Milk Bottle Cap And Closure Industry

16 CFR Part 198 · Trade practice rules · in the Code of Federal Regulations 1959-1977 (11 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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)

Chapter !—-Federal Trade Commission

under the provisions of paragraph (a)
of this section.

§ 197.3 Installment sales contract con-
taining blank spaces to be filled in
after its execution.

In the execution of an installment
sales contract, it is an unfair trade prac-
tice for the seller to utilize the device of
having the purchaser sign a contract or
receipt in blank, to be filled in subse-
quently by the seller or financing insti-
tution with the purpose or effect of
deceiving the purchaser.

Note: Nothing in this section shall be con-
strued as prohibiting unfilled blanks for in-
sertion of identifylng serial numbers and
identifying marks when Knowledge concern-
ing such numbers or marks is not available
to the dealer at the time of the execution
of the contract: Provided, That there 1s a
elear and sufficient description of the motor
vehicle which shail be fully adequate to
identify 1t readily: And provided further,
That such identifying numbers and ldentify-
ing marks are subsequently inserted in the
contract upon the delivery of the motor
vehicle.

§ 197.4 False, misleading, or deceptive
use of rate charts in connection with
the installment sale and financing of
motor vehicles.

It is an unfair trade practice for any
seller or financing institution, either in-
dividually or in agreement, combination,
conspiracy or collusion with each other,
through the misuse of a rate or rate
charts, or any other device or in any
other manner, to make a false, mislead-
ing, or deceptive representation to the
purchaser of a motor vehicle as to the
finance charge required by a financing
institution to finance the amount of the
unpaid balance of the contract.

§ 197.5 Requiring the placing of insur-
ance hy the seller or financing insti-
tution as a condition to the sale or
financing of a motor vehicle.

It is an unfair trade practice for any
seller or financing institution, either in-
dividually or in agreement or collusion
with each other, to condition the install-
ment sale or financing of a motor vehicle
on the purchase of an insurance policy
from a particular insurance company
when equivalent or better coverage by
another insurance company is available
and the purchaser desires to purchase
the policy of such other company, where
the effect of such conditioning may be
to substantially lessen, stifle, or sup-
press competition. This section shall
not prevent the exercise by the financing

§ 198.1

institution of the right to approve or dis-
approve for good cause the insurance
company selected to underwrite the in-
surance.

PART 198—-MILK BOTTLE CAP AND
CLOSURE INDUSTRY

Sec.
198.0 Definition; industry products
Grovur I

198.1 Misrepresentation (general).

198.2 Misrepresentation as to character
of business.

198.3 Deceptive use of trade or corporata
names, trade-marks, etc.

198.4 Misrepresentation as to installment
sales contracts, their terms, con-
ditions, etc.

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

198.6 Unlawful coercion or combinations
in restraint of trade.

198.7 Defamation of competitors or false
disparagement of their products.

1983- Substitution of products.

198.9 Palse invoicing.

198.10 Inducing breach of contract.

198.11 Commercial bribery.

198.12 Enticing away employees of compet-
itors.

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

198.14 Unfair threats of infringement suits.

198.15 Unlawful interference.

198.16 Selling below cost.

198.17 Prohibited discrimination.

198.18 Discriminatory returns.

Grovur IT

198.101 Price lists.

198.102 Repudilation of contracts.

198.108 Maintenance of accurate records.

198.104 Disputes.

198.105 Coercion in sales.

AvTHORITY: The provisions of this Part 198
issued under secs. 6, 5, 38 Stat. 721, 719; 15
U.S.C. 46, 45, unless otherwise noted.

Source: The provisions of this Part 198
appear at 16 F.R. 2676, Mar. 27, 1951, unless
otherwise noted.

§ 198.0 Definition; industry products.

As used in these rules the term “indus-
try products’ shall be understood as em-
bracing all kinds and types of milk bottle
caps, and hoods or closures, whether
made of paper, paperboard, cellophane,
aluminum, aluminum foil, tin plate, or
other materlal, or any combination
thereof.

Group I

§ 198.1 Misrepreseutation (general).

It is an unfair trade practice to use, or
cause or promote the use of, any adver-

148


$198.2

tising by radio, newspapers, magazines,
or other media, or any trade promotional
literature, label, brand, mark, or other
designation or representation (whether
in the form of a guarantee, warranty, or
otherwise), however disseminated or
published:

(a) Which has the capacity and tend-
ency or effect of misleading or deceiving
purchasers or prospective purchasers
with respect to the quality, grade, size,
capacity, properties, durability, service-
ability, Hfe, conformity with sanitary

regulations, or performance of any prod--

uct of the industry, or with respect to
the construction, constituent materials,
manufacture, distribution, or terms or
conditions of sale, of such product; or

(b) Which is false, misleading, or de-
ceptive in any other respect.

§ 198.2 Misrepresentation as to charac-
ter of business.

It is an unfair trade practice for any
concern, in the course of, or in connec-
tion with, the distribution of industry
products, to represent, directly or indi-
rectly, that it is a manufacturer of in-
dustry products, or that it owns or
controls a factory making such products,
when such js not the fact, or in any other
manner to misrepresent the character,
extent, or tyne of its business.

§ 198.3 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 tend-
ency or effect of misleading or deceiving
purchasers or prospective purchasers a3
to the character, name, nature, or origin
of any product of the industry, or any
material used therein, or which is false
or misleading in any other respect, is an
unfair trade practice.

§ 198.4 Misrepresentation as to install-
ment sales contracts, their terms,
conditions, etc.

It is an unfair trade practice to make
or publish, or cause to be made or pub-
lished, directly or indirectly, any false,
misleading, or deceptive statement or
representation, through advertising or
otherwise, concerning installment sales
contracts used or their terms and condi-
tions, including down payments, interest,
carrying charges, etc., or respecting any
other matters relating to such contracts
or their terms and conditions.

Title 16— Commercial Practices

§ 198.5 Imitation of trade-marks, trade
names, ctc.

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 or prospective pur-
chasers, is an unfair trade practice.

§ 198.6 Uulawful coercion or combina-
tion in restraint of trade.

It is an unfair trade practice for a
member of the industry:

(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, 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.

§ 198.7 Defamation of competitors o1
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 competitors’ products in
any respect, or of their business methods,
selling prices, values, credit terms, poli-
cies, or services, is an unfair trade prac-
tice.

§ 198.8 Substitution of products.

The practice of shipping or delivering
industry products which do not conform
to samples submitted, to specifications
upon which the sale is consummated, or
to representations made prior to securing
the order, without the consent of the pur-
chasers to such substitution, and with
the capacity and tendency or effect of
misleading or deceiving purchasers or
prospective purchasers, is an unfair trade
practice.

§ 198.9 False invoicing.

It is an unfair trade practice to with-
hold from or insert in invoices any state-
ments or information by reason of which
omission or insertion a false record is
made, wholly or in part of the transac~
tions represented on the face of such in-
voice, with the capacity and tendency or

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Chapter I[—Federal

effect of thereby misleading or deceiving
purchasers or prospective purchasers.

§ 198.10 Inducing breach of contract.

It is an unfair trade practice to induce
or attempt to induce the breach of ex-
isting lawful contracts between com-
petitors and their customers, or their
suppliers 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 un-
duly hampering, injuring, or prejudicing
competitors in their business.

§ 198.11 Commercial bribery.

It is an unfair trade practice for a
member of the industry, directly or in-
directly, to give, or offer to give, or per-
mit or cause to be given, money or any-
thing of value to agents, employees, or
representatives of customers or prospec-
tive customers, or to agents, employees,
or representatives of competitors’ cus-
tomers or prospective customers, without
the knowledge of their employers or prin-
cipals, as an inducement to influence
their employers or principals to purchase,
or contract to purchase, products manu-
factured 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 con-
tracting to deal with competitors.

§ 198.12 Enticing 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.

§ 198.13 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 infor-
mation concerning the business of a
competitor by bribery of an employee or
agent of such competitor, by false or
misleading statements or representa-
tions, by the impersonation of one in
authority, or by any other unfair means,
and to use the information so obtained

Trade Commission $198.17

in such manner as to injure said competi-
tor in his business or to suppress compe-
tition or unreasonably restrain trade.

§ 198.14 Unfair threats of infringement
suits.

The circulation of threats of suit for
infringement of patents or trade-marks
among customers or prospective custom-
ers of competitors, not made in good
faith but for the purpose or with the
effect of thereby harassing or intim-
idating such customers or prospective
customers, or of unduly hampering, in-
juring, or prejudicing competitors in
their business, is an unfair trade practice.

§ 198.15 Unlawful interference.

It is an unfair trade practice for any
member of the industry, by means of any
monopolistic practices, or through com-
bination, conspiracy, coercion, boycott,
threats, or any other unlawful means,
directly or indirectly, to interfere with a
competitor’s right to purchase his mate-
rials and supplies from whomsoever he
chooses, or to sell to whomsoever he
chooses.

§ 198.16 Selling below cost.

The practice of selling industry prod-
ucts at a price less than the cost thereof
to the seller, with the purpose or intent,
and where the effect may be, to injure,
suppress, or stifle competition or tend to
create a monopoly in the production or
sale of such products, is an unfair trade
practice. As used in this section, the
term “cost” means the total cost to the
seller, including the costs of acquisition,
processing, preparation for marketing,
sale, and delivery.

§ 198.17 Prohihited discrimination.’

(a) Prohibited discriminatory prices,
or rebates, refunds, discounts, credits,
etc., which effect unlawful price discrimt-
nation. It is an unfair trade practice for
any member of the industry engaged in
commerce, in the course of such com-

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 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 District
of Columbia or any foreign nation, or within
the District of Columbia or any Territory
or any insular possession or other place
under the jurisdiction of the United States.”

145


$198.17

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,
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
kmowingly receives the benefits 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, con-
sumption, or resale within any place un-
der the jurisdiction of the United States;

(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 com~
modities are to such purchasers sold or
delivered;

(3) That nothing contained in this
paragraph 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
paragraph shall 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,
distress sales under court process, or sales
in good faith in discontinuance of busi-
ness in the goods concerned.

(b) Prohibited brokerage and com-
missions. It is an unfair trade practice
for any member of the industry engaged
in commerce, in the course of such com-
merce, to pay or grant, or to receive or
accept, anything of value as a commis-
sion, brokerage, or other compensation,
or any allowance or discount in Meu
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-

Title 16—Commercial Practices

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 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 in connection with the process-
ing, handling, sale, or offering for sale of
any products or commodities manufac-
tured, sold, or offered for sale by such
member, unless such payment or 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 1s an unfatr trade prac-
tice for any member of the industry en-
gaged in commerce to discriminate in
favor of one purchaser against another
purchaser or purchasers of a commodity
bought for resale, with or without proc-
essing, by contracting to furiish or fur-
nishing, or by contributing to the
furnishing of, any services or facilities
connected with the processing, handling,
sale, or offering for sale of such commod-
ity so purchased upon terms not accorded
to all competing 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 fore-
going provisions of this section.

(f) Exemptions. The inhibitions of
this section shall not apply to purchases
of their supplies for thelr own use by
schools, colleges, universities, public li-
braries, churches, hospitals, and charita-
ble institutions not operated for profit.

Nore: In complaint proceedings charging
discrimination in price or services or facili-
ties furnished, and upon proof having been
made of such discrimination, the burden of
rebutting the prima facie case thus made
by showing justification shall be upon the
person charged; and unless justification shall

be affirmatively shown, the Commission tis
authorized to issue an order terminating the
discrimination: Provided, however, That

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Chapter |l—Federal Trade Commission

nothing contained in this section shall pre-
vent a seller rebutting the prima facie case
thus made by showing that his lower price,
or the furnishing of services or facilities to
any purchaser or purchasers, was made in
good faith to meet an equaliy low price of
a competitor or the services or facilities fur-
nished by a competitor.

§ 198.18 Discriminatory returns.

It is an unfair trade practice for any
member of the industry engaged in com-
merce’ to discriminate in favor of one
customer-purchaser against another
customer-purchaser of industry prod-
ucts, bought from such member of the
industry for resale, by contracting to
furnish, or furnishing in connection
therewith, upon terms not accorded to
all competing customer-purchasers on
proportionally equal terms, the service
or facility whereby such favored pur-
chaser is accorded the privilege of re-
turning products so purchased and
receiving therefor credit or refund of
purchase price: Provided, however, That
nothing in any of the sections in this
part shall prohibit or be used to prevent
the return of merchandise by purchaser,
for credit or refund of purchase price,
when and because such merchandise has
been falsely or deceptively represented,
or when and because such merchandise
is defective in material, workmanship,
or in any other respect is contrary to
warranty or purchase contract.

Group It
§ 198.101 Price lists.

(a) The industry approves the practice
of each individual member of the indus-
try independently publishing and cir-
culating to the purchasing trade his own
price lists.

(b) The industry approves the practice
of making the terms of sale a part of all
published price schedules.

§ 198.102 Repudiation of contracts.

Lawful contracts are business obliga-
tions which should be performed in Jetter
and in spirit. The repudiation of con-
tracts by sellers on a rising market or by
buyers on a declining market, is con-
demned by the industry.

§ 198.103 Maintenauce of accurate rec-
ords.

It is the judgment of the industry
that each member should independ-

ently keep proper and accurate records
for determining his costs.

1 See footnote to § 198.17.

$ 198.105

§ 198.104 Disputes,

The industry approves the practice
of handling business disputes between
Members of the industry and their
customers in 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 differences.
If unable to do so they should, if possible,
submit these disputes to arbitration.
§ 198.105 Coercion in sales.

The use of buying power to force un-
economic or unjust terms of saie upon
sellers, and the use of selling power to
force uneconomic or unjust terms of
sale upon buyers, are condemned by the
industry.

PART 199—CANVAS COVER

INDUSTRY

Bec.

199.0 Definitions.

Grour I

199.1 Misrepresentation respecting ability
to resist fre and flame, water pas-
sage, and deterioration due to the
sun, weather, or mildew.

199.2 Disclosure as to sime of product and
kind and weight of fabric.

1993 Resort to harmful and excessive
stretching prohibited.

199.4 Misuse of term “custom-made” or
“custom-tallored.”

199.5 Use of terms “shrunk,” “preshrunk,”
etc.

199.6 Loading or adulterating industry
products.

199.7 Misrepresentation as to origin.

199.8 Deception as to being nsw.

199.9 Misrepresentation not specificaliy
prohibited above, .

199.10 Deceptive guarantees, warranties, atc.

199.11 Misrepresentation as to character of
business.

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

199.13 False invoicing.

199.14 Use of lottery sehomes,

199.15 Defamation of competitors or false
disparagement of their products.

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

199.17 Unfair threats of infringement suits.

199.18 Inducing breach of contract,

199.19 Commercial bribery.

199.20 Ooercing purchase of one product as
& prerequisite to purchase of other
products.

199.21 Gelling below cost.

199.22 Prohibited discrimination.

199.28 Discriminatory returns.

199.24 Aiding or ebetting use of unfair trade
practices.

147