Gladiolus Bulb Industry

16 CFR Part 206 / 205 · Trade practice rules · in the Code of Federal Regulations 1959-1977 (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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1977 CFR · Earliest edition: 1959 CFR

Decisions that mention this industry's rules (1)

Text (1977 edition, OCR)

Chapter [—Federal Trade Commission

and where the effect is, or where there is
a@ reasonable probability that the effect
will be, to substantially injure, suppress,
or stifle competition or to create a mo-
nopoly. Among the situations in which
the requisite purpose or intent would
ordinarily be lacking are cases in which
such sales were (a) of seasonal goods
near the conclusion of the season; (b) of
perishable goods in respect to which de-
terioration is imminent; (c) of obso-
lescent goods; (d) made under judicial
process; or (e) made in bona fide dis-
continuance of business in the goods
concerned.

(c) As used in paragraphs (a) and (b)
of this section, the term “cost” means
the respective seller’s cost and not an
average cost in the industry whether
such average cost be determined by an
industry cost survey or some other
method. It consists of the total outlay
or expenditure by the seller in the ac-
quisition, production, and distribution of
the products involved, and comprises all
elements of cost such as labor, material,
depreciation, taxes (except taxes on net
income and such other taxes as are not
properly applicable to cost), and general
overhead expenses, incurred by the seller
in the acquisition, manufacture, prooess-
ing, preparation for marketing, sale, and
delivery, of the products. Not to be in-
cluded are dividends or interest on
borrowed or invested capital, or nonop-
erating losses, such as fire losses and
losses from the sale or exchange of capt-
tal assets. Operating cost should not
be reduced by items of nonoperating in-
come, such as income from investments,
and gain on the sale of capital assets.

(dad) Nothing in this section shall be
construed as relieving an industry mem-
ber from compliance with any of the
requirements of the Robinson-Patman
Act.

§ 202.14 Prohibited forms of trade re-
straints (unlawful price fixing, etc.)*

It is an unfair trade practice for any
member of the industry, either directly

5The inhibitions of this section are sub-
ject to Pubiic Law 642, approved July 14,
1952, 66 Stat. 682 (the McGuire Act) which
provides that with respect to a commodity
which bears, or the label or contalner of
which bears, the trade-mark, brand, or name
of the producer or distributor of such com-
modity and which is in free and open com-
petition with commodities of the same
general class produced or distributed by

90-059--77——12

§ 209.14

or indirectly, to engage in any planned
common course of action, or to enter
into or take part in any understanding,
agreement, combination or conspiracy,
with one or more members of the indus-
try, or with any other person or persons,
to fix or maintain the price of any goods
or otherwise unlawfully to restrain
trade; or to use any form of threat,
intimidation, or coercion to mduce any
member of the industry or other person
or persons to engage in any such
planned common course of action, or to
become a party to any such understand-
ing, agreement, combination, or con-
spiracy.

PART 205—-UPHOLSTERY AND
DRAPERY FABRICS INDUSTRY

Group I

Sec.

205.1 Misrepresentation (general).

205.2 Misbranding.

205.3 False invoicing.

205.4 Deception as to origin.

205.5 Identification and disclosure of fiber
or material content.

205.6 Disclosure of presence of used fiber
or material.

205.7 Substitution of products.

205.8 Inducing breach of contract.

205.9 Commercial bribery.

205.10 Imitation of trade-marks, etc.

205.11 Defamation of competitors or false
disparagement of their products.

205.12 Fictitious price Lists.

205.13 Use of lottery schemes.

205.14 Misrepresentation as to character of
business.

205.15 Prohibited discrimination.

205.16 Aiding or abetting use of unfair
trade practices.

Group II

205.101 Repudiation of contracts.

205.102 Use of written sales contracts.

205.103 Use of samples.

205.104 Arbitration of disputes.

others, a seller of such a commodity may
enter into a contract or agreement with a
buyer thereof which establishes a minimum
or stipulated price at which such commodity
may be resold by such buyer when such
contract or agreement is lawful as applied
to intrastate transactions under the iaws of
the State, Territory, or territorial furisdic-
tion in which the resale is to be made or to
which the commodity is to be transported
for such resale, and when such contract or
agreement Is not between manufacturers, or
between wholesalers, or between brokers, or
between factors, or between retailers, or be-
tween persons, firms, or corporations in
competition with each other.

167


§ 205.1

AvurHoriry: The provisions of this Part 205
issued under secs. 6, 5, 38 Stat. 721, 719; 15
U.S.C. 46, 45, unless otherwise noted.

Source: The provisions of this Part 205 ap-
pear at 17 F.R. 416, Jan. 15, 1952, unless
otherwise noted.

Group I

§ 205.1 Misrepresentation (general).

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, by way of advertisement
or otherwise, with respect to the grade,
quality, freedoin from defects or im-
perfections, quantity, use, size, material
content, thread count, origin, shrinkage
properties, proof against or resistance to
wrinkling, creasing or crushing, color~
fastness, washability, resistance to or
immunity from moth, fire or flame
damage, production, manufacture, or
distribution of any upholstery or drap-
ery fabrics, or to misrepresent any up-
holstery or drapery fabric in any other
material respect.

§ 205.2 Misbranding.

The labeling, marking, or branding of
upholstery and drapery fabrics in any
manner which is false, misleading, or
deceptive in respect to the grade, quality,
freedom from defects or imperfections,
quantity, use, size, material content,
thread count, origin, shrinkage, prop-
erties, proof against or resistance to
wrinkling, creasing or crushing, color-
fastness, washability, resistance to or
immunity from moth, fire or fiame dam-
age, production, manufacture, or distri-
bution of such products, or in any other
material respect is, an unfair trade
practice.

§ 205.3 False invoicing.

Withholding from or inserting in in-
voices any statement 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, with the capacity
and tendency or effect of thereby mis-
leading or deceiving purchasers, pro-
spective purchasers. or the consuming
public, is an unfair trade practice.

§ 205.4 Deception as to origin.

With respect to any upholstery and
drapery fabrics of the following types:

Title 16—Commerciai Practices

Fabrics which have been woven or fabri-
cated in a foreign country and imported
in the grey or other unfinished state and
dyed or finished in the United States; and
fabrics which have been imported in the
finished state and dyed, redyed, or re-
finished in the United States: it is an
unfair trade practice:

(a) To offer for sale, sell, or distribute
any such fabrics under marks, stamps,
brands, labels, or representations which
have the capacity and tendency or effect
of misleading or deceiving purchasers,
prospective purchasers, or the consum-
ing public into the belief (1) that suct.
fabrics were woven or fabricated in the
United States, when such is not the fact;
or (2) that they were dyed, finished,
redyed, or refinished elsewhere than in
the United States, when such is not true;
or

(b) To offer for sale, sell, or distribute
any such fabries without the same being
marked, stamped, branded, or labeled so
as to indicate clearly and nondeceptively
(1) the country of origin of the fabrics,
and (2) that such fabrics were woven or
fabricated in said country and were dyed
or finished or redyed or refinished in the
United States, as the case may be, where
the failure, refusal, or omission to so
mark, stamp, brand, or label such fabrics
has the capacity and tendency or effect
of thereby promoting, abetting, or ef-
fectuating the marketing of such prod-~
ucts under conditions which are mislead-
ing or deceptive to purchasers, prospec-
tive purchasers, or the consuming public.

Nore: Nothing in this section shall be con-
strued as relieving any member of the in-
dustry or other party of the necessity of
complying with requirements of the customs
laws or regulations, or other applicable pro-
visions of law or regulations, relating to the
marking of imported articles.

§ 205.5 Identification and disclosure of
fiber or material content.

(a) In the sale, offering for sale, or
distribution of uphoistery and drapery
fabrics, it is an unfair trade practice to
misrepresent or deceptively conceal the
identity of the fiber or material content
of any such product.

(b) All upholstery or drapery fabrics
which are composed wholly or in part of
rayon, acetate, silk, or linen shall be
identified as to their fiber content in
accordance with the requirements of the
trade practice rules heretofore promul-
gated by the Commission for the rayon

168


Chapter |—Federal Trade Commission

and acetate textile Industry, the silk ine
dustry, and the linen industry,’ except
that, due to the provisions of section 14
of the Wool Products Labeling Act of
1939, labeling identification of any wool,
reprocessed wool, or reused wool’ con-
tained in any such fabrics is not to be
considered as required. In the case of
upholstery and drapery fabrics which
contain a kind of fiber or fibers required
to be identified by label under said trade
practice rules, and which also contain
fibers of wool, reprocessed wool, or reused
wool,’ the label identification of the fiber
content thereof shali be made in a mane
ner which does not have the capacity and
tendency or effect of deceiving purchas-
ers or prospective purchasers as to the
proportion of the identified fiber or fibers
contained in such products. Examples
of proper fiber identification by label in
the case of an upholstery or drapery
fabric composed of 60 percent rayon
fibers and 40 percent wool" fibers are as
follows:
“CONTAINS RaYON”
or
“60% RaYon”
or
“RaYON aND WOOL"
or
“60% RAYON awn 40% Woo.”

Nore A: When an upholstery or drapery
fabric containing wooi, reprocessed wool, or
reused wool? is sold, offered for sale, or dis-

1A copy of the above-mentloned trade
practice rules may be obtained by any in-
dustry member making request therefor to
the Commisston.

2 As here used, the meanings of the terms
“wool,” “reprocessed wool,” and “reused
wooi,” are to be understood as according
with those set forth for such terms in sub-
sections (b), (c) and (d) of sectlon 2 of
the Wool Products Labeling Act of 1939,
said subsectlons (b), (c), and (d) reading
as follows:

(b) The term “wool” means the fiber
from the fleece of the sheep or lamb or hair
of the Angora or Cashmere goat (and may
fnclude the so-called spectalty fibers from
the hair of the camei, alpaca, llama, and vi-
cuns) which has never been reclaimed from
any woven or felted wool product.

(c) The term “reprocessed wool” means
the resulting fiber when wool has been
woven or felted Into a wooi product which,
without ever having been utilized in any
way by the ultimate consumer, subsequently
has been made Into a fibrous state.

(ad) The term “reused wool” means the
resulting fiber when wool or reprocessed
wool has been spun, woven, knitted, or felted

§ 205.8

tributed by an industry member with knowl-
edge of facts indicating its probable use in
& product or products other than upholsteries
or draperies, such fabric shall be labeled as
to its fiber content in accordance with the
requirements of the Wool Products Labeling
Act of 1939.

Nore B: Nothing in this section is in-
tended to limit or restrict the requirements
of § 205.6 relating to disclosure of the fact
that an upholstery or drapery fabric is com-
posed of used materlal, whether such used
materlal be used wool fiber or other used
material,

§ 205.6 Disclosure of presence of used
fiber or material.

It is an unfair trade practice to fail or
to refuse to make full and nondeceptive
disclosure of the fact that any upholstery
or drapery fabric offered for sale or sold
or distributed is composed of used fiber
or material, in whole or in part, where
such failure or refusal to disclose has the
capacity and tendency or effect of mis-
leading or deceiving purchasers or
prospective purchasers.

§ 205.7 Substitution of products.

The practice of shipping or dellvering
products which do not conform to
samples submitted, to specifications upon
which the sale is consummated, or to rep-
resentations made prior to securing the
order, without the consent of the pur-
chasers to such substitutions and with
the capacity and tendency or effect of
misleading or deceiving purchasers, pro-
spective purchasers, or the consuming
public, is an unfair trade practice.

§ 205.8 Inducing breach of contract.
Knowingly inducing or attempting to
induce the breach of existing lawful con-
tracts between competitors and their
customers or their suppliers, or interfer.
ing with or obstructing the performance
of any such contractual duties or servy-
ices, under any circumstance having the
capacity and tendency or effect of sub-
stantially injuring or lessening present
or potential competition, 1s an unfair
trade practice. Nothing in this section
is intended to imply that it ts improper
for any industry member to solicit the
business of a customer of a competing
industry member; nor is the rule to be
construed as in anywise authorizing any
agreement, understanding, or common

Into a wool product which, after having
been used In any way by the ultimate con-
sumer, subsequently has been made Into a
fibrous state.

169


§ 205.9

course of action by two or more industry
members to not solicit business from the
customers of either of them, or from cus-
tomers of any other industry member.

§ 205.9 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
permit or cause to be given, money or
anything of value to agents, employees,
or representatives of customers or
prospective customers, or to agents,
employees, or representatives of com-
petitors’ customers or prospective cus-
tomers, without the knowledge of
their employers or principals, as an in-
ducement to infiuence their employers or
principals to purcliase or contract to pur-
chase 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.

§ 205.10 Imitation of trade-marks, ete,

The practice of imitating, or caus-
ing to be imitated, or directly or in-
directly promoting or aiding the imita-
tion of, the trade-marks, trade names,
other exclusively owned symbols or marks
of identification of competitors, or the
exclusively owned designs or patterns of
competitors which have not been directly,
or by operation of law, dedicated to the
public, where such imitation has the
capacity and tendency or effect of mis-
leading or deceiving purchasers, pro-
spective purchasers, or the consuming
public, is an unfair trade practice.

§ 205.11 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 dispar-
agement of the grade, quality, or manu-
facture of the products of competltcrs, or
of their business methods, selling prices,
values, credit terms, policies, services, or
conditions of employment, is an unfair
trade practice.

§ 205.12 Fictitious price lists.

The publishing or circulating by any
member of the industry of false, or mis-
leading price quotations, price lists,

Title 16—Commercial Practices

terms or conditions of sale, or reports as
to production or sales, with the capacity
and tendency or effect of misleading or
deceiving purchasers, prospective pur-
chasers, or the consuming public, is an
unfair trade practice.

§ 205.13 Use of lottery schemes.

The offering or giving of prizes, premi-
ums, or gifts in connection with the sale
of industry products, or as an induce-
ment thereto, by any method which in-
volves lottery or scheme of chance, is an
unfair trade practice.

§ 205.14 Misrepresentation as to charac-
ter of business.

It is an unfair trade practice for
any member of the industry to rep-
resent, directly or indirectly, through
use of the word “mill” or “mills,” or
the word “manufacturer,” or any other
word, term, or representation of similar
import or meaning, in his corporate or
trade name, or otherwise, that he is a
manufacturer of upholstery and drapery
fabrics, or that he is the owner or opera-
tor of a mill, factory, or producing com-
pany manufacturing uplolstery and
drapery fabrics, when such is not the
fact, or in any other manner to misrep-
resent the character, extent, or type of
his business.

§ 205.15 Prohibited discrimination.’

(a) Prohibited discriminatory prices,
or discounts, rebates, refunds, 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 dis-
count, rebate, refund, credit, freight or
other transportation cost or any per-
centage thereof, or other form of price
differential, where such discount, rebate,
refund, credit, freight or other trans-

*As used throughout § 205.15, 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, oF
between any insular possessions or other
places under the jurisdiction of the United
States, or between any such possession oF
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 Jjuris-
diction of the United States.”

170


Chapter |--Federal Trade Commission

portation cost or any percentage thereof,
or other form of price differential, effects
a discrimination in price between differ-
ent purchasers of goods of like grade
and quality, where either or any of the
purchases involved therein are in com-
merce, 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 pre-
vent competition with any person who
either grants or knowingly receives the
benefit of such discrimination, or with
customers of either of them: Provided,
however:

(1) That the goods involved in any
such transaction are sold for use, con-
sumption, or resale within any place
under the jurisdiction of the United
States;

(2) That nothing contalned 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;

(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 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 and com-
missions. It ls an unfair trade practice
for any member of the industry engaged
in commerce, in the course of such
commerce, to pay or grant, or to receive
or accept, anything of value as a com-
mission, brokerage, or other compensa-
tien, 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
intermediary therein, where such inter-
mediary is acting in fact for or in behalf,
or is subject to the direct or indirect

§ 205.15

control, of any party to such transaction
other than the person by whom such
compensation is so granted or paid.

(c) Prohibited advertising or promo-
tional allowances, etc. It is an unfair
trade practice for any member of the
industry engaged in commerce to pay
or contract for the payment of advertis-
ing or promotional allowances or any
other thing of value to or for the benefit
of a customer of such member in the
course of such commerce as compensa-
tion or in consideration for any services
or facillties furnished by or through such
customer in connection with the proc-
essing, handling, sale, or offering for
sale of any products or commodities
manufactured, sold, or offered for sale
by such member, unless such payment
or consideration is available on propor-
tionally equal terms to all other cus-
tomers competing in the distribution of
such products or commodities.

(d) Prohibited diseriminatory services
or facilities. It is an unfair trade prac-
tice for any member of the industry
engaged in commerce’ to discriminate
in favor of one purchaser against an-
other purchaser or purchasers of a com-
modity bought for resale, with or with-
out processing, by contracting to fur-
nish or furnishing, or by contributing
to the furnishing of, any services or
facilitles connected with the processing,
handling, sale, or offering for sale of
such commodity so purchased upon
terms not accorded to all competing pur-
chasers on proportionally 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 prohiblted by the fore-
going provisions of this section.

(f) Prohibited discriminatory return
and exchange privileges. It 1s an unfair
trade practice for any member of the
industry to grant or contract to grant
privileges of merchandise return, refund,
exchange, or other special privileges,
upon terms which, under the provisions
of this section, effect any unlawful dis-
crimination in price, services or facili-
ties in favor of one purchaser against
another purchaser or purchasers.

(g) Exemptions. The inhibitlons of
this section shall not apply to purchases
of their supplles for their own use by
schools, colleges, universities, public li-

§ See footnote on p. 170.

171


§ 205.16

braries, churches, hospitals, and chari-
table 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 sucb discrimination, the burden
of rebutting the prima facile case thus made
by showing justification shall be upon the
person charged; and unless justification
shall be affirmatively shown, the Commis-
sion is authorized to issue an order termi-
nating the discrimination: Provided, how-
ever, That nothing contained in this section
shall prevent 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 equally
low price of a competitor, or the services
or facilities furnished by a competitor (see
section 2 (b) Clayton Act).

§ 205.16 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
indirectly, to use or promote the use of
any unfair trade practice specified in
§§ 205.1 to 205.16.

Group I
§ 205.101 Repudiation of contracts.

Lawful contracts are business obliga-
tions which should be performed in letter
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.

§ 205.102 Use of written sales coutracts.

(a) In order to avoid ambiguity and
misunderstanding between buyers and
sellers, all purchases and sales of prod-
ucts of the industry exceeding one piece,
regardless of the total value thereof,
should be made by written contract,
slgned by the buyer and seller. Such
written contract should set forth the
actual terms and conditions of the sale
involved.

(b) Wherever practicable, the delivery
of all merchandise of any quantity
should be made against a written receipt
signed by the purchaser, or a qualified
agent or employee of the purchaser.

(ec) The provisions in this section shall
not be construed as sanctioning or ap-
proving any agreement among competi-
tors or any planned common course of
action among competitors to agree upon
or to fix, specify, or determine the prices,
discounts, terms, or conditions of sale to

Title 16—Commerclal Practices

be covered in any sales contract or trans-
action, but these shall be open to indi-
vidual negotiation between the seller and
buyer, subject to the requirements of
§§ 205.1 to 205.16 and applicable provi-
sions of law.

§ 205.103 Use of samples.

(a) The industry disapproves the giv-
ing of samples without charge in greater
quantity than is actually necessary to
acquaint purchasers or prospective pur-
chasers with the grade or quality of the
product offered for sale. However, the
furnishing of any samples shall not be
carried out in a manner involving dis-
crimination prohibited by the provisions
of § 205.15.

(ob) The industry interpretation of
“actually necessary” quantities as above
is: “A reference sample of each item not
exceeding one 27’’ x 27’’ square or one
full repeat of pattern, with one color line
not to exceed 6’’ x 9’’.”

§ 205.104 Arbitration of disputes.

The industry approves and recom-
mends the use of commercial arbitration
for the speedy and efficient disposition of
disputes arising out of the sale, process-
ing, and distribution of the industry’s
fabrics.

PART 206—GLADIOLUS BULB

INDUSTRY
Sec.
206.0 Definition.
Group I

206.1 Misrepresentation (general).

206.2 Deception as to size.

206.3 Deception as to blooming of flower-

206.4 Deceptive guarantees.

206.5 “Bulblets” not to be designated aa
“bulbs.”

206.6 Misrepresenting products as com-
forming to standard.

206.7 Deceptive use of trade or corporate
names, trade-marks, etc.

206.8 Deceptive pricing.

206.9 Selling below cost.

206.10 Use of lottery schemes.

206.11 Substitution of products,

206.12 Misrepresentation as to character of
business.

206.18 Defamation of competitors or false
disparagement of thelr products.

206.14 Tie-in sales; coercing purchase of
one product as a prerequisite to
the purchase of other products,

206.15 Exclusive deals.

206.16 Prohibited discrimination.

206.17 Aiding or abetting use of unfair

trade practices.

172