Wholesale Plumbing And Heating Industry
16 CFR Part 227 · Trade practice rules · in the Code of Federal Regulations 1959-1977 (12 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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)
Chapter I—Federal Trade Commission
ceptive manner in immediate conjunc-
tion with such word “Gold” or its ab-
breviation, set forth in conformity with
the provisions of Commercial Standard
CS47-34 relative to the marking of gold
filled and rolled gold plate articles other
than watch cases, as for example, “1/20
14K Gold Filled,” “1/20 14K G. F.,” or
“1/40 14K Rolled Gold Plate,” or “1/40
14K R. G. P.;” or
(4) Unless where the part has a cover-
ing of gold or of gold alloy of not less
than 10 karat fineness which has been
applied by an electrolytic process or
method and is of a minimum thickness
throughout equivalent to seven-millionth
(0.000007) of an inch thickness of pure
gold and the fact that the part is elec-
troplated is shown in a clear and
nondeceptive manner in immediate con-
junction with the word “Gold,” or its
abbreviation, as for example “Gold Elec-
troplated.” (Nothing in this section
shall be construed as prohibiting use of
the word “Gold” in the designation “Gold
Washed” or “Gold Flashed” as descrip-
tive of the products or parts which are
electroplated with gold to a lesser thick-
ness than the above-mentioned seven-
millionth (0.000007) of an inch).
(c) Deceptive use of other terms im-
plying gold content. Itisan unfair trade
practice to use the terms “Duragold,”
“Dirigold,” “Noblegold,” “Goldine,”
“Gold-Appearing,” “Gold Effect,” “Mira-
gold,” or any term or designation of
similar import, or any phrase or rep-
resentation indicating the substance,
charm, quality, or beauty of gold or
natural gold, as descriptive of any part
or parts of a fountain pen or mechanical
pencil, when the part or parts so de-
scribed are not composed throughout of
pure gold or of an alloy of gold of at
least 10 karat fineness; or when, al-
though composed of such an alloy, the
karat fineness thereof is not clearly and ~
conspicuously shown in immediate con-
junction with the terms or representa-
tions, or when such terms or representa-
§ 226.17
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
is 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 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 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 con-
sidered within the purview of this section,
but are to be considered as subject to the
requirements and provisions of section 2 (a)
of the Clayton Act.
PART 227—-WHOLESALE PLUMBING
AND HEATING INDUSTRY
tions are otherwise used in a manner or Sec.
form having the capacity and tendency 227.0 Definitions.
or effect of deceiving purchasers or pro- . Group I
spective purchasers. 227.1 Misrepresentation and deception in
§ 226.17 Push money. ; 227.2 Meco: tatt to ch
. . srepresentation as ar
It is an unfair trade practice for any . business. never of
industry member to pay or contract to 227.3 Deception as to nature of sales
pay anything of value to a salesperson transactions.
947
90-059——77--—_17
§ 227.0
Sec.
227.4 Misrepresenting products as con-
forming to standard.
227.6 Substitution of products.
227.6 False invoicing, billing, etc.
227.7 Induclng breach of contract.
227.8 Commercial bribery.
227.9 Prohibited discrimination.
227.10 Prohibited forms of trade restraints
(unlawful price fixing, etc.).
227.11 Prohibited sales below cost.
COMMITTEE ON TRADE PRACTICES
227.201 Industry committee.
AuTHoriry: The provisions of this Part
227 issued under secs. 6, 5, 38 Stat 721, 719;
“15 U.S.C. 46, 45, unless otherwise noted.
Sougcs: The provisions of this Part 227
@ppear at 20 F.R. 2458, Apr. 14, 1958, unless
otherwise noted.
§ 227.0 Definitions.
(a) Members of the industry are the
persons, firms, corporations (including
manufacturers’ sales branches and sales
offices) , and other organizations engaged
in the wholesale distribution and sale of
industy products to dealers and distrib-
utors for resaJe, or to other purchasers
such as, but not limited to, plumbing,
heating, sheet-metal, and piping con-
tractors, commercial and industrial
users, governmental bodies, and institu-
tions purchasing for business uses.
(b) The term “industry products” in-
cludes plumbing and heating equipment
and supplies; also, such air-conditioning
equipment and supplies as are inarketed
for permanent installation.
Grovr I
§ 227.1 Misrepresentation and deception
in general.
It is an unfair trade practice, in
connection with the _ distribution,
sale, or Offering for sale of industry
products, to use, or cause or promote the
use of. any trade promotional literature,
advertising matter, guarantee, warran-
ty, nark, brand, label, trade name, pic-
ture, design or device, designation, or
other type of oral or written represen-
tation, however disseminated or pub-
lished, or to fail to disclose any materia]
fact, when such representation or failure
to disclose has the capacity and tend-
ency or effect of misleading or deceiv-
ing purchasers or prospective purchasers
with respect to the type, quality, grade,
‘
Title 16—Commercial Practices
substance, size, weight, capacity, quan-
tity, manufacture, or distribution of any
Product of the industry, or in any other
material respect.
§ 227.2 Misrepresentation as to charac-
ter of business.
It is an unfair trade practice for any
member of the industry, in the course of
or in connection with the distribution of
industry products, to misrepresent, di-
rectly or indirectly, by means of advertis-
ing, letterheads, telephone listings, oral
Statements, or otherwise, the character,
extent, or type of his business.
§ 227.3 Deception as to nature of sales
transactions.
When an industry member sells indus-
try products at both wholesale and at re-
tail in the same establishment, it is an
unfair trade practice for such industry
member to sell any such products under
circumstances having the capacity and
tendency or effect of causing purchasers
to believe that they are buying at
wholesale prices when such is not the
case,
§ 227.4 Misrepresenting products as con-
forming to standard.
In connection with the sale or offering
for sale of industry products, it is an un-
fair trade practice to represent, through
advertising or otherwise that such prod-
ucts conform to any standards recog-
nized in or applicable to the industry
when such is not the fact.
Note: Illustrative of the type of misrep-
resentation Inhibited by this section is the
practice of an industry member advertising
or otherwise claiming that a product has
been approved by a governmental authority
or private agency, such as the Underwriters’
Laboratories or the American Gas Associa-
tion (AGA), with respect to meeting certain
specifications or standards when in fact the
product has not been so approved.
§ 227.5 Substitution of products.
It is an unfair trade practice for a
member of the industry to make an un-
authorized substitution of products,
where such a substitution has the ca-
pacity and tendency or effect of mislead-
ing or deceiving the purchasing or con-
suming public, by:
(a) Shipping or delivering industry
products which do not conform to
samples submitted, to specifications
248
Chapter I—Federal
upon which the sale is consummated, or
to representations made prior to secur-
ing the order, without advising the pur-
chaser of the substitution and obtaining
his consent thereto prior to making ship-
ment or delivery; or
(b) FPalsely representing the reason
for making a substitution.
8 227.6 False invoicing, billing, etc.
It is an unfair trade practice for a
member of the industry to engage in
false invoicing which has the capacity
and tendency or effect of misleading or
deceiving purchasers, prospective pur-
ehasers, or the consuming public, and
which may resuit from any of the fol-
lowing practices:
(a) Withholding from, altering, or
inserting in, invoices, billings, or sales
slips any statements or information by
reason of which omission, aiteration, or
insertion a false record is made, wholly
or in part, of the transactions repre-
sented on the face of the invoices, bill-
ings, or sales slips; or
(b) Delivering products in a number
less or more than called for on the de-
livery record or invoice (so-called “short
count” or “long count’).
Norge: Iliustrative of the type of practice
inhibited by this section is the deliberate
failure to disclose on an Iinvotce or billing
the correct quantity delivered. A further
Dlustration of false invoicing is the omis-
sion on the invoice or billing of information
to the effect that the products of the in-
-dustry covered thereby are seconds or de-
fective, when such is the fact. Further
iliustrative of a practice intended to be
covered by this section ts the furnishing by
the wholesaler of a marked-up invoice to
& plumbing contractor doling cost-plus work.
(20 F.R. 2458, Apr. 14, 1955, as amended at
24 F.R. 4327, May 29, 1959}
§ 227.7 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 circumstances hav-
ing the capacity and tendency or effect
of substantially injuring or lessening
present 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
Trade Commission §.297.9
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.
§ 227.8 Commercial brihery.
It is an unfair trade practice for a
member of the industry, directly or indi-
rectly, to give, or offer to give, or permit
or cause to be given, money or anything
of value to agents, employees, or rep-
resentatives 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
or contract to purchase products 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, or to effect other ad-
vantage in favor of the industry member
making such gift or offer with respect to
the sale of industry products to such em-
ployers or principals.
Nore: Among the practices inhibited by
this section is the giving of a thing of value
by an industry member to the purchasing
agent of an industrial account, without the
knowledge of the latter's employer or prin-
cipal, in order to obtain in advance a sched-
ule of the account’s monthly requirements
of industry products which is not likewtse
furnished to competing industry members.
§ 227.9 Prohibited discrimination.
(a) Prohibited discriminatory prices,
rebates, refunds, discounts, credits, etc.,
‘As used in § 227.9, the word “commerce”
means “trade or commerce among the several
States and with foreign nations, or between
the District of Columbia or any Territory of
the United States and any State, Territory,
or foreign nation, or between any insular
possessions or other places under the jurts-
dictlon of the United States, or between any
such possession or place and any State or
Territory of the United States or the District
of Columbia or any foreign nation, or within
the District of Columbia or any Territery
or any insular possession or other place
under the jurisdiction of the United Statea,”
249
§ 227.9
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 re-
bate, refund, discount, credit, or other
form of price differential, where such
rebate, refund, discount, credit, or other
form of price differential, effects a dis-
crimination in price between different
purchasers 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
commerce, or to injure, destroy, or pre-
vent competition with any person who
-either grants or knowingly receives the
‘benefit of such discrimination, or with
customers of either of them: Provided,
Jrowever:
41) 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, and are not purchased by schools,
colleges, universities, public libraries,
churches, hospitals, or charitable insti-
tutions not operated for profit, as sup-
plies for their own use;
(2) That nothing contained in this
paragraph shall prevent differentials
which make only due allowance for dif-
ferences in the cost of manufacture, saie,
or delivery resulting from the differing
methods or quantities in which such
commodities are to such purchasers sold
or delivered ;
Nore: Cost justification under the above
proviso depends upon net savings in cost
based on all facts relevant to the transac-
tions under the terms of subparagraph (2)
of this paragraph. For example, if a seller
regularly grants a discount based upon the
purchase of a specified quantity by a single
order for a single delivery, and this discount
ts justified by cost differences, it does not
foliow that the same discount can be cost
justified if granted to a purchaser of the
same quantity by multiple orders or for
deliveries.
(3) That nothing contained in this
section shall prevent persons engaged in
selling goods, wares, or merchandise in
commerce froin selecting their own cus-
tomers in bona fide transactions and not
in restraint of trade;
(4) That nothing contained in para-
graph (a) of this section shall prevent
price changes from time to time where
Title 16—Commercial Practices
made in response to changing conditions
affecting the market for or the market-
ability of the goods concerned, such as
but not limited to obsolescence of sea-
sonal goods, imminent deterioration of
perishable goods, distress sales under
court process, or sales in good faith in
discontinuance of business in the goods
concerned;
(5) That nothing contained in this
section shall prevent the meeting in good
faith of an equally low price of a com-
petitor, or the services or facilities fur-
nished by a competitor (see paragraphs
(d) and (e) of this section).
Nore: In complaint proceedings, justifica-
tion of price differentials under subpara-
graphs (2), (4) and (5) of this paragraph
is a matter of affirmative defense to be es-
tablished by the person or concern charged
with price discrimination.
(b) The following are examples of
price differential practices to be con-
sidered as subject to the prohibitions of
paragraph (a) of this section when in-
volving goods of like grade and quality
which are sold for use, consumption, or
Tesale within any place under the jurts-
diction of the United States, and which
are not purchased by schools, colleges,
universities, public Hbraries, churches,
hospitals, or charitable institutions not
operated for profit, as supplies for their
own use, and when:
(1) The commerce requirements
specified in paragraph (a) of this section
are present; and
(2) The price differentia) has a rea-
sonable probability of substantially less-
ening competition or tending to create
@ monopoly in any line of commerce, or
of injuring, destroying, or preventing
competition with the industry member
or with the customer receiving the bene-
fit of the price differential, or with cus-
toners of either of them: and
(3) The price differential is not justi-
fied by cost savings (see paragraph (a)
(2) of this section) ; and
(4) The price differential is not made
in response to changing conditions af-
fecting the market for or the market-
ability of the goods concerned (see para-
graph (a) (4) of this section) ; and
(5) The lower price was not made to
meet in good faith an equally low price
of a competitor (see paragraph (a) (5)
of this section).
Ezample No, I. At the end of a given
period an industry member grants a dis-
250
Chapter |—Federal
count to a customer equivalent to a fixed
percentage of the total of the customer’s
purehases during such period and fails to
grant such discount to other customers un-
der like conditions.
Ezampie No. UW. An industry member
sells goods to one or more of his customers
at a higher price than he charges other cus-
tomers for like merchandise. It is imma-
terial whether or not such discrimination is
accomplished by misrepresentation as to the
grade and quality of the products sold.
Example No. III, An industry member
makes a sale of industry products to a pur-
ehaser under an arrangement whereby the
products are shipped by the industry mem-
ber’s supplier directly to such purchaser and
charges a lower price than that charged
other purchasers under similar circum-
stances, or a price which, when compared
with the price charged purchasers on sales
made out of the stock of the industry mem-
ber, constitutes a discount greater than can
be justified by the difference in costs result-
ing from the differing quantities or method
of sale or delivery.
Ezample No. IV. An industry member
sells to some customers industry products
at prices of drop shipments when in fact
such transactions are out-of-stock sales
which are made to other customers at higher
prices, even though the quantities involved
are large enough to be delivered on a direct
shipment basis. (As here used an “out-of-
stock” sale is one from the industry mem-
ber's stock on hand and a “drop shipment”
sale is one in which the industry member
arranges to have the goods shipped by the
industry Member's supplier directly to the
industry member's customer.)
Example No. V. Terms of 2/10th prox. are
granted by an industry member to some
customers on goods purchased by them from
the industry member. Another customer or
customers are, nevertheless, allowed to take
® 5 percent instead of a 2 percent discount
when making payment to the industry mem-
ber within the time prescribed.
(ce) 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 intermediary
is acting in fact for or in behalf, or is
subject to the direct or indirect control,
of any party to such transaction other
Trade Commission § 227.9
than the person by whom such compen-
sation is so granted or paid.
(d) 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 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 member,
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.
(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
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.
(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.
Nore: The foregoing paragraph (f) of this
section is a re-statement of section 2 (f)
of the Clayton Act as amended. In a com-
Piaint proceeding under this section, in
order to make out a prima facie violation,
the Commission must show that the favored
buyer induced or received the lower price
knowing, or knowing facts from which he
should have known, that such price was
violative of section 2 (a) of said act and
not justified under paragraph (a) (2), (4),
or (5) of this section. When, in any such
Proceeding, the issue is limited to the ques-
tion of whether the price differential in-
voived made only due allowance for differ-
ences in cost of manufacture, sale, or deliv-
ery resuiting from the differing methods or
251
§ 227.10
quantities in which the goods were sold and
delivered, the Commission may establish a
prima facie case in a number of ways, in-
cluding:
(1) By showing that the buyer paying the
lower price knew that the methods by, and
quantities in which the goods were sold and
delivered to him by the seller, were the same
es in the case of the competing buyer or
buyers paying the higher price or prices;
or
(2) By showing, when there Is a difference
tn the methods or quantities in which the
goods were sold and delivered by the seller
+o the buyer than in the case of the com-
peting buyer or buyers paying the higher
priee 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 cheracter specified as to justify the price
differential.
§ 227.10 Prohibited forms of trade re-
straints (unlawful price fixing, etc.).
It is an unfair practice for any member
of the industry, either directly or indi-
rectly, 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, to fix
or maintam 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
8 The inhibitions of this section are sub-
ject 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
of the producer or distributor of such com-
modity and which is in free and open com-
petition with commodities of the same gen-
eral class produced or distributed by others,
a seller of such a commodity may enter into
@ contract or agreement with a buyer thereof
which establishes a minimum or stipulated
price at which such commodity may be re-
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
resale, and when such contract or agreement
1s not between manufacturers, or between
wholesalers, or between brokers, or between
factors, or between retailers, or between per-
sons, firms, or corporations in competition
with each other.
Title 16—Commercial Practices
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.
§ 227.11 Prohibited sales 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 is, or where
there is a reasonable probability that
the effect will be, to substantially injure,
suppress, or stifle competition or tend to
create a monopoly, is an unfair trade
practice.
(o) This section ts 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 is, or where there is
reasonable probability that the effect
will be, to substantially injure, suppress,
or stifle competition or to create a
monopoly. Among the situations in
which the requisite purpose or intent
would ordinarily be lacking are cases in
which such sales were: (1) Of seasonal
goods near the conclusion of the season:
(2) of perishable goods in respect to
which deterioration is imminent; (3) of
obsolescent goods; (4) made under
judicial process; or (5) made in bona
fide discontinuance of business in the
goods concerned.
(ce) As used in paragraphs (a) and
(b) of this section, the term “cost”
means the respective seller’s cost and
not an average cost in the industry
‘whether such average cost be deter-
mined by an industry cost survey or
some other method. It consists of the
total outlay or expenditure by the seller
in the acquisition, production, and dis-
tribution of the products involved, and
comprises all elements of cost such as
labor, material, depreciation, taxes (ex-
cept taxes on net income and such other
taxes as are not properly applicable to
cost), and general overhead expenses,
incurred by the seller in the acquisition,
manufacture, processing, preparation for
marketing, sale, and delivery of the
products. Not to be included are divi-
dends or interest on borrowed or in-
vested capital, or nonoperating losses,
such as fire losses and losses from the
sale or exchange of capital assets. Op-
252
Chapter }—Federal Trade Conimission
erating cost should not be reduced by
items of nonoperating income, such as
income from investments, and gain on
the sale of capital assets.
(d) Nothing in this section shall be
construed as relieving an industry mem-
ber from compliance with any of the re-
quirements of the Robinson-Patman Act.
COMMITTEE ON TRADE PRACTICES
§ 227.201 Industry committee.
The provisions of § 16.1 of this sub-
chapter shall be applicable to an indus-
try committee established under this
part.
{21 F. R. 3833, June 5, 1956]
PART 228—TIRE ADVERTISING AND
LABELING GUIDES ~
Sec.
228.0 “Industry Product” and “Industry
Member” defined.
2998.0-1 Use of guide principles,
228.1 Tire description.
228.2 Designations of grade, line, level, or
quality.
228.3 Deceptive designations,
228.4 Original equipment,
228.5 Comparative quality and perform-
ance claims.
228.6 Ply count, plies, ply rating.
228.7 Cord materials.
228.8 “Change-Overs,” “New Car Take
Offs,” etc,
228.9 Retreaded and used tires.
228.10 Disclosure that products are obso-
lete or discontinued models.
228.11 Blemished, imperfect, defective, etc.
products.
228.12 Pictorial misrepresentations.
228.138 Racing claims.
228.14 Bait advertising.
228.15 Deceptive pricing.
228.16 Guarantees.
228.17 Safety or performance features.
228.18 Other claims and representations.
228.19 Snow tire advertising.
AUTHORITY: The provisions of this Part 228
issued under secs. 5, 6, 38 Stat. 719, as
amended, 721; 15 U.S.C. 45, 46, unless other-
wise noted.
Source: The provisions of this Part 228
appear at 82 F.R. 15525, Nov. 8, 1967, unless
otherwise noted.
§ 228.0 “Industry Product” and “Indus-
try Member” defined.
As used in this part, the terms “In-
dustry Product” or “Product” shall mean
pneumatic tires for use on passenger
automobiles, station wagons, and similar
vehicles, or the materials used therein.
The term “Industry Member” shall
mean: All persons or firms who are en-
gaged in the manufacture, sale or dis-
tribution of industry products as above
§ 998.1
defined whether under the manufac-
turer’s or a private brand; and the man-
ufacturers of passenger automobiles,
station wagons, and similar vehicles for
which industry products are provided as
original equipment.
§ 228.0-1 Use of guide principles.
‘The following general principles will
be used in determining whether termi-
nology and other direct or indirect repre-
sentations subject to the Commission’s
jurisdiction regarding industry products
conform to laws administered by the
Commission.
§ 228.1 Tire description.
(a) The purchase of tires for a motor
vehicle is an extremely important matter
to the consumer. Not only are substantial
economic factors involved, but in most
instances the purchaser will entrust the
safety of himself and others to the per-
formance of the product.
(b) To avoid being deceived, the con-~
sumer must have certain basic informa-
tion. Certain of this information should
be provided before the purchaser makes
his choice but other is essential through-
out the life of the tire.
(1) Disclosure before the sale. The
following information should be dis-
closed in point of sale material which is
prominently displayed and of easy ac-
cess, on the premises where the purchase
is to be made in order to appraise the
consumer:
(i) Load-carrying capacity of the
tire. This information is essential to
assure the purchaser that the tires he
selects are capable of safely carrying the
intended loan. This information should
consist of the maximum load-carrying
capacity as related to various recom-
mended air pressures and may include
data which indicates the effect such
varying pressures will have on the oper-
ation of the automobile. All such infor-
ination shall be based on actual tests
utilizing adequate and technically sound
procedures. The test procedures and re-
sults shall be in writing and available for
inspection.
Gi) Generic name of cord material,
Different cord inaterials can have per-
formance characteristics that will affect
the consumer’s selection of tires. These
various characteristics are widely ad-
vertised, and the consumer is aware of
the distinctions. Without a disclosure
of the generic name of the cord ma-
terial, the consumer is unable to consider
this factor in his purchase.
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