Waterproof Paper Industry (Asphaltic Type)
16 CFR Part 219 · Trade practice rules · in the Code of Federal Regulations 1959-1976 (10 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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)
Chapter I—Federal
misleading statements or representa-
tions, by the impersonation of one in
authority, or by any other unfair means,
and to use the information so obtained
so as substantially to injure competition
or unreasonably restrain trade.
§ 218.13 Misrepresentation as to charac-
ter of business.
For any person, firm, or corporation
to represent or hold himself or itself out
as being a photoengraver when not en-
gaged in the manufacture of photoen-
gravings, or in any other manner to
misrepresent, the character, extent, or
type of his or its business, is an unfair
trade practice.
§ 218.14 Misbranding of products.
The false or deceptive marking or
branding of the products of the industry
with regard to the grade, quality, quan-
tity, use, size, material, content, origin,
preparation, manufacture, or distribu-
tion of such products, or in any other
material respect, is an unfair trade
practice.
§ 218.15 False invoicing.
Withholding from or inserting in in-
voices or order tickets any statements or
information by reason of which omission
or insertion a false record is made, wholly
or in part, of the transactions repre-
sented on the face of such invoices or
order tickets, with the capacity and
tendency or effect of thereby misleading
or deceiving purchasers, prospective pur-
chasers, or the consuming public, is an
unfair trade practice.
§ 218.16 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 intent
_ or purpose, and where the effect may be,
to injure, suppress, or stifle competition
or tend to create a monopoly in the pro-
duction or sale of such products, is an
unfair trade practice.
(b) As used in this section the term
“cost” means the total cost, to the seller,
Including the costs of acquisition, proc-
essing, preparation for marketing, sale,
and delivery. All elements recognized
by good accounting practice as proper
elements of such cost shall be included
in determining 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.
Trade Commission § 218.17
(c) This section is not to be construed
as prohibiting all sales below cost, but
only such selling below the seller’s cost
as is resorted to and pursued with the
wrongful intent or purpose referred to
and where the effect may be to injure,
destroy, or prevent competition, or tend
to create a monopoly. .
§ 218.17 Prohibited forms of trade re-
straints (unlawful price fixing, etc.).?
It is an unfair trade practice for any
member of the industry, either directly
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, intimida-
tion, or coercion to induce any member
of the industry or other person or per-
sons to engage in any such planned com-
mon course of action, or to become a
party to any such understanding, agree-
ment, combination, or conspiracy.
PART 219--WATERPROOF PAPER
INDUSTRY (ASPHALTIC TYPE)
Sec.
219.0 Industry definition.
Grour I
219.1 Selling below cost.
219.2 False invoicing.
219.3 Prohibited discrimination.
2 The inhibitions of this section are subject
to Public Law 542, approved July 14, 1952, 66
Stat. 682 (the McGuire Act) which provides
that witb respect to a commodity which
bears, or the label or container of which
pears, 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 con-
tract 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 agree-
ment js lawful as applied to intrastate trans-
actions under the laws of the State, Terri-
tory, or territorial jurisdiction in which the
resale is to be made or to which the com-
modity is to be transported for such resale,
and when such contract or agreement is-not
between manufacturers, or between whole.
salers, or between brokers, or between fac-
tors, or between retallers, or between persons,.
firms, or corporations in competition. with
each other.
291
§ 919.0
Sec. :
219.4 Substitution of products.
219.5 Push money.
919.6 False and misleading price quota-
tions, etc.
919.7 Deceptive use of trade or corporate
names, trade-marks, ete.
219.8 Inducing breach of contract.
919.9 Defamation of competitors or false
disparagement of their products.
219.10 Commercial bribery.
219.11 Procurement of competitors’ confi-
dential information.
219.12 Prohibited forms of trade restraints
(unlawful price fixing, etc.)
219.13 Enticing away employees of competi-
tors.
219.14 Deception in marking of industry
products.
219.15 Misrepresentation as to character of
business.
219.16 Misrepresenting products as con-
forming to standard.
219.17 Aiding or abetting use of unfair
trade practices.
CoMMITTEE ON TRADE PRACTICES
219.201 Industry committee.
AvuTHorrry: The provisions of this Part 219
issued under secs. 6, 5, 38 Stat. 721, 719; 15
U.S.C. 46, 45, unless otherwise noted.
Sousce: The provisions of this Part 219 ap-
pear at 19 F.R. 4019, July 2, 1954, unless
otherwise noted.
§ 219.0 Industry definition.
As used in this part, the term “water-
proof paper” makes reference to sheets
of laminated paper, the bond of which Is
asphalt or an asphaltic compound, and
sheets of paper infused or coated with
asphalt or an asphaltic compound.
Group I
8219.1 Selling below cost.
The practice of selling industry prod-
ucts at a price less than the cost thereof
to the seller, with the purpose or intent,
and where the effect may be, to injure,
suppress, or stifle competition or tend to
create 3 monopoly in the production or
sale of such products, is an unfair trade
practice. As used in this section, the
term “cost” means the total cost to the
seller, including the costs of acquisition,
processing, preparation for marketing,
sale, and delivery.
§ 219.2 False invoicing.
(a) Withholding from or inserting in
invoices or sales slips any statements or
information by reason of which omission
or insertion a false record is made, wholly
or in part, of the transactions repre-
sented on the face of such invoices or
Title 16—Commercial Practices
sales slips, with the effect of thereby
misleading or deceiving purchasers, pro-
spective purchasers, or the consuming
public, is an unfair trade practice.
(b) The practice of delivering prod-
ucts in a number Jess than called for
on the delivery record or invoice (so-
called “short count’), with the capacity
and tendency or effect of thereby mis-
leading or deceiving the purchasing or
_ consuming public, is an unfair trade
practice.
§ 219.3 Prohibited discrimination.’
(a) Prohibited discriminatory prices,
or rebates, refunds, discounts, 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 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 pur-
chasers of goods of like grade and
quality, where either or any of the pur-
chases involved therein are in commerce,
and where the effect thereof may be sub-
stantially 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 custom-
ers of either of them: Provided, how-
ever,
(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
1As used in this section, the word “com-
merce” means “trade or commerce among the
several States dnd 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 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 Cotumbia or any Ter-
ritory or any inswar possession or other place
under the jurisdiction of the United States.”
292
Chapter Il—Federal
methods or quantities in which such
commodities are to such purchasers sold
or delivered;
NOTE: “Spindling” of orders. This proviso
shall not be construed as permitting the
practice of allowing a price differential,
whether in the form of a discount, rebate,
or other form, through billing as a single
order an aggregate of the amounts of two
cor more orders separately delivered, when
such price differential is not justified by
savings to the seller which make only due
allowance for differences in the cost of man-
ufacture, sale, or delivery resulting from the
differing methods or quantities in which
such products 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 in response to
changing conditions affecting the mar-
ket for or the marketability of the goods
concerned, such as but not limited to ob-
solescence 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 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 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.
(ec) Prohibited advertising or promo-
tional allowances, etc. 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 ailowances 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-
Trade Commission § 219.4
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 member,
unless such payment or consideration is
available on proportionally equal terms
to all other customers competing in
the distribution of such products or
commodities.
(a) 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
furnishing of, any services or facilities
connected 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.
(e) Inducing or receiving an Megat
discrimination in price. It ig 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
schools, colleges, universities, public
libraries, churches, hospitais, and chari-
table institutions not operated for profit.
Note: In complalnt proceedings charging
discrimination in price or services or facili-
tles furnished, and upon proof having been
made of such discrimination, the burden
of rebutting the prima facie case thus made
by showing justlficatlon shall be upon the
person charged; and unless justification shall
be affirmatively shown, the Commission ja .
authorized 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
any purchaser or purchasers was made in
good faith to meet an equally low price of
& competitor, or the services or facilities
furnished by a competitor. See section 2-b,
Clayton Act.
§ 219.4 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
293
§ 219.5
representations made prior to securing
the order, without the consent of the
purchasers to such substitutions, or
falsely representing the reason for mak-
ing a substitution, with the capacity and
tendency or effect of misleading or de-
ceiving the purchasing or consuming
public, is an unfair trade practice.
Norse: Nothing in 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 purchasing
publle is practiced or promoted in relation
to the product or its deviation from samples
or specifications.
§ 219.5 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, special 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 1s
without the knowledge and consent of
the salesperson’s employer; 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 hampering
sales of products of competitors of an
industry member; or
(a) When, because of the terms and
conditions of the understanding or
agreement, 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 sales persons of competing
customers on proportionally equal terms
in compliance with section 2 (d) and (e)
of the Clayton Act.
Nore: Payments made by an industry
member to a salesperson of a customer under
any agreement or understanding that all or
any part of such payments is to be trans-
ferred by the salesperson to the customer, or
Is to result in a corresponding decrease in the
‘salesperson’s salary, are not to be considered
Title 16—Commercial Practices
within the purview of this section 5, but are
to be considered as subject to the require-
ments and provisions of section 2 (a) of the
Ciayton Act.
§ 219.6 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.
[24 FR. 4327, May 29, 1959]
§ 219.7 Deceptive use of trade or cor-
porate names, trade-marks, etc.
The use of any trade name, corporate
name, trade-mark, or other trade desig-
nation which has the capacity and tend-
ency or effect of misleading or deceiv-
ing the purchasing or consuming public
as to the name, nature, or origin of any
product of the industry, or of any ma-
terial used therein, or which is false or
misleading in any other respect, is an
unfair trade practice.
§ 219.8 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 interfer-
ing with or obstructing the performance
of any such contractual duties or serv-
ices, under any circumstance having the
capacity and tendency or effect of sub-
stantially injuring or lessening present
or potential competition, is an unfair
trade practice.
(b) Nothing in this section is intended
to imply that it is impreper 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.
§ 219.9 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-
294
Chapter |-—Federal
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.
§ 219.10 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 er prospective
customers, or to agents, employees, or
representatives of competitors’ cus-
tomers or prospective customers with-
out the knowledge of their employers
or principals, as an inducement to
inftuence their employers or prin-
cipals to purchase 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.
§ 219.11 Procurement of competitors’
confidential information.
It is an unfair trade practice for
any member of the industry to ob-
tain information concerning the busi-
ness of a competitor by bribery of
an employee or agent of such com-
petitor, by false or misleading state-
ments or representations, by the imper-
sonation of one in authority, or by any
other unfair means, and to use the infor-
mation so obtained in such manner as to
injure said competitor in his business or
to suppress competition or unreasonably
restrain trade.
$219.12 Prohibited forms of trade re-
straints (unlawful price fixing, etc.)."
It is an unfair trade practice for any
member of the industry, either directly
The inhibitions of this section are eub-
ject to Public Law 542, approved July 14,
1962, 66 Stat. 683 (the McGuire Act) which
provides that with respect to a commodity
which bears, or tbe label or container of
which bears, the trade-mark, brand, or name
ot the producer or distributor of such com-
modity and which 1g in free and open compe-
tition 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 re-
Trade Commission § 219.14
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, intimida-
tion, or coercion to induce any member
of the industry or other person or per-
sons to engage in any such planned com-
mon course of action, or to become a
party to any such understanding, agree-
ment, combination, or conspiracy.
§ 219.13 Enticing 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
humpering or injuring competitors in
their business and destroying or sub-
stantially lessening competition: Pro-
vided, That nothing in this section shall
be construed as prohibiting employees
fromr seeking more favorable employ-
ment, or as prohibiting employers from
hiring or offering employment to em-
ployees of competitors in good faith and
not solely for the purpose of inflicting
injury on a competitor.
§ 219.14 Deception in marking of in-
dustry products.
It is an unfair trade practice to
make or publish, or cause to be made
or published, in trade promotional
literature, in advertising, in the form
of a label or marking on an indus-
try product, or otherwise, any statement
or representation which directly, or by
reason of conceaiment of material fact,
has the capacity and tendency or effect
of misleading or deceiving purchasers
or prospective purchasers concerning the
gerade, quality, use, size, composition and
finish, strength, thickness, origin, prep-
aration, manufacture, or distribution of
sold 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
commodity is to be transported for such re-
sale, and when such contract or agreement
is not between manufacturers, or between
wholesalers, or between brokers, or between
factors, or between retatlers, or between per-
sons, firms, or corporations in competition
with each other,
295
§ 219.15
any product of the industry, or which
has the capacity and tendency or effect
of misleading or deceiving purchasers
or prospective purchasers in any other
material respect.
§ 219.15 Misrepresentation as to char-
acter of business.
It is an unfair trade practice for
any industry member, in the course
of or in connection with the distribu-
tion of industry products, to rep-
resent, directly or indirectly, that he is
a manufacturer of industry products, or
that he owns or controls a factory mak-
ing such products, when such is not the
fact, or in any other manner to mis-
represent the character, extent, or type
of his business.
§ 219.16 Misrepresenting products as
conforming to standard.
Representing, through advertising,
personal solicitation, or otherwise, that
any product of the industry conforms to
a standard recognized in or applicable to
the industry when such is not the fact,
is an unfair trade practice.
§ 219.17 Aiding or abetting use of an-
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 in this part.
COMMITTEE ON TRADE PRACTICES
§ 219.201 Industry committee.
The provisions of $16.1 of this sub-
chapter shall be applicable to an in-
dustry committee established under this
art
{21 F.R. 1174, Feb. 21, 1956]
PART 220—LIBRARY BINDING
INDUSTRY
Bec.
220.0 Industry definition.
Grove I
220.1 Deception (general).
220.2 Guarantees and warranties.
220.3 Other deception.
220.4 Deceptive representations as to prod-
ucts conforming to a standard or
specification.
220.55 Fictitious prices, price lists, etc.
220.6 Selling below cost.
220.7 Defamation of competitors or false
disparagement of their products.
Title 16—Commercial Practices
Sec.
220.8 Enticing away employees of competi-
tors.
Commerciai bribery.
Procurement of competitors’ confi-
dential information.
Unlawful interference with competi-
tors’ purchases or sales,
Arrangements to exclude sale of com-
petitors’ products.
Tie-in sales; coercing purchase of
one product as a prerequisite to
the purchase of other products.
Unfair threats of infringement sults.
Inducing breach of contract.
Prohibited forms of trade restraints
(unlawful price fixing, etc.)
Prohibited discrimination.
Aiding or abetting unfair trade prac-
tices.
AuTHORITY: The provisions of this Part 220
issued under secs. 6, 6, 88 Stat. 721, 719; 15
U.S.C. 46, 45, unless otherwise noted,
Source: The provisions of this Part 220
appear at 19 F.R. 6310, Aug. 20, 1954, unless
otherwise noted.
§ 220.0 Industry definition.
Members of this industry are those
persons, firms, corporations, and organ-
izations engaged in the business of re-
binding and prebinding of books, period-
icals, and other documents especially
for use in public and private libraries.
GROUP I
§ 220.1 Deception (general).
It is an unfair trade practice for any
industry member to use, or cause or
promote the use of, any advertising mat-
ter, guarantee, warranty, trade promo-
tional literature, mark, brand, label, or
other representation, however dissemi-
nated or published, which has the
capacity and tendency or effect of mis~
leading or deceiving purchasers, pro-
spective purchasers, or the consuming
public with respect to the grade, quality,
conformity to a trade standard, material,
composition, construction, fabrication,
manufacture, distribution, origin, or
price or terms of sale, of library binding,
or which is false, misleading, or decep-
tive in any other material respect. .
Among the various deceptive practices
inhibited by the paragraph above are the
following:
(a) Misrepresentation as to character
of business. It is an unfair trade prac-
tice for any member of the industry to
represent, directly or indirectly, through
the use of any word or term in his cor-
porate or trade name, in his advertising
or otherwise, that he is a library binder,
220.9
220.10
220.11
220.12
220.13
220.14
220.15
220.16
220.17
220.18
296