Corset, Brassiere, And Allied Products Industry

16 CFR Part 21 · 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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

Text (1977 edition, OCR)

$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.”

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Chapter I——Federal Trade Commission

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 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 dif-
fering methods or quantities in which
such commodities are to such purchasers
sold or delivered;

(3) That nothing contained in this
section shall prevent persons engaged in
selling goods, wares, or merchandise in
commerce from selectmg their own cus-
tomers 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;

(bo) 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 ifeu
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
control, of any party to such transac-
tion 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

2

§ 21.1

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 proc-
essing, handling, sale, or offering for sale
of any products or commodities manu-
factured, sold, or offered for sale by such
member, unless such payment or con-
sideration is available on proportionally
equal terms to all other customers com-
peting in the distribution of such prod-
ucts or commodities.

Note 1: Industry members giving advertis-
ing allowances to competing customers must
exercise precaution and diligence in seeing
that all of such allowances are used in accord-
ance with the terms of thetr offers.

Notre 2: When an industry member gives
allowances to competing customers for adver-
tising in @ newspaper or periodical, the fact
that a lower advertising rate for equivalent
space is available to one or more, but not all,
such customers, is not to be regarded by the
industry member as warranting the reten-
tion by such customer or crstomers of any
portion of the allowance for his or their per-
sonal use or benefit.

(d) Prohibited discriminatory services |
or facilities. It is an unfair trade practice
for any member of the industry engaged
in commerce to discriminate in favor of
one purchaser against another purchaser
or purchasers of a commodity bought for
resale, with or without processing, by
contracting to furnish or furnishing, or
by contributing to the furnishing of, any
services or facilities connected with the
processing, handling, sale, or offering for
sale of such commodity so purchased
upon terms not accorded to all competing
purchasers on proportionally equal terms.

(e) Inducing or receiving an illegal dis-
crimination 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 foregoing 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 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 such discrimination and resulting
competitive injury, the burden of rebutting

1


§ 21.2

the prima facie case thus made by showing
justification shall be upon the person
charged; and unless justification shall be
sfirmatively shown, the Commission ts au-
thorized to issue an order terminating the
discrimination: Provided, however, That
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
@ny purchaser or purchasers was made in
good faith to meet an equally low price of
® competitor, or the services or facilities fur-
nished by a competitor. See section 2(b),
Clayton Act,

§ 21.2 Misrepresentation in general.

It is an unfair trade practice to use, or
cause or promote the use of, any false,
untrue, or deceptive statement, represen-
tation, guarantee, warranty, testimonial,
or endorsement, by way of advertising
(through newspapers, magazines, circu-
lars, booklets, or by radio, television, or
any other medium), oral representation
or otherwise, which has the capacity and
tendency or effect of misleading or de-
ceiving purchasers, prospective purchas-
ers, or the consuming public with respect
to the efficacy, curative or healthful prop-
erties, grade, quality, substance, weight,
durability, serviceability, character, or
manufacture of any product of the indus-
try, or concerning the purported approval
or endorsement of such product by State,
Federal, medical, or other authority.

§ 21.3 Misrepresentation as to weight-
reduemg properties.

It ts an unfair trade practice, in con-
nection with the distribution, sale, or
offering for sale of an industry product,
to use, or cause or promote the use of,
any statement, directly or indirectly, oral
or otherwise. which represents or implies
that an industry product has weight-
reducing properties, when such ts not the
fact.

§ 21.4 [Reserved]
§ 21.5 Deception as to foreign origin.

(a) It is an unfair trade practice
falsely to represent, directly or by impli-
cation, through any means or device, the
origin of any industry product or com-
ponent part.

(b) It is also an unfair trade practice
to fail to disclose, adequately and con-
spicuously, the foreign origin of any in-
dustry product or component thereof,
where the failure to make such disclosure
has the capacity and tendency or effect
of deceiving purchasers or prospective
purchasers.

Title 16—-Commercial Practices

§ 21.6 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 or quality of the
goods of competitors, their credit terms,
values, policies, services, the nature or
form of the business conducted, or in any
other material respect, is an unfair trade
practice.

§ 21.7 Commercial bribery.

It ts 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 pro-
spective customers, or to agents, em-
Ployees, or representatives of competi-
tors’ customers or prospective customers,
without the knowledge of their employers
or principals, as an inducement to in-
fluence their employers or principals to
purchase or contract to purchase prod-
ucts manufactured or sold by such in-
dustry member or the maker of such gift
of 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.

§ 21.8 Inducing breach of contract.

(a) Knowingly inducing or attempting
to induce the breach of existing lawful
contracts between competitors and their
customers or their suppliers, or inter-
fering with or obstructing the perform-
ance of any such contractual duties or
services, under any circumstances having
the capacity and tendency or effect of
substantially injuring or lessening pres-
ent or potential competition, is an un-
fair trade practice.

(b) Nothing in this section ts intended
to imply that it is improper for any in-
dustry member to solicit the business of
a customer of a competing industry
member; nor ts the section to be con-
strued as in anywise authorizing any
agreement, understanding, or planned
common course of action by two or more
industry members not to solicit business
from the customers of either of them,
or from customers of any other industry
member,

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Chapter I-~—-Federal Trade Commission

$21.9 Prohibited forms of trade re-
straints (unlawful price, price fix-
ing, etc. )*

It is an unfair trade practice for any
member of the industry, either directly
or indirectiy, 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 in-
dustry, or with any other person or per-
sons, to fix or maintain the price of any
goods or otherwise unlawfully to re-
strain trade; or to use any form of threat,
intimidation, or coercion to induce 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 understanding, agree~
ment, combination, or conspiracy.

§ 21.10 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 condi-
tion, 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 saie, or of such condition, agreement,
or understanding, may be substantially
te lessen competition or tend to create
‘& monopoly in any line of commerce.

3The inhibitions of this section are sub-
jJect to Public Law 542, approved July 14,
1952—66 Stat. 632 (the McGuire Act) which
provides that with respect to a commodity
‘which bears, or the label or container of
‘which bears, the trade-mark, brand, or name
modity and which 1s In free and open com-
‘of the producer or distributor of such com-
petition with commodities of the same gen-
-erai class produced or distributed by others,
a seller of such a commodity may enter into
@ contract or agreement with a buyer there-
of which establishes a minimum or stipu-
lated 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 laws of the State,
Territory, or territorial Jurisdiction in which
the resale is to be made or to which the com-
modty is to be transported for such resale,
and when such contract or agreement 1s not.
between manufacturers, or between whole-
salers, or between brokers, or between fac-
tors, or between retaflers, or between per-
sons, firms, or corporaticns in competition.
with each other,

§ 21.12

§ 21.11 Guarantees, etc.

(a) It is an unfair trade practice to
use any guarantee respecting an industry
product which does not make reasonable
disclosure of the conditions or limitations
of such guarantee, or which contains
statements, representations, or asser~
tions which have the capacity and tend-
ency or effect of misleading or deceiving
in any respect, or which are of such
form, text, or character as to represent
or imply that the guarantee is broader
than is in fact true.

(b) It is an unfair trade practice for
the guarantor to fail to observe scru~
pulously his obligation under the guaran~
tee by him used or caused to be used.

(c) This section shall be applicable
also to warranties or any writing pur-
ported to be a guarantee or warranty.

§ 21.12 Push money.

It is an unfair trade practice for any
industry member to pay or contract to
pay anything of value to a salesperson
employed by a customer of the industry
member as compensation for, or as an
inducement to obtain, speclal or greater
effort or service on the part of the sales-
person in promoting the resale of prod-
ucts supplied by the industry member to
the customer.

(a) When the agreement or under-
standing under which the payment or
payments are made or are to be made is
without the knowledge and consent of
the salesperson’s employers; or

(b) When the terms and conditions of
the agreement or understanding are such
that any benefit to the salesperson or
customer is dependent on lottery or
chance; or

(c) When any provision of the agree-
ment or understanding requires or con-
templates practices or a course of con-
duct unduly and intentionally hamper-
ing sales of products of competitors of
an industry member; or

(d) When, because of the terms and
conditions of the agreement or under-
standing, including its duration, or the
attendant circumstances, the effect may
be to substantially lessen competition or
tend to create a monopoly; or

(e) When similar payments are not
accorded to salespersons of competing
customers on proportionally equal terms
in compliance wlth section 2 (d) and (e)
of the Clayton Act.

Note: Payments made by an industry
member to a salesperson or a customer un-
der any agreement or understanding that

273


§ 21.13

ell or any part of such payments is to be
transferred by the salesperson to the cus-
tomer, or is to result in a corresponding de-
crease in the salesperson’s salary, are not to
be considered within the purview of this sec-
tion, but are to be considered as subject to
the requirements and provisions of section
2(a) of the Clayton Act.

§ 21.13 Discriminatory returns.

It is an unfair trade practice for any
member of the industry to discriminate in
favor of one customer-purchaser against
another customer-purchaser of industry
products, bought from such member of
the industry for resale, by contracting te
furnish, or furnishing in connection
therewith, upon terms not accorded to
all customer-purchasers on proportion-
ally equal terms, the service or facility
whereby such favored customer is ac-
corded the privilege of returning indus-
try products so purchased and receiving
therefor credit or refund of purchase
price: Provided, however, That nothing
in the rules in this part shall prohibit or
be used to prevent the return of mer-
chandise by purchaser for credit or re-
fund of purchase price, when and
because such merchandise has not been
properly labeled by the seller in accord-
ance with these rules or has been other-
wise falsely or deceptively labeled or
represented, or when and because such
merchandise is defective in material,
workmanship, or in any other respect is
contrary to warranty or purchase con-
tract: ‘ And provided, further, That
nothing in this section shall prohibit a
purchaser from exchanging the current
season’s merchandise for different sizes
of the same style number in order to
balance purchaser’s stock. (Nothing tn
this section is intended to modify or af-
fect any of the requirements of § 21.1,
entitled “Prohibited Discrimination.”

§ 21.14 Consignment distribution.

(a) It is an unfair trade practice for
any member of the industry to employ
the practice of shipping goods on con-
signment, pretended consignment, or for
delivery “on memorandum”:

(1) When such practice Is so used, or
the terms and conditions thereof so
varied or arranged, as to effectuate a dis-

4It is the consensus of the industry that
where a purchaser 1s entitled to return goods
for any of the reasons hereinabove set forth,
such return shall be made within fifteen
(15) days after receipt of the goods.

Title 16—Commercial Practices

crimination contrary to the provisions of
$21.1; or

(2) When such consignment, pre-
tended consignment, or delivery “on
memorandum,” is used for the purpose
and with the effect of artificially clogging
trade outlets and unduly restricting
competitors’ use of said outlets in getting
their products to purchasers or consum-
ers through regular channels of distribu~
tion, and thereby injuring, destroying,
or preventing competition, tending to
create & monopoly, or unreasonably re-
straining trade.

(b) Nothing in this section shall be
construed as restricting or preventing
consignment shipping, or marketing “on
memorandum,” when carried out in good
faith and without illegal discrimination,
suppression of competition, or undue
interference with competitors’ use of the
usual channels of distribution.

§ 21.15 Seconds, irregulars, or rejects.

(a) Industry products which are “‘sec-
onds,” “irregulars,” or “rejects,” or
which are represented as being “sec-
onds,” “irregulars,” or “rejects,” shall
be so marked, clearly and conspicuously,
to the end that confusion, misunder-
standing, or deception of the purchasing
or consuming public may be avoided and
prevented. “Seconds” may be marked
or referred to by the manufacturer as
“seconds,” “irregulars,” or “rejects”
provided that such marking or reference
clearly indicates that the product is not
of first quality. Such disclosure of
“seconds,” “irreguiars,” or ‘rejects’
shall also be made on invoices as well
as on the garment itself, and on the
immediate package, if any, in which it
is sold to the consumer, and on display
cards, advertisements, or other repre-
sentations under which such “seconds,”
“irregulars,” or “rejects” are offered for
sale or advertised to the purchasing or
consuming public.

(b) It is an unfair trade practice de-
ceptively to conceal the fact that said
industry products are “seconds,” “irreg-
ulars,” or “rejects,” or to fail or refuse
to make such disclosure to the end speci-
fied in paragraph (a) of this section.

§ 21.16 Fictitious prices, price lists, ete.

(a) The publishing or circulating by
any member of the industry of false
or misleading price quotations, price
lists, terms or conditions of sale, or re-

274


Chapter |—Federal Trade Commission

ports as to production or sales, with the
capacity and tendency or effect of mis-
leading or deceiving purchasers, pro-
spective purchasers, or the consuming
public, or the advertising, sale, or offer-
ing for sale of industry products at
prices purporting to be reduced from
what are in fact fictitious prices, or at
purported reductions in prices when
such purported reductions are in fact
fictitious or are otherwise misleading or
deceptive, is an unfair trade practice.

(b) It is an unfair trade practice, in
connection. with the sale, offering for
sale, or distribution of industry products
at prices that are in any manner repre-~
sented as reduced from or lower than
current, former, or regular prices, to use,
or to furnish or supply for such use, price
tags, labels, or advertising material that
set forth a false, fictitious, or exagger-~
ated current, former, or regular price, or
a false, fictitious, or exaggerated manu-
facturer’s or distributor’s suggested re-
tail selling price, or that contain what
purport to be bona fide price quotations
which are in fact higher than the prices
at which such products are regularly
and customarily sold in bona fide retail
transactions. It is likewise an unfair
trade practice to distribute, sell, or offer
for sale to the consuming public in such
manner products bearing such false,
fictitious, or exaggerated price tags or
labels.

§ 21.17 Misuse of terms “close-outs,”
“discontinued Lines,” “special bar-
gains,” etc.

It is an unfair trade practice to offer
for sale, sell, advertise, describe, or
otherwise represent, industry products
as “Close-outs,” “Discontinued Lines,” or
“Special Bargains,” by use of such terms
or by words or representations of similar
import, when such is not true in fact; or
to so offer for sale, sell, advertise, de-
scribe, or otherwise represent industry
products where the capacity and tend-
ency or effect thereof is to lead the pur-
chasing or consuming public to believe
such products are being offered for sale
or sold at greatly reduced prices, or at
so-called “bargain” prices, when such is
not the fact.

§ 21.18 Aiding or abetting use of un-
fair trade practices.
Tt is an unfair trade practice for any

person, firm, or corporation to aid, abet,
coerce, or induce another, directly, or

§ 22.0
indirectly, to use or promote the use of

any unfair trade practice specified in
these rules.

PART 22—FROZEN FOOD INDUSTRY

Sec.

22.0 Definitions.

Group I

22.1 Prohibited discrimination.

22.2 Exclusive deals.

22.3 Prohibited sales below cost.

224 Push money.

22.5 Fictitious prices,

22.6 False Invoicing, billing, etc.

22.7 Coerclng the purchase of one product
as @& prerequisite to the purchase
of other products.

228 Misrepresentation in general,

22.9 Defamation of competitors or false
disparagement of thelr producte.

22.10 Enticing away employees of competil-
tors.

22.11 Substitution of products.

22.12 Inducing breach of contract.

22.13 Use of lottery schemes, etc.

22.14 Prohibited forms of trade restraints
(unlawful price fixing, ete.).

22.15 Use of the word “‘free”’.

22.16 Misrepresenting products as conform-
ing to standard.

22.17 Procurement of competitors’ confl-
dential information.

22.18 Alding or abetting use of unfair trade
practices.

Group II

22.101 Contractual obligations,
22.102 Proper refrigeration.

AUTHORITY: The provisions of this Part 22
issued under secs. 6, 6, 38 Stat. 721, 719; 16
U.S.C. 46, 45, unless otherwise noted.

Source: The provisions of this Part 22 ap-

pear at 21 F.R. 266, Jan, 18, 1956, unless
otherwise noted.

§ 22.0 Definitions.

(a) Products of this industry consist
of vegetables, frults, juices, fish and
shellfish. baked goods, and other mis-
cellaneous prepared foods, which are
packed, marketed, and delivered to the
ultimate consumer in a frozen state. Not
included as products of the industry
are meats and poultry, and frozen
dairy products including ice cream and
sherbets.

(b) The term “member of the indus-
try” means any person, firm, corporation,
or organization engaged in the produc-
tion and/or inarketing of products of the
industry.

275