Fine And Wrapping Paper Distributing Industry
16 CFR Part 189 · Trade practice rules · in the Code of Federal Regulations 1959-1976 (10 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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: 1959 CFR
Text (1976 edition, OCR)
Chapter |—Federal
that uniform standards, which are equi-
table as between buyer and seller and fair
to the trade and purchasing public, be
used in the settlement of disputes con-
cerning the quality of the industry’s
goods. Nothing in this section, however,
shall be construed as warranting classifi-
cation of any fabric of the industry as a
“first” when not fully qualified for such
designation; and in this connection, in-
dustry members recognize it as their
obligation to in nowise contribute to any
misrepresentation or deception as to
grade, quality, or otherwise, in the
further marketing of the fabric or prod-
ucts made therefrom.
PART 189—FINE AND WRAPPING
PAPER DISTRIBUTING INDUSTRY
Group I
Bec.
189.1 Misrepresentation in general.
189.2 Misrepresentation as to the charac-
ter of business.
189.3 Deception as to available supply of
advertised merchandise.
189.4 Palse invoicing.
189.5 False and misleading price quota-
tions, etc.
189.6 Misrepresenting products 8s con-
forming to standard.
189.7 Imitation or simulation of trade-
marks, trade names, etc.
189.8 Deceptive use of trade or corporate
names, trade-marks, etc.
189.9 Substitution of products.
189.10 Enticing away employees of com-
petitors.
188.11 Procurement of competitors’ cone
fidential information by unfair
means and wrongful use thereof.
189.12 Defamation of competitors or dis-
paragement of their products.
189.18 Selling below cost.
189.14 Combination or coercion to fix
. prices, suppress competition, or
restrain trade.
189.15 Prohibited discrimination.
189.16 Coercing purchase of one product
as & prerequisite to the purchase
of other products.
- 189.17 Abetting use of unfair trade prac-
tices,
Group
189.101 Arbitration.
189.102 Return of merchandise.
189.103 Price lists.
189.104 Cost records.
189.105 Dissemination of credit informa-
tion,
189.106 Repudiation of contracts.
189.107 Baturday-Sunday closing.
189.108 Labor conditions.
189.109 Statistical information.
Trade Commission § 189.4
COMMITTEE ON TRADE PRACTICES
Sec.
189.201 Industry committee.
AuTHoRITY: The provisions of this Part
189 issued under secs. 6, 5, 38 Stat. 721, 719;
15 U.S.C, 46, 45, unless otherwise noted.
Source: The provisions of this Part 189
appear at 15 F.R. 2901, May 16, 1950, unless
otherwise noted.
Group I
_§ 189.1 Misrepresentation in general, ‘
It is an unfair trade practice to use, or
cause or promote the use of, any trade
promotional literature, advertising mat-
ter, mark, brand, label, designation, or
other representation, however dissemi-
nated or published, which has the capac-
ity and tendency or effect of misleading
or deceiving purchasers or prospective
purchasers with respect to the grade,
quality, quantity, price, value, origin, size,
weight, strength, thickness, use, prepa-
ration, composition or “furnish”, pack-
ing, count, finish, manufacture, oF
distribution of any product of the indus-
try, or in any other material respect.
Nore: The word “furnish” as used in this
section means the composite ingredients fed
into a paper-making machine to produce a
particular kind of paper.
8189.2 Misrepresentation as to the
character of business.
It is an unfair trade practice for any
member of the industry, in the course of
or in connection with the distribution or
sale of industry products, to represent,
directly or indirectly, that he is a manu-
facturer, wholesaler, distributor, or ree
tailer of industry products when such {s
not the fact, or in any other manner to
misrepresent the character, extent, or
type of his business.
§ 189.3 Deception as to available supply
erchandis
of advertised m ise.
The advertising or offering for sale of
small and inadequate supplies (whether
as closeouts or otherwise) of well-known
brands of products at greatly reduced or
bargain prices without disclosure of the
quantity or of the inadequacy of the sup-
ply available at such prices, with the
capacity and tendency or effect of
thereby misleading or’ deceiving the pur-
chasing or consuming public, is an unfaiy
trade practice.
§ 189.4 False invoicing.
Withholding from or inserting in an
invoice, billing, or statement any mate-
rial information by reason of which
155
§ 189.5
omission or insertion a false record is
made, wholly or in part, of the transac-
tion which such invoice, billing, or state-
ment purports to represent, with the
purpose and effect of thereby misleading
or deceiving purchasers, prospective pur-
chasers, or the consuming public, is an
unfair trade practice.
§ 189.5 False and misleading price quo-
tations, etc.
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 ca-
pacity and tendency or effect of thereby
misleading or deceiving purchasers or
prospective purchasers, is an unfalr
trade practice.
§ 189.6 Misrepreseniing products as con-
forming to standard.
. Representing, through advertisement
or otherwise, that any products of the in-
dustry conform to a standard recognized
in or applicable to the industry when
such is not the fact, with the capacity
and tendency or effect of misleading or
deceiving the purchasing or consuming
public, is an unfair trade practice.
§ 189.7 Imitation or simulation of trade-
marks, trade names, eic.
The imitation or simulation of the
trade-marks, trade tames, brands, or
Jabels of competitors, with the capacity
and tendency or effect of misleading or
deceiving the purchasing or consuming
public, is an unfair trade practice.
§ 189.8 Deceptive use of trade or cor-
porate 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 purchasing or consuming
public as to the name, nature, or origin
of any product of the industry or of any
material used therein, or which is false
or misleading in any other respect, is
an unfair trade practice.
8189.9 Substitution of products.
The practice of shipping or delivering
products which do not conform to sam-
ples submitted, to specifications upon
which the sale is consummated, or to
representations made prior to securing
the order, without the consent of the
purchasers to such substitution and with
Title 16—Commercial Practices
the capacity and tendency or effect of
misleading or deceiving the purchasing
or consuming public, is an unfair trade
practice.
Norz: Nothing in this section shall be con-
strued as preventing the application of such
tolerances as are agreed upon between
buyer and seller or are otherwise deemed
reasonable and proper and where no misrep-
resentation or deception of the purchasing
Public is practiced or promoted in relation
to the product or its deviation from sam-
ple or specifications.
§ 189.10 Enticmg away employees of
competitors.
It is an unfair trade practice for any
member of the industry wilfully to entice
away employees of competitors with the
intent and effect of thereby unduly ham-
pering or injuring competitors in their
business and destroying or substantially
lessening competition: Provided, That
nothing in this section shall be construed
as prohibiting employees or agents from
seeking or obtaining more favorable
employment.
§ 189.11 Procurement of competitors’
confidential information by unfair
means and wrongful! use thereof.
It is an unfair trade practice for any
member of the industry to obtain in-
formation concerning the business of a
competitor by bribery of any employee or
agent of such competitor, by false or mis-
Jeading statements or representations, by
the impersonation of one in authority, or
by any other unfair means, and to use the
information so obtained in such manner
as to injure said competitor in his busi-
ness or tO suppress competition or
unreasonably restrain trade.
§ 189.12 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 dis-
paragement of the products of competi-
tors in any respect, or of their business
methods, selling prices, values, credit
terms, policies, or services, is an unfair
trade practice.
§ 189.13 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
156
Chapter I—Federal
restrain trade, tend to create a monop-
oly, or substantially lessen competition,
is an unfair trade practice.
(a) 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 monop-
olistic practice with the wrongful intent
referred to and coupled with the effect of
unreasonably restraining trade, tending
to create a monopoly, or substantially
lessening competition.
(b) The costs referred to in the 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,
§ 189.14 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
other person to unlawfully fix, maintain,
or enhance prices, suppress competition,
or restrain trade; or
(b) To enter into or take part in, di-
rectly or indirectly, any agreement,
understanding, combination, conspiracy,
or concerted action with one or more
members of the industry, or with one or
more other persons, to unlawfully fix,
maintain, or enhance prices, suppress
competition, or restrain trade.
§ 189.15 Prohibited discrimination.2
(a) Prohibited discriminatory prices,
or rebates, refunds, discounts, credits,
etc., which effect unlawful price discrim-
ination. In the marketing in commerce
of products of the industry of like grade
and quality for use, consumption, or
resale within the jurisdiction of the
United States, and subject to subpara-
graph (1) qd), (i) and dili) of this
1 As used throughout this section the word
“commerce” 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 jurisdiction 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
foreign nation, or within the District of Co-
lumbia or any Territory or any insular pos-
session or other place under the jurisdiction
of the United States.”
Trade Commission § 189.15
paragraph, it is an unfair trade practice
for any member of the industry engaged
therein to discriminate in price between
different purchasers where the effect
thereof may be substantially to lessen
competition or tend to create a monopoly
in any line of commerce, or to injure, de~
stroy, or prevent competition with such
industry member or with any person who
knowingly receives the benefit of such
discrimination or with their customers.
(1) The inhibitions against such dis-
crimination in price shall be applicable
irrespective of whether the discrimina-
tion in price itself is effected in the form,
or through the means, of rebates, re-
funds, discounts, credits, allowances, or
other form of price differential.
(i) However, 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 the prod-
ucts are sold or delivered to said pur-
chasers,
di) Nor shall anything contained in
this paragraph prevent persons en-
gaged in selling products in commerce
from selecting their own customers in
bona fide transactions and not in re-
straint of trade.
(iii) Nor shall anything contained in
this paragraph prevent price changes
from time to time where made in re-
sponse to changing conditions affecti
the market for or the marketability of
the goods concerned, such as but not
limited to actual or imminent deteriora-
tion of perishable goods, obsolescence of
seasonal goods, distress sales under court
process, or sales in good faith in discon-
tinuance of business in the goods con-
cerned.
(b) Prohibited brokerage or commtis-
sions. In the selling of industry products
in commerce, it is an unfair trade prac-
tice for any member of the industry en-
gaged therein to pay or grant, or to re-
ceive or accept, any commission, broker-
age, or other compensation, or any allow-
ance or discount in lieu thereof, except
for services rendered in connection with
the sale or purchase of such products,
either to the other party to such trans-
action or to an agent, representative, or
other intermediary therein, where such
intermediary is acting in fact for or in
behalf, or is subject to the direct or in-
direct control, of any party to such trans-
action other than the person by whom
157
$ 189.16
such compensation is so granted or paid.
(ce) Prohibited advertising or pramo-
tional allowances, etc. In the selling of
industry products in commerce by any
member of the industry, and in the
eourse thereof, it is an unfair trade prac-
tice for such member to pay or contract
for the payment of anything of value to
or for the benefit of his customer as com-
pensation or in consideration for certain
services or facilities furnished by or
through such customer, unless such pay-
ment or consideration is available on pro-
portionally equal terms to all other cus-
tomers of such member competing in the
distribution of such products.
(1) As used in this paragraph, the cer-
tain services or facilities referred to are
such as are furnished by or through the
eustomer in connection with the process-
ing, handling, sale, or offering for sale, of
such industry member’s products.
(d) Prohibited discrimination in serv-
ices or facilities. In the sale of industry
products bought for resale, with or with-
out processing, it is an unfair trade prac-
tice for any member of the industry to
discriminate in favor of one purchaser
ageinst another purchaser by furnishing
certain services or facilities upon terms
not accorded to all purchasers on pro-
portionally equal terms.
(1) Said services or facilities referred
to in this paragraph are such as are con-
nected with the processing, handling,
sale, or offering for sale, of the products
purchased, and the term “furnishing”
as used in this paragraph shall be con-
strued as including contracting to fur-
nish, and contributing to the furnishing
ef, the services or facilities.
(e) Inducing or receiving an illegal
discrimination in price. It is an unfair
trade practice for any member of the
industry, in the course of commerce in
which he is engaged, knowingly to induce
or receive a discrimination in price
which is prohibited by the provisions in
paragraphs (a) to (d) of this section.
(ff) Exemptions. The inhibitions of
this section shall not apply to purchases
of their supplies for their own use by
schools, colleges, universities, public li-
braries, churches, hospitals, and chari-
table institutions not operated for profit.
£189.16 Coercing purchase of one
product as a prerequisite to the pur-
chase of other products.
The practice of coercing the purchase
of one or more products as a prerequisite
Title 16—Commercial Practices
to the purchase of one or more 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.
§ 189.17 Abetting use of unfair trade
practices.
It is an unfair trade practice for any
Person, firm, or corporation to abet,
coerce, or induce another, directly or
indirectly, to use or promote the use
of any unfair trade practice specified in
$$ 189.1 to 189.16.
Group II
§ 189.101 Arhbitratiou.
The industry approves the practice of
handling business disputes between
members of the industry and their cus-
tomers and suppliers in a fair and rea-
sonable manner, coupled with a spirit
of moderation and good will, and every
effort should be made by the disputants
themselves to compose their differences.
If unable to do so they should, if possible,
submit these disputes to impartial ar-
bitration,
§ 189.102 Return of merchandise.
The practice, by members of the indus-
try, of selling merchandise and later
permitting the purchaser to return it for
credit or refund of purchase price, with-
out just cause, creates waste and loss,
increases the cost of doing business to
the detriment of both the industry and
the public, and is condemned by the in-
dustry, subject, however, to the require-
ments and limitations named in § 189.15.
8 189.103 Price lists.
The industry approves the practice of
each individual member of the industry
independently publishing and circulating
to customers and prospective customers
his own price lists. The industry also
approves the practice of such member
including his terms of sale, independ-
ently arrived at, as part of his own pub-
lished price list.
§ 189.104 Cost records,
(a) It is the judgment of the industry
that each member should independently
Keep proper and accurate records for
determining his costs.
(b) It is the judgment of the industry
that the individual and independent use
by any member of sound cost-accounting
methods, whereby such member’s own
158
Chapter |-——Federal
costs are individually and independently
determined by him, is in the public inter-
est and is recommended by the industry.
(c) It is understood that no action
shall be taken under this section which
shall be in conflict with any provision of
law or any provision of any order of the
Federal Trade Commission with respect
to the industry, nor shall any person be
expected to use or adopt any cost-ac-
counting method or system, or to comply
therewith, except as he may desire.
$ 189.105 Dissemination of credit in-
formation.
The industry records its approval of
the distribution among members of the
industry of information covering delin-
‘quent and siow credit accounts insofar
as such may be lawfully done.
§ 189.106 Repudiation of contracts.
Lawful contracts are business obliga-
tions which should be performed in let-
ter and in spirit. The repudiation of
contracts by sellers or by buyers is con-
demned by the industry.
$ 189.107 Saturday-Sunday closing.
In the interest of the public and indus-
try employees, it is recommended by the
industry that the members adhere to
the usual practice of not opening their
places of business on Saturdays and
Sundays for the transaction of business.
§$ 189.108 Labor conditions.
It is the Judgment of the industry that
the elimination of oppressive child labor
and the establishment of adequate mini-
mum wages and reasonable maximum
hours of work by all members of the in-
‘dustry are principles to be encouraged
as being in the public interest and con-
ducive to fair competition.
§$ 189.109 Statistical information.
The members of the industry believe
that the collection and publication In the
widest possible manner of statistics re-
‘specting market informeticn on the
operations of the industry as a whole will
prove helpful to all interested parties.
Such statistics shall not be compiled,
disseminated, or used in any manner
which has the effect of revealing the
identity of an industry member, infor-
mation peculiar to the operations of an
industry member, or transactions en-
gaged in by an industry member or a
buyer of industry products; nor shall
any person be compelled to furnish
any data contemplated by this section.
Trade Commission § 189.201
The compilation, dissemination, or use
of any statistical information shall not
provide for nor result in any action vio-
lative of law or in conflict with the
provisions of any order issued by the
Federal Trade Commission with respect
to the members of this industry. It is
further understood that no action shall
be taken under this section which,
directly or indirectly, would tend to ef-
fectuate the collective, collusive, or co-
operative fixing or maintenance of
prices, or other restraints of trade.
COMMITTEE ON TRADE PRACTICES
$ 189.201 Industry committee.
The provisions of § 16.1 of this sub-
chapter shall be applicable to an Indus-
wy committee established under this
part.
[21 P. R. 1174, Feb. 21, 1956]
PART 190—SHOE FINDERS
INDUSTRY
Groour I
Sec.
190.1 Discrimination.
190.2 Inducing breach of contract.
190.3 False invoicing.
190.4 Selling below cost.
190.5 Commercial bribery.
190.6 Coercing purchase of one product
as a prerequisite to purchase of
other products.
190.7 Defamation of competitors.
190.8 Disparagement of competitor’s
products.
190.9 Misrepresentation as to character
of business.
190.10 Deception (general).
190.11 Deception through upgrading or
misrepresentation of grade ofr
quality.
190.12 Misuse of terms “close-outs,” “obso-
lete items,” “discontinued lines,”
etc.
190.18 Enticing away employees of com-
petitors,
190.14 Combination or coercion to fix
prices, interfere with purchases —
of supplies, suppress competition,
or restrain trade.
Gxrour It
190.101 Malntenance of accurate records.
190.102 Price sts,
Avrnortrr: The provisions of this Part
190 issued under seca. 6, 5, 38 Stat. 721, 719;
15 U.S.C. 46, 48, unless otherwise noted.
Sourcr: The provisions of this Part 190
appear at 15 FR 4000, June 22, 1950, unless
otherwise noted.
159