Vertical Turbine Pump Industry
16 CFR Part 172 · Trade practice rules · in the Code of Federal Regulations 1947-1976 (13 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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: 1947 CFR
Text (1976 edition, OCR)
Chapter —Federal
§ 171.14 Miscellaneous unfair trade
practices.
It is an unfair trade practice:
(a) To refer, in advertisements or rep-
resentations in respect of a dye or tint,
to weaves or fabrics in such manner as
to confuse and mislead or deceive pur-
chasers or prospective purchasers;
(bo) To use any trade name, corporate
name, trade-mark, or other trade desig-
nation in such a manner as to have the
capacity: and tendency or effect of mis-
leading or deceiving the purchasing or
consuming public as to the character,
name, nature, or origin of any product of
the industry, or any material used
therein, or in any other material respect;
(c) For any concern, in the course of
or in connection with the distribution of
industry products, to represent, directly
or indirectly, that it is a manufacturer
of industry products, or that it owns or
controls a factory or laboratory making
such products, when such is not the fact,
or in any other manner to misrepresent
the character, extent, or type of its busi-
ness;
(d) To defame competitors by: imput-
ing to them falsely any dishonorable con-
duct, inability to perform contracts,
questionable credit standing, or to make
any other false representation or false
disparagement of such competitor or of
any industry product of any such com-
petitor in any respect, or of such com-
petitor’s business methods, selling prices,
values, credit terms, policies, or services;
(e) Unlawfully to induce or attempt to
induce the breach of existing lawful con-
tracts between any industry member and
his customer or supplier by any means
whatsoever or to interfere with or ob-
struct the performance of any such con-
tractual duties or services by any such
means;
(f) Directly or indirectly to give, offer
to give, or permit or cause to be given,
money or anything of value to agents,
employees, or representatives of custom-
ers or prospective customers, or to
agents, employees, or representatives of
any other industry member’s customers
or prospective customers, without the
knowledge of their employers or princi-
pals, as an inducement to influence their
employers or principals to purchase or
contract to purchase products manufac-
tured or sold by any industry member,
or to influence such employers or prin-
cipals to refrain froin dealing in the
products of any other industry member
Trade Commission $172.1
or from dealing or contracting to deaf:
with any other industry member;
(g) To employ or otherwise procure:
any person to disparage deceptively any
other industry member or the industry’
product of any industry member.
§ 171.15 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 induce another, directly or in-
directly, to use or promote the use of any
unfair trade practice specified in this
part.
PART 172—VERTICAL TURBINE
PUMP INDUSTRY
Group I
Bec.
172.1 Misrepresentation.
172.2 False or deceptive selling methoda.
172.3. Guarantees, warranties, etc.
172.4 Misrepresenting products as conform-
ing to standard.
172.5 Deception as to rebuilt or used prod<
ucts.
172.6 Fictitious prices.
172.7 Defamation of competitors or dispar«
agement of their products.
172.8 False invoicing.
172.9 Inducing breach of contract.
172.10 Commercial bribery.
172.11 Enticing away employees of competi«-
tors.
172.12 Selling below cost.
172.18 Discrimination.
172.14 Combination or coercion to fix prices,
suppress competition, or restrain
trade.
172.15 Aiding or abetting use of unfair trade
practices,
Group IL
172.101 Publication of price ists and terms
of sale.
172,102 Maintenance of accurate records.
172.103 Arbitration.
COMMITTEE ON TRADE PRACTICES
172.201 Industry committee.
AvTHorITy: The provisions of this Part
172 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 17%
appear at 12 F.R. 3913, June 17, 1947, unless
otherwise noted.
Group I
§ 172.1 Misrepresentation.
It is an unfair trade practice to use, or
cause or promote the use of, any adver-
tising by radio, newspapers, magazines or
other media, or any trade promotional
93
$172.2
literature, label, brand, mark, designa-
tion, or representation (whether in the
form of a guarantee, warranty, or other-
wise), however disseminated or pub-
Nshed, which has the capacity and
tendency or effect of misleading or de-
ceiving the purchasing or consuming
public: |
(a) With respect to the quality, grade,
size, capacity, properties, durability,
serviceability, life, performance, con-
struction, or constituent materials of any
product of the industry; or
(b) With respect to any service offered,
promised, or to be supplied to purchasers
of such product; or
(c) With respect to the manufacture,
distribution, servicing, or terms or con-
ditions of sale of such product; or in any
other respect.
§ 172.2 False or deceptive selling meth-
To use or promote the use of any
selling method which has the capacity
and tendency or effect of misleading
or deceiving the purchasing or consum~
ing public is an unfair trade practice.
§ 172.3 Guarantees, warranties, etc.
(a) Guarantees which afford purchas-
ers or users substantial and adequate
protection, and are fully and fairly
stated or disclosed and scrupulously
adhered to by the guarantor, are desir-
eble and recommended. It is an unfair
trade practice to use or cause to be used
‘any guarantee which is false, misleading,
deceptive, or unfair to the purchasing or
consuming public. :
(b) Under this section guarantees of
the following type or character shall not
be used:
(1) Guarantees containing state-
ments, representations, or assertions
which have the capacity and tendency or
effect of misleading or deceiving in any
respect; or
(2) 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 that the guarantee covers the entire
pump or certain parts thereof which are
not in fact covered, or will afford more
protection to purchasers or users than is
in fact true; or
(3) Guarantees in which any condi-
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
94
Title 16—Commercial Practices
deceptively minimized, obscured, or con-
cealed, wholly or in part; or
(4) Guarantees which are stated,
phrased, or set forth in such manner that
although the statements contained there-
in are literally and technically true, the
whole is misleading in that purchasers or
users are not made sufficiently aware of
certain contingencies or conditions ap-
pHeable to such guarantee which mate-
rially lessen the value or protection there-
of as a guarantee to purchasers or users;
or
(5) Guarantees which purportedly ex-
tend for such indefinite or unlimited pe-
riod of time or for such long period of
years as to have the capacity and tend-
ency or effect of thereby misleading or
deceiving purchasers or users into the
belief that the product has or is defi-
nitely known to have greater degree of
serviceability or durability in actual use
than is in fact true; or
(6) Guarantees which, have the capac-
{ty and tendency or effect of otherwise
misrepresenting the performance, serv-
iceability, durability, or lasting qualities
of the product, such as, for example, a
guarantee extending for a period of time
when the ability of the product to last,
endure, or remain serviceable for such
period of time has not been established
by actual experience or by competent and
adequate tests definitely showing in ei-
ther case that the product has such last-
ing qualities under the conditions en-
countered or to be encountered in the re-
spective locality where the product is sold
and used under the guarantee; or
(7) Purported guarantees in the form
of documents, promises, representations
or other form which are represented or
held out to be guarantees when such {fs
not the fact, or when they are service
contracts of the type which are not guar~
antees, or when they involve any decep-
tive or misleading use of the word
“Guarantee” or term of slmilar im-
port; or
(8) Guarantees issued, or directly or
indirectly caused to be used, by any
member of the industry when or under
which the guarantor fails or refuses to
scrupulously observe his obligation there-
under or fails or refuses to make good
on claims coming reasonably within the
terms of the guarantee; or
(9) Guarantees which in themselves
or in the manner of their use are other-
wise false, misleading, or deceptive.
(c) This section shall be applicable
not only to guarantees but also to war-
Chapter |—-Federal
ranties, to purported warranties and
guarantees, and to any promise or rep-
resentation in the nature of or purport-
ing to be a guarantee or warranty.
§ 172.4 Misrepresenting products as con-
forming to standard.
Representing, through advertisement
or otherwise, that any product of the
industry conform to a standard recog-
nized in or applicable to the industry
when such is not the fact, with the
capacity and tendency or effect of mis-
leading or deceiving the purchasing or
consuming public, is an unfair trade
practice.
§ 172.5 Deception as to rebuilt or used
products.
(a) It is an unfair trade practice
for any member of the industry to
sell, offer for sale, advertise, or other-
wise represent, any product of the indus-
try as being new or unused when such
is not true in fact.
(b) In the marketing of rebuilt or used
products of the industry, or parts
thereof, or the marketing of products
contajning rebuilt or used parts, it is an
unfair trade practice to fail or refuse
to make full and nondeceptive disclosure
of the fact that such products or parts
are not new but are used or second-hand
or are rebuilt, as the case may be, such
failure or refusal to disclose having the
capacity and tendency or effect of mis-
leading or deceiving the purchasing or
consuming public.
§ 172.6 Fictitious prices.
It is an unfair trade practice to sell or
offer for sale industry products at prices
purported to be reduced from what are
in fact fictitious prices, or to sell or offer
fact fictitious prices, or to sell or offer
for sale such products at a purported
reduction in price when such purported
reduction is in fact fictitious or 1s other-
wise misleading or deceptive.
§ 172.7 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 by other
false representations, or the false dispar-
agement of competitors’ products in any
respect, or of their business methods, .
selling prices, values, credit terms,
policies, or services, is an unfair trade
practice.
Trade Comnission § 172.11
§ 172.8 False invoicing.
It is an unfair trade practice to with-
hold from or insert in invoices any state-
ment or information by reason of which
omission or insertion a false record is
made, wholly or in part, of the trans-
actions represented on the face of such
invoices, with the effect of thereby mis-
leading or deceiving the purchasing or
consuming public.
§ 172.9 Inducing breach of contract.
It is an unfair trade practice to induce
or attempt to induce the breach of exist-
ing lawful contracts between competi-
tors and their customers, or their sup-
pliers, by any false or deceptive means
whatsoever, or to interfere with or ob-
struct the performance of any such con-
tractual duties or services by any such
means, with the purpose and effect of
unduly hampering, injuring, or embar-
rassing competitors in their business.
§ 172.10 Commercial bribery.
It is an unfair trade practice for a
member of the industry, 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 cus-
tomers or prospective customers, or
to agents, employees, or representatives
of competitors’ customers or prospective
customers, without the knowledge of
their employers or principals, as an in-
ducement to influence their employers
or principals to purchase or contract to
purchase 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
from. dealing or contracting to deal with
competitors.
§ 172.11 Enticing away employees of
competitors.
It is an unfair trade practice for
any member of the industry wilfully
to entice away employees of competi-
tors with the intent and effect of
thereby unduly hampering or injuring
competitors in their business and de-
stroying or substantially lessening com-
petition,
Nore: Nothing in this section shall be con-
strued as prohibiting employees or agents
from seeking more favorable employment,
95
$172.12
§ 172.12 Selling below cost.
_ The practice of selling industry prod-
ucts below the seller’s cost, when pur-
sued with wrongful intent of thereby
injuring a competitor and where the
effect of such practice is to unreasonably
restrain trade, tend to create a mon-~
opoly, or substantially lessen competi-
tion, is an unfair trade practice.
This section is not to be construed as
prohibiting all sales below cost, but only
such selling below the seller’s cost as is
resorted to and pursued as a monopolistic
practice with the wrongful intent re-
ferred to and coupled with the effect of
unreasonably restraining trade, tending
to create a monopoly, or substantially
lessening competition.
The costs 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.
§ 172.13 Discrimination.
(a) Prohibited discriminatory prices,
or rebates, refunds, discounts, credits,
etc., 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-
merce, to grant or allow secretly or
openly, directly or indirectly, any rebate,
refund, discount, credit, purported allow-
ance for alleged imperfect workmanship
or defective material, or other form of
price differential, where such rebate, re-
fand, discount, credit, purported allow-
ance for alleged imperfect workmanship
or defective material, or other form of
price differential, 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 competi-
tion with any person who either grants or
knowingly receives the benefit of such
discrimmation, 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 resaie 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
96
Title 16—Commercial Practices
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;
(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 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 leu
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 fn commerce to pay
or contract for the payment of adver-
tising 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
customer fn connection with the process-
ing, handling, sale, or offering for sale
of any products or commodities manu-
factured, 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.
Chapter !—Federal
(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
facilities connected with the processing,
handling, sale, or offering for sale of such
commodity so purchased upon terms not
accorded to all purchasers on propor-
tionally equal terms.
(e) Inducing or receiving an illegal
discrimination in price. It is 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 forego-
ing 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 practices
within the purview of the Robinson-
Patman Antidiscrimination Act, which
act and the application thereunder of
this section are subject to the limitations
expressed in the amendment to such
Robinson-Patman Antidiscrimination
Act, which amendment was approved
May 26, 1938, and reads as follows:
Be it enacted by the Senate and Houses of
Representatives of the Untted 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-Pat-
man Antidiscrimination Act, shall apply to
purchases of their supplies for their own use
by schools, colleges, universities, public
libraries, churches, hospitals, and charitable
instltutions not operated for profit.
(Sec. 2, 38 Stat. 730, as amended, secs. 2, 8, 4,
49 Stat. 1527, 1528, ch. 283, 52 Stat. 446;
18 U.S. C. 13, 18a, 18b, 13¢, 21a)
§ 172.14 Combination or coercion to fix
prices, suppress competition, or re-
strain trade,
It is an unfair trade practice for a
member of the industry, or any other
person:
(a) To use, directly or indirectly, any
form of threat, intimidation, or coercion
against any member of the industry or
Trade Commission $ 172.201
other person to unlawfully fix, maintain,
or enhance prices, suppress competition,
or restrain trade; or
(bo) To enter into or take part in, di-
rectly or indirectly, any agreement, un-
derstanding, combination, conspiracy, or
concerted action with one or more mem-
bers of the industry, or with one or more
other persons, to unlawfully fix, main-
tain, or enhance prices, suppress com-
petition, or restrain trade.
§ 172.15 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 induce another, directly or in-
directly, to use or promote the use of any
unfair trade practice specified in this
Part.
Group IT
§ 172.101 Publication of price lists and
terms of sale.
(a) The industry approves the prac-
tice of each individual member of the
industry independently publishing and
circulating to the purchasing trade his
own price lists.
(b) The industry approves the prac-
tice of making the terms of sale a part of
all published price schedules.
§ 172.102 Maintenance of accurate rec-
ords.
It is the judgment of the indus-
try that each member should independ-
ently keep proper and accurate records
for determining his costs.
§ 172.103 Arbitration.
The industry approves the practice of
handling business disputes between
members of the industry and their
customers im a fair and reasonable
manner, coupled with a spirit of mod-
eration and good will, and every effort
should be made by the disputants
themselves to compose their differ-
ence. If unable to do so they should,
if possible, submit these disputes to
arbitration.
COMMITTEE ON TRADE PRACTICES
§ 172.201 Industry committee.
The provisions of § 16.1 of this sub-
chapter shall be applicable to an industry
committee established under this part.
[21 PB. 1174, Feb. 21, 1956]
97
§ 173.1
PART 173—-DOLL AND STUFFED
TOY INDUSTRY *
Group I
See.
178.1 Imitation or simulation of trade-
marks, trade names, etc.
178.3 Defamation of competitora or dis-
paragement of their products.
173.8 Discrimination.
173.4 Unfair threats of infringement suits,
178.5 Commercial bribery.
178.6 Selling below cost.
173.7. Consignment distribution.
178.8 Enticing away employees of com-
petitors.
173.9 Use of lottery schemes.
173.10 Combination or coercion to fix
prices, suppress competition, or
restrain trade,
173.11 Tie-In sales.
173.12 Deception in general,
178.18 Deception as to used material or
merchandise,
178.14 Deception as to status of distributor.
173.15 Discriminatory returns.
178.16 False invoicing.
Group I
178.101 Unwarranted return of merchandise.
173.102 Arbitration.
AvutHorITY: The provisions of this Part
173 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 173
appear at 12 F.R. 4225, June 28, 1947, unlesg
otherwise noted. .
Group I
§ 173.1 Imitation or simulation of trade-
marks, trade names, etc.
The imitation or simulation of the
trade-marks, trade names, brands, or
labels of competitors, with the capacity
and tendency or effect of misleading or
deceiving purchasers, prospective pur-
chasers, or the consuming public, is an
unfair trade practice.
§ 173.2 Defamation of competitors or
disparagement of their products.
The defamation of competitors by
falsely imputing to them dishonorable
business conduct, inability to perform
contracts, questionable credit standing,
or by other false representations, or the
false disparagement of the grade, qual-
ity, or manufacture of the products of
competitors, or of their business methods,
selling prices, values, credit terms, pol-
icies, or services, is an unfair trade
practice.
1The term “dolls or stuffed toys,” as used
in this part, shali be understood to include
not only dolis and stuffed toys, but also parts
and accessories therefor.
Title 16—Commerciai Practices
§ 173.3 Discrimination.
(a) Prohibited discriminatory prices,
or rebates, refunds, discounts, credits,
etc., which effect unlawful price discrim-
ination. In the marketing in commerce
of dolls or stuffed toys of like grade and
quality for use, consumption, or resale
within the jurisdiction of the United
States, and subject to subparagraph (1)
@), GD, and (iil) of this paragraph, it is
an unfair trade practice for any member
of the industry engaged therein to dis-
criminate in price between different pur-
chasers 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 pre-
vent competition with such industry
member or with any person who know-
ingly receives the benefit of such dis-
crimination or with their customers.
(1) The inhibitions against such dis-
crimination in price shall be applicable
irrespective of whether the discrimina-
tion in the price itself is effected in the
form, or through the means, of rebates,
refunds, discounts, credits, allowances,
or other form of price differential, and
whether such discounts, refunds, or
other form of price differential, are given
for early buying or are accomplished
through false dating of deliveries or by
any other means or in any other manner.
() However, nothing contained in
this section shall prevent differentials
which make only due allowance for dif-
ferences in the cost of manufacture, sale,
or delivery resulting from the differing
Methods or quantities in which dolls or
stuffed toys are sold or delivered to said
purchasers.
ii) Nor shall anything contained in
this section prevent persons engaged in
selling such products in commerce from
selecting their own customers in bona
fide transactions and not in restraint of
trade.
(ii) Nor shall anything contained tn
this section prevent price changes from
time to time where made in response tu
changing conditions affecting either (a)
the market for the products concerned,
or (b) the marketability of the products,
such as, but not limited to, actual or im-
minent deterioration of perishable goods,
obsolescence of seasonal goods, distress
sales under court process, or sales in good
faith in discontinuance of business in the
products concerned.
(b) ‘Prohibited brokerage or commis-
stons. In the selling of dolls or stuffed
toys in commerce, it is an unfair trade