Millinery Industry

16 CFR Part 216 · Trade practice rules · in the Code of Federal Regulations 1959-1978 (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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1978 CFR · Earliest edition: 1959 CFR

Text (1978 edition, OCR)

Chapter I—Federal Trade Commissien

may be to injure, destroy, or prevent
competition, or tend to create a mo-
nopoly.

§ 215.19 Aiding or abetting use of unfair
trade practices.

It is an unfair trade practice for any
person, firm, or corporation to aid,
abet, coerce, or induce another, direct-
ly or indirectly, to use or promote the
use of any unfair trade practice speci-
fied in this part.

PART 216—MILLINERY INDUSTRY

Sec.
216.0 Definition.
Group I

216.1 Deceptive (general).

216.2 Disclosure as to foreign origin of fur
or wool felt bodies of hats.

216.3 Deceptive concealment of fact that
hat bodies, hats, or components thereof,
are not new.

216.4 Deceptive sales of sample hats.

216.5 Prohibited use of fictitious price.

216.6 False invoicing.

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

216.8 Prohibited discrimination.

Grovrp II

216.101 Disciosure of terms and conditions
of sale,

216.102 Arbitration.

216.103 Return of merchandise.

COMMITTEE ON TRADE PRACTICES
216.201 Industry committee.

AutHority: Secs. 6, 5, 38 Stat. 721, 719; 15
U.S.C. 46, 45, unless otherwise noted.

Source: 18 FR 5509, Sept. 15, 1953, unless
otherwise noted.

§ 216.0 Definition.

Members of the industry for which
these trade practice rules are estab-
lished are the persons, firms, corpora-
tions, and organizations engaged in
the importation, production, or mar-
keting of millinery and components
thereof.

Group I

§ 216.1 Deceptive (general).

It is an unfair trade practice to use,
or cause or promote to the use of, any
trade promotional literature, advertis-
ing matter, mark, brand, label, trade

§ 216.2

name, design, designation, or other
type of oral or written representation,
however disseminated or published, or
to fail to disclose any material fact,
when such representation or failure to
disclose has the capacity and tendency
or effect of misleading or deceiving
purchasers or prospective purchasers
with respect to the quality, style,
origin, value, substance, grade, kind,
size, production, manufacture, or dis-
tribution of any hat body, or hat or
component thereof, or has the capac-
ity and tendency or effect of deceiving
purchasers in any other material re-
spect.

§ 216.2 Disclosure as to foreign origin of
fur or wool feit bodies of hats.

It is an unfair trade practice to seil,
offer for sale, or distribute any hat
containing a fur or wool felt body
which has been made in a foreign
country unless such hat bears a mark-
ing or stamping on an exposed surface
thereof which adequately ' and nonde-
ceptively discloses the fact that the
body of the hat was made in such for-
eign country.

Nore 1: Marking to contain the word
‘body” and specify name of foreign country.
The stamping or marking on the hat re-
quired by this section must contain the
word ‘“‘body” and specifically name the for-
eign country in which the body has been
made, as for example: “Body made in

(Country).”

NOTE 2: Commission orders to cease and
desist. Violation of the requirements of the
section may lead to the institution of com-
Plaint proceedings charging violation of sec-
tion 5 of the Federal Trade Commission Act.
In such proceedings a cease and desist order
will be predicated upon a finding from evi-
dence in the record that failure to disclose
foreign origin as required by the section
either has resulted in deception of buyers,
or has the capacity and tendency of deceiv-
ing buyers or prospective buyers.

NortE 3: Notking in this section is intended
to require disclosure as to the foreign origin

'To be deemed adequate the marking
must be of such conspicuousness as to be
clearly visible to prospective purchasers of
the hat; must be so placed and affixed as
not readily to be hidden or obliterated; and
must be of such a degree of permanency as
to remain on the hat untli consummation of
consumer purchase thereof.

(19 FR 8152, Dec. 10, 1954]

111


§ 216.3

of the fur or wool from which a fur or wool
felt body has been made in the United
States, or to prevent disclosure of the fact
that a fur or wool felt body made in the
United States is composed of wool or fur im-
ported from a specified foreign country
(e.g., “Body composed of felted Australian
wool’).

§ 216.3 Deceptive concealment of fact that
hat bodies, hats, or components there-
of, are not new.

(a) It is an unfair trade practice to
offer for sale, sell, or distribute any
hat body or hat which previously has
been used, or any hat made of a previ-
ously-used hat body or other compo-
nent, without clearly and conspicuous-
ly disclosing the second-hand condi-
tion of sald hat body, hat, or compo-
nent thereof, as the case may be--

(1) In the inside center tip of the
crown of such hat body and hat by a
stamp or mark which cannot readily
be hidden or obllterated; or

(2) In all advertisements made with
respect to sald hat body, hat, or com-
ponent thereof. .

Nore: Designation of such hat bodies and
hats as “re-worked,” “used,” ‘‘made-over,”
“re-used,” or “re-processed,” or by a similar
term, is not deemed to be adequately infor-
mative under this section. However, nothing
in this section is intended to prohibit a dis-
closure that the hat body or other compo-
nent has been renovated where such is the
fact, and provided its second-hand condition
is also disclosed. Where new components
have been added to a second-hand hat body,
nothing in this section shall prevent such
components from being represented as new,
as for example, a hat made of a second-hand
hat body with new ribbon and feathers may
be described as “second-hand body, decora-
tions new.”

(b) It is an unfair trade practice to
remove, cover, or otherwise destroy
any stamp or mark required by para-
graph (a) of this seetion unless the
person removing, covering, or destroy-
ing such stamp or mark shall re-stamp
or remark the hat body or hat as re-
quired by said paragraph (a) of this
section: Provided, however, Where the
inside center tip of the crown of said
hat body is removed in the manufac-
ture of a hat, the required stamp or
mark disclosing Its second-hand condi-
tion may be placed on some other con-
spicuous part of the hat.

Title 16—Commerclal Practices

§ 216.4 Deceptive sales of sample hats.

It is an unfair trade practice to ad-
vertise or offer for sale as “sample
hats” any hats which are not involced
or otherwise certified by the manufac-
turer or jobber to the retailer as such
and which have not been used specifi-
cally and solely for display or order-
taking purposes by the manufacturer
or jobber.

§ 216.5 Prohibited use of fictitious price.

It is an unfair trade practice for any
member of the industry to advertise,
offer, or sell a product (a) at a price
purported to be reduced from what is
in fact a fictitious price, or (b) at a
purported reduction in price which is
in fact a fictitious one.

§ 216.6 False invoicing.

It is an unfair trade practice to with-
hold from or insert in invoices any
statements or information by reason
of which omission or insertion as false
record is made, wholly or in part, of
the transactions represented on the
face of such invoices, with the capac-
ity and tendency or effect of thereby
misleading or deceiving purchasers,
prospective purchasers, or the consum-
ing public.

§ 216.7 Prohibited forms of trade _re-
straints (unlawful price-fixing, ete.) ?

2The inhibitions of this section are sub-
ject to Pub. L. 542, approved July 14, 1952,
66 Stat. 632 (the McGuire Act) which pro-
vides that with respect to a commodity
which bears, or the label or container of
which bears, the trade-mark, brand, or
name of the producer or distributor of such
commodity and which is in free and open
competition with commodities of the same
general class produced or distributed by
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 con-
tract or agreement is lawful as applled to in-
trastate transactions under the laws of the
State, Territory, or territorial jurisdiction in
which the resale is te be made or to which
the commodity is to be transported for such
resale, and when such contract or agree-
ment is not between manufacturers, or be-
tween wholesalers, or between brokers, or
betwcen factors, or between retailers, or be-
tween persons, firms, or corporations in
competition with each other.

112


Chapter I—Foderal Trade Commission

It is an unfair trade practice for any
member of the industry, either direct-
ly or indirectly, to engage in any
planned common course of action, or
to enter into or take part in any un-
derstanding, agreement, combination,
or conspiracy, with one or more mem-
bers of the industry, 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 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, agreement,
combination, or conspiracy.

§ 216.8 Prohibited discrimination. ®

(a) Prohibited discriminatory prices,
or rebates, refunds, discounts, credits,
etc., which effect unlawful price dis-
crimination. It is an unfair trade prac-
tice for any member of the industry
engaged in commerce, in the course of
such commerce, either directly or indi-
rectly, to discriminate in price between
different purchasers of commodities of
like grade and quality, where either or
any of the purchases involved in such
discrimination are in commerce, where
such commodities are sold for use, con-
sumption, or resale within the Unlted
States or any Territory thereof or the
District of Columbia or any insular
possession or other place under the ju-
risdiction of the Unlted States, and
where the effect of such discrimina-
tion may be substantialiy to lessen
competition or tend to create a mo-
nopoly in any line of commerce, or to
injure, destroy, or prevent competition

‘The term “commerce,” as used in this
section, is to be construed as it is defined in
section 1 of the Clayton Act, which defini-
tion is as follows:

“Commerce” * * * means trade or com-
merce among the several States and with
foreign nations, or between the District of
Columbia or any territory of the United
States and any State, Territory, or foreign
nation, or between any insular possessions
or other places under the jurisdiction of the
United States, or between any such posses-
sion or place and any State or Territory of
the United States or the District of Colum-
bia or any foreign nation, or within the Dis-
trict of Columbia or any Territory or any in-
sular possession or other place under the ju-
risdiction of the United States. * * *

§ 216.8

with any person who either grants or
knowingly receives the benefit of such
discrimination, or with customers of
either of them: Provided, That noth-
ing contained in this paragraph shall
prevent:

(1) Differentials which make only
due allowance for differences in the
cost of manufacture, sale, or delivery
resulting from the differing methods
or quantities in which such commod-
ities are to such purchasers sold or de-
livered; or —

(2) Price changes from time to time
where in response to changing condi-
tions affecting the market for or the
marketability of the goods concerned,
such as but not limited to actual or im-
minent deterioration of perishable
goods, obsolescence of seasonal goods,
distress sales under court process, or
sales in good falth in discontinuance
of business in the goods concerned; or

(3) Persons engaged in selling goods,
Wares, or merchandise in commerce
from selecting their own customers in
bona fide transactions and not in re-
straint of trade.

(b) Prohibited brokerage and com-
missions, It is an unfair trade practice
for any member of the industry en-
gaged in commerce, in the course of
such commerce, to pay or grant, or to
receive or accept, anything of value as
a@ commission, brokerage, or other
compensation, or any allowance or dis-
count in lieu thereof, except for ser-
vices 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 intermediary 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, etc. It is an unfair
trade practice for any member of the
industry engaged in commerce, in the
course of such commerce, to pay or
contract for the payment of advertis-
ing or promotional allowances or any
other thing of value to or for the bene-
fit of a customer of such member as
compensation or in consideration for
any services or facilities furnished by

113


§ 216.101

or through such customer in connec-
tion with the processing, handling,
sale, or offering for sale of any prod-
ucts or commodities manufactured,
sold, or offered for sale by such
member, unless such payment or con-
sideration is available on proportional-
ly equal terms to ail other customers
competing in the distribution of such
products or commodities.

(d) Prohibited discriminatory ser-
vices or facilities. It is an unfair trade
practice for any member of the indus-
try engaged in commerce, in the
course of such commerce, te discrimi-
nate 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 contribut-
ing to the furnishing of, any services
or facilities connected with the pro-
cessing, handling, sale, or offering for
sale of such commodity so purchased
upon terms not accorded to ail com-
peting 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 pur-
chases of their supplies for their own
use by schoois, colleges, universities,
public llbraries, churches, hospitals,
and charitable institutions not operat-
ed 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
porson charged; and unless justification
shall be affirmatively shown, the Commis-
sion is authorized to issue an order termi-
nating the discrimination: Provided, howev-
er, That nothing herein contained 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 te
any purchaser or purchasers was made in
good faith to meet an equally low price of a
competitor, or the services or facilties fur-
nished by a competitor. (See Sec. 2-b, Clay-
ton Act.)

Titie 16—Commercial Practices

Grovr II

§ 216.101 Disclosure of terms and condi-
tions of sale.

The industry disapproves the prac-
tice by individual members of the in-
dustry of issuing orders or invoices
which do not accurately and complete-
ly set forth the conditions of sale, in-
cluding the quantity and price of
goods sold, the discount, and ail other
pertinent terms. The use of such
terms as “as had” in the invoice is not
considered to be in accord with the
provisions of this section.

§216.102 Arbitration.

The industry approves the practice
of handling business disputes between
members of the industry, or between
members of the industry and their
customers or suppliers, in a fair and
reasonable manner, coupied 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 possibie, submit these
disputes to impartial arbitration.

§ 216.103 Return of merchandise.

The practice, by members of the in-
dustry, of selling merehandise and
later permitting the purchaser to
return it for credit or refund of pur-
chase price, without just cause, creates
wasto and loss, increases the cost of
doing business to the detriment of
both the industry and the publlc, and
is condemned by the industry. If mer-
chandise is returnable for just cause,
such return should be made promptly.

COMMITTEE ON TRADE PRACTICES

§ 216.201 Industry committee.

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

(21 FR 1174, Feb. 21, 1956]

116 CFR 16.1 was deleted at 36 FR 3116,
Feb. 18, 1971.

114