Commercial Dental Laboratory Industry
16 CFR Part 18 · Trade practice rules · in the Code of Federal Regulations 1959-1977 (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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1977 CFR · Earliest edition: 1959 CFR
Text (1977 edition, OCR)
§ 17.1
§17.1 Application of guides and trade
practice rules in preventing unlawful
competitive restraints.
(a) Industry guides are administrative
interpretations of laws administered by
the Commission for the guidance of the
public in conducting its affairs in con-
formity with legal requirements. They
provide the basis for voluntary and
gimulitaneous abandonment of unlawful
practices by members of industry. Failure
to comply with the guides may result in
corrective action by the Commission
under applicable statutory provisions.
Guides may relate to a practice common
to many industries or to specific practices
of a particular industry.
(b) Trade practice rules promulgated
by the Commission are designed to foster
and promote the maintenance of fair
competitive conditions in the interest of
protecting industry, trade, and the pub-
lic. It is to this end, and to the exclusion
of any act or practice which suppresses
competition, restrains trade, fixes or con-
trols price through combination or agree-
ment, or which otherwise injures, de-
stroys, or prevents competition, that the
rules are to be applied.
[82 F.R. 15540, Nov. 8, 1967]
§17.2 Definition of “commerce.”
As used in the sections of the rules on
the subject of discrimination, the word
“commerce” means “trade or commerce
among the several States and with for-
eign nations, or between the District of
Columbia or any Territory of the United
States and any State, Territory, or for-
eign nation, or between any insular pos-
sessions or other places under the Juris-
diction of the United States, or between
any such possession or place and any
State or Territory of the United States
or the District of Columbia or any for-
eign nation, or within the District of
Columbia or any Territory or any insular
possession or other place under the ju-
risdiction of the United States.”
§17.3 Definition of Group I rules.
The unfair trade practices embraced
in the Group I rules herein are consid-
ered to be unfair methods of competi-
tion, unfair or deceptive acts or prac-
tices, or other illegal practices, prohib-
ited under laws administered by the
Federal Trade Commission; and appro-
priate proceedings in the public Interest
will be taken by the Commission to pre-
vent the use, by any person, partnership,
corporation, or other organization sub-
Titie 16—Commercial Practices
ject to its jurisdiction, of such unlawful
practices in commerce.
§ 17.4 Definition of Group II rules.
Compliance with trade practice provi-
sions in Group IZ rules is considered to be
conducive to sound business methods
and is to be encouraged and promoted
individually or through voluntary coop-
eration exercised in accordance with
existing law. Nonobservance of such
rules does not per se constitute violation
of law. Where, however, the practice of
not complying with any such Group IZ
rules is followed in such manner as to
result in unfair methods of competition,
or unfair or deceptive acts or practices,
corrective proceedings may be instituted
by the Commission as in the case viola-
tion of Group I ruies.
PART 18—-COMMERCIAL DENTAL
LABORATORY INDUSTRY
Grourl
Sec,
18.1 Deception (general).
18.2 Deceptive demonstrations and claims.
18.3 Substitution of products.
18.4 False invoicing.
18.5 Defamation of competitors or false
disparagement of their products.
18.6 Enticing away employees of competi-
tors.
18.7 Deceptive use of trade or corporate
names, trademarks, etc.
18.8 Use of the word “free.”
18.9 Coercing purchase of one product as
@ prerequisite to purchase of other
products.
18.10 Fictitious prices.
18.11 Guarantees.
18.12 Prohibited discrimination.
18.13 Exclusive deals.
Appendix
Aurnoriry: The provisions of Part 18
issued under secs. 6, &, 38 Stat. 721, 718; 16
U.S.C. 46, 45, unless otherwise noted.
Source: The provisions of Part 18 appear’
at 20 FR. 8282, Nov. 4, 1955, unless otherwise
noted.
Group I
§ 18.1 Deception (general).
It is an unfair trade practice to sell,
offer for sale, or distribute any industry
product, or promote the sale or distribu-
tion thereof, under any representation
or by any method or under any circum-
stance or condition which has the capac-
ity and tendency or effect of misleading
or deceiving purchasers or prospective
purchasers:
(a) With respect to a process or tech-
nique used in the preparation or fabri-
cation of any industry product; or
266
Chapter !—Federal Trade Commission
(b) With respect to the materials used
in the fabrication of any industry prod-
uct; or
(c) Which is false, misleading, or de-
ceptive in any other material respect.
Nors: Nothing in this section, nor in any
of the other rules for this industry, is to
be construed as relieving any industry mem-
per of the necessity of complying with the
requirements of the Federal Food, Drug and
Cosemtic Act, and regulations issued there-
under.
{22 F.R. 4192, June 14, 1957]
§18.2 Deceptive demonstrations and
claims.
(a) In the sale, offering for sale, or
distribution of industry products, or in
the promotion and distribution thereof,
it is an unfair trade practice to demon-
strate any of such products in a manner,
or under circumstances, having the
capacity and tendency or effect of creat-
ing a false impression in the minds of
purchasers or prospective purchasers as
to the actual benefits they will obtair. as
the result of their purchase and use of
said products.
(b) It is an unfair trade practice for
a@ member of the industry to represent,
claim, or guarantee that his laboratory
has the skill, ability, equipment, or per-
sonnel to construct, fabricate, or proc-
ess a product of the industry under a
specific technique or method, unless such
representation, claim, or guarantee is
made with the knowledge that complete
and satisfactory accomplishment can be
furnished with the facilities and per-
sonnel of such member laboratory.
(ec). It is an unfair trade practice for
any member of the industry to represent,
claim, or guarantee that any technique
or method of manufacturer used is the
equivalent of, or substitute for, any
other method or technique, unless such
is the fact.
[22 F.R. 4192, June 14, 1957)
§ 18.3 Substitution of products.
It is an unfair trade practice for a
member of the industry to make an un-
authorized substitution of products,
where such a substitution has the capac-
ity and tendency or effect of misleading
or deceiving purchasers or prospective
purchasers by:
(a) Shipping or delivering industry
products which do not conform to sam-
ples submitted, to specifications upon
which the sale is consummated, or to
representations made prior to securing
§ 18.7
the order, without advising the pur-
chaser of the substitution and obtaining
his consent thereto prior to making ship-
ment or delivery; or
(b) Falsely representing the reason
for making a substitution.
§ 18.4 False invoicing.
Withholding from or inserting in in-
voices or order tickets any statements or
information by reason of which omission
or insertion a false record is made,
wholly or in part, of the transactions
represented on the face of such invoices
or order tickets, with the capacity and
tendency or effect of thereby misleading
or deceiving purchasers or prospective
purchasers, is an unfair trade practice.
§ 18.5 Defamation of competitors or
false disparagement of their prod-
ucts.
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 dis-
paragement of the grade, quality, or
manufacture of the products of competi-
tors, or of their business methods, selling
prices, values, credit terms, policies,
services, or conditions of employment, is
an unfair trade practice.
§18.6 Enticing
competitors.
It is an unfair trade practice for any
member of the industry willfully to en-
tice away employees or sales representa-
tives of competitors with the intent and
effect of thereby unduly hampering or
injuring competitors in their business
and destroying or substantially lessening
competition: Provided, That nothing in
this section shall be construed as pro~
hibiting employees from seeking more
favorable employment, or as prohibiting
employers from hiring or offering em-
ployment to employees of competitors in
good faith and not for the purpose of
inflicting injury on a competitor.
§ 18.7 Deceptive use of trade or corpo-
rate names, trade-marks, etc.
The use of any trade name, corporate
name, trade-mark, or other trade desig-
nation which has the capacity and
tendency or effect of misleading or de-
ceiving the purchaser as to the name,
nature, efficacy, or origin of any prod-
uct of the industry, or of any material
used therein, or which is false or mis-
away employees of
267
§ 18.8
leading to any other respect, is an unfair
trade practice.
§ 18.8 Use of the word “free.”
In connection with the sale, offering
for sale, or distribution of industry prod-
ucts, it is an unfair trade practice to use
the word “free,” or any other word or
words of similar import, in advertise-
ments or in other offers to purchasers or
prospective purchasers, as descriptive of
an article of merchandise, or service,
which is not an unconditional gift, under
the following circumstances:
(a) When all the conditions, obliga-
tions, or other prerequisites to the re-
ceipt and retention of the “free” articie
of merchandise or service offered are not
clearly and conspicuously set forth at the
outset so as to leave no reasonable proba-
bility that the terms of the offer will be
misunderstood; and, regardless of such
disclosure;
(b) When, with respect to any article
of merchandise required to be purchased
in order to obtain the “free” article or
service, the offeror (1) increases the
ordinary and usual price of such article
of merchandise, or (2) reduces its qual-
ity, or (3) reduces the quantity or size
thereof.
Notre: The disclosure required by para-
graph (a) of this section shall appear in
close conjunction with the word “free” (or
other word or words of similar import) wher-
ever such word first appears in each adver-
tisement or offer. A disclosure in the form
of a footnote, to which reference is made by
use of an asterisk or other symbol placed
next to the word “free,” will not be regarded
as compliance.
§ 18.9 Coercing purchase of one prod-
uct as a prerequisite to purchase of
other products.
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 sub-
stantially to lessen competition or tend
to create a monopoly or unreasonably
to restrain trade, is an unfair trade
practice.
§ 18.10 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
for sale such products at a purported re-
duction in price when such purported re-
duction is in fact fictitious or is other-
wise inisleading or deceptive.
Title 16—Commercial Practices
§ 18.11 Guarantees.
In the sale, offering for sale, or distri-
bution of industry products, it is an un-
fair trade practice for any industry
member:
(a) To represent that any industry
product is guaranteed unless, in con-
junction with such representation, the
identity of the guarantor, the extent
and nature of the guarantee, and any
material conditions or limitations relat-
ing to the liability of the guarantor un-
der the guarantee, are fairly disclosed;
or
(b) To use any guarantee respecting
an industry product in which conditions
or limitations relating to the Mability of
the guarantor are deceptively minimized
or concealed; or
(c) To offer or use any guarantee re-
specting an industry product under
which the guarantor fails to scrupulously
observe his obligations.
§ 18.12 Prohibited discrimination.’
(a) Prohibited discriminatory prices,
rebates, refunds, discounts, credits, etc.,
which effect unlawful price discrimina-
tion. 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, or other form of
price differential, where such rebate, re-
fund, discount, credit, 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.
1 As used in this section, the word “com-
merce” means “trade or commerce among the
several States and with foreign nations, or
between the District of Columbia or any
Territory of the United States and any State,
Territory, or foreign nation, or between any
insular possessions or other places under the
jurisdiotion of the United States, or between
any such possession or place and any State
or Territory of the United States or the Dis-
trict of Columbia or any foreign nation, or
within the District of Columbia or any Ter-
ritory or any insular possession or other place
under the jurisdiction of the United States.”
268
Chapter I—Federal
discrimination, or with customers of
either of them: Provided, however:
(1) That the goods involved in any
such transaction are sold for use, con-
sumption, or resale within any place un-
der the jurisdiction of the United States,
and are not purchased by schools,
colleges, universities, public libraries,
churches, hospitals, and charitable in-
stitutions not operated for profit, as sup-
plies for their own use.
(2) That nothing contained in this
paragraph 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 such
commodities are to such purchasers sold
or delivered;
Nore: Cost justification under the above
proviso depends upon net savings in cost
based on all facts relevant to the transac-
tions under the terms of subparagraph (2)
of this paragraph. For example, if a seller
regularly grants a discount based upon the
purcnase of a specified quantity by a single
order for a single delivery, and this discount
ts justified by cost differences, it does not
follow that the same discount can be cost
justified if granted to a purchaser of the
same quantity by multiple orders or for
multiple deliveries.
(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
paragraph shail prevent price changes
from time to time where made in re-
sponse to changing conditions affecting
the market for or the marketability of
the goods concerned, such as but not
limited to obsolescence of seasonal goods,
imminent deterioration of perishable
goods, distress sales under court process,
or sales in good faith in discontinuance
of business in the goods concerned;
(5) That nothing contained in this
section shall prevent the meeting in good
faith of an equally low price of a
competitor.
(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
Trade Commission App.
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 control,
of any party to such transaction other
than the person by whom such compen-
sation is so granted or paid.
(c) 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 fore-
going provisions of this section.
(d) Purchases by U.S. Government;
applicability of Robinson-Patman Anti-
discrimination Act to same. In an opin-
ion submitted to the Secretary of War
under date of December 28, 1936, the
U.S. Attorney General advised that the
Robinson-P atman Antidiscrimination
Act “is not applicable to Government
contracts for supplies.” (38 Opinions,
Attorney General 539.)
{22 F.R. 4192, June 14, 1957]
§ 18.13 Exclusive deals.
It is an unfair trade practice for any
member of the industry to contract to
Sell or sell any industry product, or fix a
price charged therefor, or discount from,
or rebate upon, such price, on the con-
dition, agreement, or understanding that
the purchaser thereof shall not use or
deal in the products of a competitor or
competitors of such industry member,
where the effect of such sale or contract
for sale, or of such condition, agreement,.
or understanding, may be substantially
to lessen competition or tend to create a
monopoly in any line of commerce,
APPENDIX
For the information of industry members,
there is appended to the rules in this part,
but not made a part of them, a copy of the
Federal Denture Act. This act is not admin-
istered by the Federal Trade Commission,
but is a criminal act administered by the
United States Department of Justice. Noth-
ing in the rules in this part is to be con-
strued as relieving any member of the in-
dustry from complying with the provisions
of the said act.
FEDERAL DENTURE ACT (18 USCA 1821; 62 STAT,
786, JUNE 25, 1948)
Whoever transports by mail or otherwise
to or within the District of Columbia, the
Canal Zone or any Possession of the United
269
$21.0
States or uses the mails or any instrumen-
tality of interstate commerce for the purpose
of sending or bringing into any State or Ter-
ritory any set of artificial teeth or prosthetic
‘dental appliance or other denture, con-
structed from any cast or impression made
by any person other than, or without the
authorization or prescription of, a person
licensed to practice dentistry under the laws
of the place into which such denture is sent
‘or brought, where such laws prohibit;
(1) The taking of impressions or casts of
the human mouth or teeth by a person not
licensed under such laws to practice den-
tiot .
tistry;
(2) The construction or supply of dentures
by a person other than, or without the au-
thorization or prescription of, a person H-
censed under such laws to practice dentistry;
or
(3) The construction or supply of dentures
from impressions or casts made by a person
not NMcensed under such laws to practice
dentistry—
shall be fined not more than $1,000 or im-
prisoned not more than one year, or both.
PART 21—CORSET, BRASSIERE, AND
ALLIED PRODUCTS INDUSTRY
Sec.
21.0 Definitions.
Group I
21.1 Prohibited discrimination.
21.2 Misrepresentation in general.
21.3 Misrepresentation as to weight-reduc-
ing properties.
21.4 [Reserved]
21.5 Deception as to foreign ortgin.
21.6 Defamation of competitors or false
disparagement of their products. !
21.7 Commercial bribery.
21.8 Inducing breach of contract.
21.9 Prohlbited forms of trade restraints
(unlawful price, price fixing, etc.).
21.10 Exclusive deals,
21.11 Guarantees, etc.
21.12 Push money.
21.13 Discriminatory returns.
21.14 Consignment distribution,
21.15 Seconds, irregulars, or rejects.
21.16 Fictitious prices, price Lists, etc.
21.17 Misuse of terms “close-outs,” “discon-
tinued lines,’’ “special bargains,”
etc,
‘21.18 Aiding or abetting use of unfair
trade practices.
AvTHoriTr: The provisions of this Part 21
issued under secs. 6, 5, 38 Stat. 721, 719; 15
U.S.C. 46, 45, unless otherwise noted.
Sovurcs: The provision of this Part 21 ap-
pear at 20 F.R. 8811, Deo. 1, 1955, unless
otherwise noted.
Title 16—Commercial Practices
§ 21.0 Definitions.
As used in the rules in this part, the
terms “industry member’ and “industry
products” shall have the folowing mean-
ings, respectively:
(a) Industry member. Any person,
firm, corporation, or organization en-
gaged in the manufacture, importation,
or marketing at any level of distribu-
tion, of industry products. Industry
members who purchase industry prod-
ucts for resale are sometimes referred
to in these rules as customers or com-
peting customers.
(b) Industry products. Corsets,
brassieres, girdles, combinations, garter
belts, bust pads, and related foundation
garments.
Group I
§ 21.1 Prohibited discrimination."
(a) Prohibited discriminatory prices,
rebates, refunds, discounts, credits, etc.,
which effect unlawful price discrimina-
tion. 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, or other form
of price differential (whether in the guise
of samples, or so-called free deals, or
otherwise), where such rebate, refund,
discount, credit, 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 competition
with any person who either grants or
knowingly receives the benefit of such
2 As used in this section, the word ‘“‘com-
merce”? means “trade or commerce among the
several States and with foreign nations, or
between the District of Columbia or any Ter-
ritory of the United States and any State,
Territory, or foreign nation, or between any
insular possessions or other places under the
jurisdiction of the United States, or between
any such possession or place and any State or
Territory of the United States or the Dis-
trict of Columbia or any foreign nation, or
within the District of Columbia or any Ter-
ritory or any insular possession or other
Place under the jurisdiction of the United
States.”
270