Set-up Paper Box Industry

16 CFR Part 211 · Trade practice rules · in the Code of Federal Regulations 1959-1976 (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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1976 CFR · Earliest edition: 1959 CFR

Text (1976 edition, OCR)

§ 210.29

must exercise precaution and diligence in
seeing that all of such allowances are used
in accordance with the terms of their offers.

Nore 2: When an industry member gives
allowances to competing customers for ad-
vertising in a newspaper or periodical, the
fact that a lower advertising rate for equiv-
alent space is available to one or more, but
not all, such customers, is not to be regarded
by the industry member as warranting the
retention by such customer or customers of
any portion of the allowance for his or their
personal use or benefit.

(e) Prohibited discriminatory services
or facilities. It is an unfair 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 furnish or fur-
nishing, or by contributing to the fur-
nishing of, any services or facilities
including, but not limited to, displays,
exhibits, and promotional material con-
nected with the processing, handling,
sale, or offering for sale of such com-
modity so purchased upon terms not ac-
corded to all competing purchasers on
proportionally equal terms.

Nore: See subsection (b) of section 2 of
the Clayton Act es amended, which 1s set
forth in the note following paragraph (f)
of this section.

(f) 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.

Nove: Paragraph (f) of this section is a
restatement of section 2 (f) of the Clayton
Act as amended. In a complaint proceeding
under this section, In order to make out a
prima facie violation, the Commission must
show that the favored buyer induced or re-
celved the ijower price knowing, or knowing
facts from which he should have known,
thet such price was violative of section 2 (a)
of sald act and not justified under subpara-
graphs (2), (4), or (5) of paragraph (a) of
this section. When, in any such proceeding,
the issue is Hmited to the question of
whether the price differentiai involved made
only due aliowance for differences in cost of
manufacture, sale, or delivery resulting from
the differing methods or quantitles in which
the goods were sold and delivered, the Com-
mission may establish a prima facie case in
a number of ways, including:

(1) By showing that the buyer paying the
lower price Knew that the methods by, and
quantities in, which the goods were sold and

Title 16—Commercial Practices

delivered to him by the seller were the same
as in the case of the competing buyer or
buyers paying the higher price or prices; or

(2) By showing, when there is a difference
in the methods or quantities in which the
goods were sold and delivered by the seller to
the buyer than in the case of the competing
buyer or buyers paying the higher price or
prices, that the buyer paying the lower price
or prices knew the nature and extent of such
differences and Knew or should have known
that they could not have resulted in sufficient
cost savings of the kind and character speci-
fied as to justify the price differential.

Nore: Section 210.28 is based on the pro-
Visions of section 2 of the Clayton Act as
amended by the Robinson-Patman Act.

Subsection (b) of section 2 of the Clayton
Act as amended, which reads as follows, is
in amplification of the note to subparagraph
(5) of paragraph (a) of this section and of
the note to paragraph (e) of this section.
“Upon proof being made, at any hearing on
a compiaint under this section, that there
has been discrimination in price or services
or facilities furnished, the burden of rebut-
ting the prima facie case thus made by show-
ing justification shall be upon the person
charged with a violation of this section, and
unless justification shall be affirmatively
shown, the Commission is authorized to issue
an order terminating the discrimination:
Provided, however, That nothing herein con-
tained shall prevent a seller rebutting the
prima facle case thus made by showing that
his lower price or the furnishing of serv-
ices or facilities to any purchaser or pur-
chasers was made in good faith to meet an
equally low price of a competitor, or the
services or facilities furnished by a com-
petitor.”

§ 210.29 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 in-
directly, to use or promote the use of any
unfair trade practice specified in the
foregoing sections of this part.

COMMITTEE ON TRADE PRACTICES
§ 210.201 Industry committee.

The provisions of §16.1 of this sub-
chapter shall be applicable to an industry
committee established under this part.

PART 211—SET-UP PAPER BOX

INDUSTRY
Group I
Sec.
211.1 Misrepresentation and misbranding
of industry products.
211.2 Misrepresentation as to character of
business.
2113 Misrepresenting products as con-

forming to standard.

256


Chapter Il—Federal

Sec.

211.4 Bubstitution of products.

211.5 False and misleading price quota-
tions, etc.

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

211.7 Inducing breach of contract.

211.8 Defamation of competitors or false
disparagement of thelr products.

211.9 Enticing away employees of com-
petitors.

211.10 Commercial bribery.

211.11 Procurement of competitor’s confi-
dential information.

211.12. Combination or coercion to fix
prices, suppress competition, or
restrain trade.

211.18 Prohibited discrimination.

211.14 False invoicing.

211.15 Selling below cost.

211.16 Aiding or abetting use of unfair
trade practices.

Group II

211.101 Arbitration.

211.102 Price lists.

211.103 Maintenance of accurate records.

COMMITTEE ON TRADE PRACTICES
211.201 Industry committee.

AvuTHORITY: The provisions of this Part 211
issued under secs. 6, 5, 88 Stat. 721, 719; 15
U.S.O. 46, 45, unless otherwise noted.

Source: The provisions of this Part 211 ap-

pear at 17 F.R. 2834, Apr. 2, 1952, unlesa
otherwise noted.

Group I

§ 211.1 Misrepresentation and misbrand-
ing of industry products.

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,
label, or otherwise, concerning the grade,
quality, quantity, use, size, material, fin-
ish, strength, thickness, composition,
origin, preparation, manufacture, or dis-
tribution of any product of the industry,
or in any other material respect.

§ 211.2 Misrepresentation as to charac-
ter of business.

It is an unfair trade practice for any
industry member, in the course of or in
connection with the distribution of in-
dustry products, to represent, directly,
that he is a manufacturer of industry
products, or that he owns or controls a
factory making such products, when
such is not the fact, or in any other man-
ner to misrepresent the character, ex-
tent, or type of his business.

Trade Commission © § 911.7

§ 211.3 Misrepresenting products as con-
forming to standard.

Representing, through advertising or
otherwise, that any set-up paper box or
other industry product conforms to a
standard recognized in or applicable to
the industry when such is not the fact is
an unfair trade practice.

§ 211.4 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 rep-
resentations made prior to securing the
order, without the consent of the pur-
chasers to such substitutions, or falsely
representing the reason for making a
substitution, with the capacity and tend-
ency or effect of misleading or deceiving
the purchasing or consuming public, is
an unfair trade practice.

Nore: Nothing tn this section shall be
construed 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 purchaslng
public is practiced or promoted in relation
to the product or ita deviation from samples
or specifications.

§ 211.5 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
capacity and tendency or effect of there-
by misleading or deceiving purchasers or
prospective purchasers, is an unfair trade
practice.

§ 211.6 Deceptive use of trade or cor-
porate naines, 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
the purchasing or consuming public as to
the name, nature, or origin of any prod-
uct of the industry, or of any material
used therein, or which is false or mis-
leading in any other respect, is an unfair
trade practice.

§ 211.7 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 circumstance having

257


$211.8

the capacity and tendency or effect of
substantially injuring or lessening pres-
ent or potential competition, is an unfair
trade practice.

(b) Nothing in this section is 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 is 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,

§ 211.8 ‘Defamation of competitors or
false disparagement of their prod-
ucts.

It is an unfair trade practice:

(a) To defame competitors by falsely
imputing to them dishonorable conduct,
inability to perform contracts, question-
able credit standing, or by other false
representations; or

(b) To falsely disparage a competi-
tor’s products, business methods, selling
prices, values, credit terms, policies, or
services. ,

§ 211.9 Euticing away employees of
competitors.

It is an unfair trade practice for
any member of the industry willfully
to entice away employees or sales
representatives 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 from seeking
more favorable employment, or as pro-
hibiting employers from hiring or of-
fering employment to employees of com-
petitors in good faith and not solely for
the purpose of inflicting injury on a
competitor.

§ 211.10 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 repre-
sentatives of customers or prospective
customers, or to agents, employees, or
representatives of competitors’ custom-
ers or prospective customers, without the
knowledge of their employers or prin-
cipals, as an inducement to influence
their employers or principals to purchase

258

Title 16—Commercial Practices

or contract to purchase products manu-
factured or sold by such industry mem-
ber 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.

§ 211.11 Procurement of competitor’s
confidential information.

It is an unfair trade practice for
any member of the industry to obtain
information concerning the business of
@ competitor by bribery of an em-
ployee or agent of such competitor.
by false or misleading statements or
representations, by the impersona-
tion of one in authority, or by any
other unfair means, and to use the in-
formation so obtained in such manner
as to injure said competitor in his busi-
ness or to suppress competition or un-
reasonably restrain trade.

§ 211.12 Combination or coercion to fix
prices, suppress competition, or re-
strain trade.

It is an unfair trade practice for a
member of the industry, either directly
or indirectly:

(a) To engage in any planned com-
mon course of action, or to enter into or
take part in any understanding, agree-
ment, combination, or conspiracy with
one Or more members of the industry
or with any other person or persons, un-
lawfully to fix, maintain, or enhance the
price of any goods, or otherwise unlaw-
fully to restrain trade; or ‘

(b) To use any form of threat, in-
timidation, or coercion against any
member of the industry or other person
unlawfully to fix, maintain, or enhance
prices, suppress competition, or restrain
trade.

§ 211.13 Prohibited discrimination.*

(a) Prohibited discriminatory prices,
or rebates, refunds, discounts, credits,

1 As used in this section, the word “com-
merce” means “trade or commerce among the
several States and with foreign nations, or
between the District of Columbia or any
Territory of the United States and any State,
Territory, or foreign nation, or between any
insular possesslons or other places under the
jurisdiction of the United States, or be-
tween any such possession or place and any
State or Territory of the United States or
the District of Columbia or any foreign na-
tion, or within the District of Columbia or
any Territory or any insular possession or
other piace under the jurisdiction of the
United States.”


Chapter |—Federal

etc., which effect unlawful price discrim-
ination, It isan unfair trade practice for
any member of the industry engaged in
commerce, in the course of such com-
merce, to grant or allow, secretly or
openly, directly or indirectly, any rebate,
refund, discount, credit, or other form of -
price differential, where such rebate, re-
fund, discount, credit, or other form of
price differential, effects a discrimina-
tion in price between different purchas-
ers 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 substan-
tially to lessen competition or tend to
create a monopoly in any line of com-
merce, or to injure, destroy, or prevent
competition with any person who either
grants or knowingly receives the benefit
of such discrimination, or with cus-
tomers 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 differing
methods or quantities in which such
commodities are to such purchasers sold
or celivered;

Norg: This proviso shal] not be construed
as permitting an industry member to allow
a price differential to a customer, whether
in the form of a quantity price discount, re-
pate or other form, through billing as 4
single order an aggregate of the amount of
two or more orders of such customer on
which the industry member makes separate
deliveries, when the price differential al-
lowed is not based on a net savings in cost
of manufacture, sale, and delivery of the
products to said customer resulting from
the different method and quantity in which
the products are sold and delivered to said
customer, or is more than due allowance for
such net savings; nor ig this proviso to be
construed as permitting an industry mem-
ber to allow a price differential to a customer,
whether in the form of a quantity price dis-
count, rebate, or other form, when, pursuant
to agreement or understanding by the tn-
dustry member and the customer, delivery
of the products purchased ts to be delayed
Or made in Installments so as to involve
storage cost to the industry member, and
when as a result of such cost or otherwise,
the price differential allowed is not based on
a net savings in cost of manufacture, sale,
and delivery of the products to sald customer

Trade Commission § 911.13
resulting from the different method and
quantity in which the products are sold and
delivered to said customer, or is more than
due allowance for such net savings.

(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 shail prevent price changes
from time to time where made in re-
sponse to changing conditions affecting
the market for or the marketability of
the goods concerned, such as but not
limited to obsolescence of seasonal goods,
distress sales under court process, or
sales in good faith in discontinuance of
business in the goods concerned.

(b) Prohibited brokerage and commis-
sions. It is an unfair trade practice for
any member of the industry engaged in
commerce, in the course of such come
merce, to pay or grant, or to receive or
accept, anything of value as a commis-
sion, brokerage, or other compensation,
or any allowance or discount in lieu
thereof, except for services rendered in
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 interme-
diary is acting in fact for or in behalf, or
is subject to the direct or indirect con-
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, ete. It is an unfair
trade practice for any member of the in-
dustry engaged in commerce to pay or
contract for the payment of advertising
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 compensation or in
consideration for any services or facili-
ties furnished by or through such cus-
tomer in connection with the processing,
handling, sale, or offering for sale of any
products or commodities manufactured,
sold, or offered for sale by such inember,
unless such payment or consideration is
available on proportionally equal terms
to all other customers competing in the
distribution of such products or com-
modities.

(ad) Prohibited discriminatory services
or facilities. It is an unfair trade prac-
tice for any member of the industry

259


$211.14

engaged 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 te furnish or
furnishing, or by contributing to the fur-

nishing of, any services or facilities, in- -

eluding storage, connected with the proc-
essing, handling, sale, or offering for
sale of such commodity so purchased
upon terms not accorded to all compet-
ing purchasers 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 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 their own use by
schoois, colleges, universities, public Lli-
braries, churches, hospitals, and charita-
ble institutions not operated for profit.

Note: 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 facle case thus made
by showing justificatlon shall be upon the
person charged; and unless justification shall
be affirmatively shown, the Commission is
authorized to issue an order terminating the
discrimination: Provided, however, That
nothing herein contained 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 com-
petitor, or the services or facilities furnished
by a competitor. See section 2-b, Clayton
Act. .

§ 211.14 False invoicing.

(a) Withholding from or inserting in
invoices or sales slips any statements or
information by reason of which omtssion
or insertion a false record is made, wholly
or in part, of the transactions repre-
sented on the face of such invoices or
sales slips, with the effect of thereby mis-
leading or deceiving purchasers, prospec-
tive purchasers, or the consuming public,
is an unfair trade practice.

(b) The practice of delivering prod-
ucts in a number less than called for on
the delivery record or invoice (so-called
“short count’), with the capacity and
tendency or effect of thereby misleading

Title 16—Commercial Practices

or deceiving the purchasing or consum-
ing public, is an unfair trade practice.

§ 211.15 Selling below cost.

(a) The practice of selling products of
the industry 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 produc-
tion 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.

(b) This section is not tc 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, tend-
ing to create a monopoly, or substantially
lessening competition.

(c) All elements recognized by good
accounting practice as proper elements
of such cost shall be included in deter-
mining cost under this section. ‘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.

§ 211.16 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 in-
directly, to use or promote the use of any
unfatr trade practice specified in $§ 211.1
to 211.16, inclusive.

Group IT
§ 211.101 Arbitration.

The industry approves the practice of
handling business disputes between
members of the industry and their cus-
tomers and suppliers in a fair and
reasonable 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 arbitration.

§ 211.102 Price lists.

The industry approves the practice of
each individual member of the industry
independently adopting, publishing, and

260


Chapter —Federal

circulating to customers and prospective
customers his own price lists. The in-
dustry also approves the practice of such
member including his terms of sale, in-
dependentiy arrived at, as part of his
own published price list.

§ 211.103 Maintenance of accurate rec-
ords.

It is the judgment of the industry
that each member should independently
keep proper and accurate records for de-
termining his cost, based on sound cost
accounting methods.

COMMITTEE ON TRADE PRACTICES
§ 211.201 Industry committee.

The provisions of §16.1 of this sub-
chapter shall be applicable to an indus-
try committee established under this
part.

.[21 P. R. 1174, Feb. 21, 1956]

PART 212—PUBLIC REFRIGERATED
STORAGE INDUSTRY

Sec.
212.0 The industry defined.
Group I

212.1 Deceptive issuance of warehouse re-
ceipts.

212.2 Delivering goods when negotiable
warehouse receipt is outstanding
and uncanceled.

212.3 Deception (general).

212.4 Commercial bribery.

212.6 Selling below cost.

212.6 Inducing breach of contract.

212.7 Defamation of competitors or false
disparagement of their business.

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

212.9 Prohibited forms of trade restraints
(unlawful price fixing, etc.).

212.10 Aiding or abetting use of unfair
trade practices.

Grovur It

912.101 Publishing of rates and charges.

912.102 Excessive extension of credit and
unsound cotlateral or unsecured
loans. |

212.103 Dissemination of credit information.

CoMMITTEE ON TRADE PRACTICES
212.201 Industry committee.

AuTHoritTr: The provisions of this Part 212
issued under secs. 6, 5, 38 Stat. 721, 719; 15
U.S.C, 46, 45, unless otherwise noted.

Sovunrce: The provisions of this Part 212 ap-
pear at 17 FR 2919, Apr. 4, 1962, unless
otherwise noted.

Trade Commission § 212.2

§ 212.0 ‘The industry defined.

This industry is engaged commercially
in the business of providing cold storage
facilities and public refrigerated ware-
house space for the storage of fruits,
vegetables, and other products received
and awaiting re-shipment to fina! des-
tination in the course of commerce and
for which it issues warehouse receipts
and furnishes certain other services.
incidental thereto.

Group I

§ 212.1 Deceptive issuance of warehouse
receipts,

It is an unfair trade practice for any
member of the industry to issue, or cause
to be issued, a warehouse receipt which,
to the knowledge of the industry nem-
ber, or under such circumstances as are
reasonably calculated to impute know]l-
edge to the industry member, is false,
misleading, or deceptive in any material
respect.

Among the practices inhibited by this
section are:

(a) Issuing warehouse receipts with-
out having actual control of the products
for which the receipt is issued.

_ (b) Issuing negotiable warehouse re-
celpts for goods of which the Issuer is
part or sole owner without full and
nondeceptive disclosure of that fact.

§ 212.2 Delivering goods when nego-
tiable warehouse receipt is outstand-
ing and uncanceled.

It is an unfair trade practice for any
member of the industry to deliver part
or all of any lot of stored preducts for
which a negotiable warehouse receipt.
(the negotiation of which would transfer.
the right to the possession of such prod-
ucts) has been issued and is outstanding:
and uncanceled, without obtaining the
possession of such receipt, or taking up
and canceling the same, or placing piain-
ly upon it a statement of what products
have been delivered, at or before the time
of the delivery of such products, except
where delivery thereof is made pursuant
to an order of a court of competent juris-
diction or in compliance with a sale made
to satisfy a lien thereon, or in accord-
ance with state or local regulations or
ordinances, with the capacity and tend-
ency or effect of misleading or deceiving
purchasers or prospective purchasers.

261