands
of piston rings, “push money,” “spiffs,”
or any other bonus, gratuity, or pay-
ment, whether in the guise of premiums
or otherwise, as an inducement or en-
couragement to push or promote the sale
of such member’s piston rings over com-
peting piston rings of other members
of the industry;

(a) With the capacity and tendency or
effect of thereby causing purchasers or
prospective purchasers, when making
purchases of such piston rings, to be mis-
led or deceived into the erroneous belief
that such clerk, salesperson, purchasing
agent, stockroom man, mechanic, or
other employee, is free from any such
special interest or influence, or is not so
subsidized or paid by such member; or

70


Chapter ]1—Federal Trade Commission

(b) With the capacity and tendency
or effect of thereby hampering and un-
duly restricting the legitimate, free, and
full use and enjoyment of such trade out-
lets for the distribution of competing
piston rings; or

(c) With the purpose or effect, di-
rectly or indirectly, of otherwise substan-
tially lessening competition or unreason-
ably restraining trade in the marketing
of piston rings; or

(d) With the effect of thereby bring-
ing about the granting of an illegally
discriminatory service, payment, or price
contrary to the provisions of § 166.16.

Cross Rerrrence: For other provisions re-
lating to the use of premiums, see §§ 166.3,
166.7, 166.11 and 166.16.

§ 166.13 Consignment shipping.

It is an unfair trade practice for any
member of the industry to use the prac-
tice of shipping piston rings on consign-
ment or pretended consignment for the
purpose and with the effect of artificially
clogging trade outlets and unduly re-
stricting competitors’ use of said trade
outlets in getting their piston rings to
consumers through regular channels of
distribution, or with such purpose to en-
tirely close said trade outlets to such
competitors so as to substantially lessen
competition or tend to create a monopoly
or to unreasonably restrain trade: Pro-
vided, however, That nothing in this sec-
tion shall be construed or used as re-
stricting or preventing consignment
shipping or marketing of piston rings in
good faith and without artificial inter-
ference with competitors’ use of the usual
channels of distribution in such manner
as thereby to suppress competition or re~-
strain trade.

$166.14 Defamation of competitors or
disparagement of their products.

The defamation of competitors by
falsely imputing to them dishonorable
conduct, inability to perform contracts,
questionable credit standing, or other
false representations, or the false dis-
paragement of the type, brand, grade,
quality, composition, tests, durability,
serviceability, performance. quantity,
origin, size, substance, character, nature,
material, content, price, value, prepara-
tion, manufacture, distribution, or mar-
- keting of the piston rings of competitors,
or of their business methods, values,
credit terms, or policies, or in any other
respect, is an unfair trade practice.

71

§ 166.16

8 166.15 Selling below cost.

The practice of selling piston rings
below the seller’s cost with the intent and
with the effect of injuring a competitor
and where the effect may be substan-
tially to lessen competition or tend to
create 2 monopoly or unreasonably re-
strain trade is an unfair trade practice.
All elements recognized by good account-
ing 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 industry determined by an industry
cost survey or otherwise.

8 166.16 Discrimination.

(a) Prohibited discriminatory prices,
or rebates, refunds, so-called free goods,
premiums, discounts, credits, etc., which
effect unlawful price discrimination. It
is an unfair trade practice for any mem-
ber of the industry engaged in commerce,
in the course of such commerce, to grant
or allow, secretly or openly, directly or
indirectly, any rebate, refund, so-called
free goods, premium, discount, credit, or
other form of price differential, where
such rebate, refund, so-calied free goods,
premium, discount, credit, or other form
of price differential, effect a discrimina-
tion 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
discrimination, or with customers of
either of them: Provided, however, (1)
That the goods involved in any such
transaction are sold for use, consump-
tion, or resale within any place under the
jurisdiction of the United States;

(2) That nothing contained in this
section shall prevent differentials which
make only due allowance for differences
in the cost of manufacture, sale, or deliv-
ery 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
customers in bona fide transactions and
not in restraint of trade;


§ 166.101

(4) That nothing contained in this
section shall prevent price changes from
time to time where made in response to
changing conditions affecting either ()
the market for the goods concerned, or
Gi) the marketability of the goods, such
as, but not limited to, actual or imminent
deterioration of perishable goods, ob-
solescence of seasonal goods, distress
sales under court process, or sales in good
faith in discontinuance of business in the
goods concerned.

(b) Prohibited brokerage and commis-
sions. 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 to
an agent, representative, or other inter-
mediary therein where such intermedi-
ary is acting in fact for or in behalf, or
is subject to the direct or indirect con-
trol, 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 advertis-
ing or promotional allowances or any
other thing of value to or for the benefit
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
custoiner in connection with the process-
ing, handiing, sale, or offering for sale of
any products or commodities manufac-
tured, sold, or offered for sale by such
member, unless such payment or consid-
eration is available on proportionally
equal terms to all other customers com-
peting in the distribution of such prod-
ucts or commodities.

(d) Prohibited discriminatory services
or facilities. It is an unfair trade prac-
tice for any member of the industry to
discriminate in favor of one purchaser
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 fa-
cilities connected with the processing,
handling, sale, or offering for sale of such

72

Title 16—Commercial Practices

commodity so purchased upon terms not
accorded to all purchasers on propor-
tionally equal terms.

(e) Inducing or receiving an illegat
discrimination in price. It 18 an unfair
trade practice for any member of the
industry engaged in commerce, in the
course of such commerce, knowingly to
induce or receive a discrimination in
price which is prohibited by the foregoing
provisions of this section.

(f) Purchases by schools, colleges, uni-
versities, public librartes, 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 limitations ex-
pressed in the amendment to such Robin-
son-Patman Antidiscrimination Act,
which ainendment 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 nothing
in the Act approved June 19, 1936 (Public,
Numbered 692, Seventy-Fourth Congress,
second session), known as the Robinson-Pat-
man Antidiscrimination Act, shall apply to
purchases of their supplies for their own use
by schools, colleges, universities, public
libraries, churches, hospitals, and charttable
institutions not operated for profit.

(Sec. 2, 38 Stat. 780, as amended, secs. 2, 3, 4,
49 Stat. 1527, 1528, ch. 288, 52 Stat. 446:
15 U. S. C. 18, 18a, 13b, 18c, 21a)

Cross REFERENCE: Por other provisions re-
lating to the use of premiums, see §§ 166.3,
166.7, 166.11, and 166.12.

Grovp IT

§ 166.101 Publication of price lists and
terms of sale.

The industry approves the practice of
each individual member of the industry
independently publishing and circulating
to the purchasing trade his own price
lists fully setting forth his terms of sale.

§ 166.102 Maintenance of accurate rec-
ords.

It is the judgment of the industry that
each member should independently keep
proper and accurate records for deter-
mining his costs.

§ 166.103 Shipping goods not requested.

The practice of shipping piston rings
on approval or.on consignment or pre-
tended consignment, which piston rings


Chapter l—Federal

have not been previously contracted for,
requested or ordered, is condemned by
the industry.

§ 166.104 Unwarranted return of mer
chandise.

The practice by members of the indus-
try of permitting customers to return
purchased or consigned piston rings
without just cause for refund or credit,
without the payment of a reasonable
charge to cover actual expenses of neces- _
sary reinspection and repacking, creates
waste and loss and increases the cost of
doing business, to the detriment of
both the industry and the public, and
is condemned by the industry: Provided,
however, That the above shall not apply
to the return of piston rings at the re-
quest of the seller or consignor, and sub-
ject to the general limitation that mem-
bers of the industry shall not engage in
any combination or consplracy to fix
prices or charges or otherwise to restrain
trade or use any other illegal methods
in the regulation, control, or prevention
of the return of piston rings.

$8 166.105 Arbitration.

The industry approves the practice of
handling business disputes between
members of the industry and their cus-
tomers in a fair and reasonable manner,
coupled with a spirit of moderation and
good will, and every effort should be
made by the disputants themselves to
eompose their differences, If unable to
do so they should, if possible, submit
these disputes to arbitration.

PART 167—-CONSTRUCTION EQUIP-
MENT DISTRIBUTING INDUSTRY

Group I

Bec.

167.0 Definitions.

167.1 Combination or coercion to fix prices,
suppress competition, or restrain
trade.

1672 Misrepresentation of construction
machinery or equipment.

1673 False invotcing,

1674 Misrepresentation as to character of
business.

167.5 Deception as to rebuilt or second-
hand construction machinery,

167.6 Inducing breach of contract.

167.7 Defamation of competitors or dis-
paragement of their construction
machinery.

167.8 Commercial bribery.

Trade Commission § 167.0
Bec.
167.9 Enticing away employees of competi.

tors,

167.10 Prohtbited discriminations,

167.11 Selling below cost.

167.12 Persuading distributors to refrain
from submitting independent bids
and price quotations to buyers.

167.18 Coerctng adherence to published
rental rates or trade-in values.

Group II

167.101 Standardization of basis for capac.

ity rating.

AvrHorirr: The provisions of this Part
167 issued under secs. 6(g), 6, 38 Stat. 722,

719; 15 U.S.C. 46(g), 45, unless otherwise
noted.

Source: The provisions of this Part 167
appear at 11 FR. 7889, July 20, 1946, unless
otherwise noted.

Group I
§ 167.0 Definitions.

(a) The term “distributor” as used
in this part includes any firm, cor-
poration, partnership, or individual
engaged in: .

(1) Selling, distributing, or renting
construction machinery to the ultimate
user, or

(2) Operating as a commission broker,
manufacturer’s representative or selling
agent in connection with the sale, dis~
tribution, or rental of construction ma-
chinery to the ultimate user, or

(3) Servicing, repairing or recondi-~
tioning construction machinery in con-
nection with the sale, distribution, or
rental thereof to the ultimate user,

(b) The term “construction machin-
ery” as used in this part includes any
and all new or used machinery, equip-
ment, and parts or accessories therefor,
which are designed for use in connection
with “construction work” as defined be~
low, or which are designed for use both in
connection with “construction work” and
other work, such as logging and mining.

(c) The term “construction work” as
used in this part shall comprehend any
and all types of construction, including,
by way of example, but not limited to, the
building, maintenance, repair, or demo-
lition of structures, buildings, industrial
works, pipe-lines, transmission lines, res-
ervoirs, dams, harbor installations, roads,
streets, sewers, airfields, canals, grades,
and excavations.

73

58-064—-76——-6