Guides For The Ladies' Handbag Industry
16 CFR Part 247 · Guides · in the Code of Federal Regulations 1970-1995 (25 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1995 CFR · Earliest edition: 1970 CFR
Text (1995 edition, OCR)
Federal Trade Commission c. Five minutes after the last shock, the daily rate of the watch in each of the three positions described in a. above should be de- termined by observing it for 2 minutes in each position. The differences in daily rate before and after the shock should be deter- mined for each position. The residual effect of the shocks will be equal to the greatest of these differences. A watch will be considered to have passed the foregoing test, if after application of the shocks, it does not stop; the residual effect does not exceed 60 seconds per day; and an examination of the watch does not disclose any physical damage which would affect its operation or appearance, e.g., hands bent or out of position, cracked crystal, or auto- matic or calendar devices inoperable or out of alignment. 4. Test for water resistance. A watch should be tested for water resistance by immersing it completely for at least 5 minutes in water under atmospheric pressure of 15 pounds per square inch and for at least another 5 min- utes in water under an additional pressure of at least 35 pounds per square inch (total pressure of 50 pounds per square inch). If the watch does not admit any water or moisture it will be considered to have passed the test. 5. Test for antimagnetic qualities. A watch should be tested for its resistance to mag- netism by placing it in a demagnetized con- dition in an electrical field of not less than 60 Gauss for at least 5 seconds in a vertical position and for at least 5 seconds in a hori- zontal position. If the daily rate of the watch has not been changed by more than 15 sec- onds as a result of the foregoing exposure, it shall be considered to have passed the test. PART 247—GUIDES FOR THE LADIES’ HANDBAG INDUSTRY Sec. 247.0 Definitions. 247.1 Misrepresentation (general). 247.2 Misrepresentation and deception as to material composition. 247.8 Form of disclosure as to material com- position. 247.4 Misrepresentation as to aniline finish, graining, embossing, and processing. 247.5 Misuse of terms such as ‘“Scuffproof,”’ “Scratchproof,’’ “Scuff Resistant,’’ and “Scratch Resistant.” 247.6 Deceptive pricing. 247.7 Discriminatory prices, rebates, counts, etc. 247.8 Advertising or promotional allow- ances, or services or facilities. 247.9 Inducing or receiving illegal discrimi- nation in price, advertising or pro- motional allowances, or services or fa- cilities. dis- €1 § 247.2 AUTHORITY: Secs. 5, 6, 38 Stat. 719, as amended, 15 U.S.C. 45, 46; 49 Stat. 1526; 15 U.S.C. 13, as amended. SouRcE: 4 FR 9924, June 27, 1969, unless otherwise noted. $247.0 Definitions. For purposes of this part the follow- ing definitions apply: (a) Industry member means any per- son, firm, corporation, or organization engaged in the manufacture, sale, or distribution of any industry products as defined below. (bo) Industry product means all kinds and types of ladies’ handbags, shoulder bags, purses, pocketbooks, and similar articles, of any composition. $247.1 Misrepresentation (general). No representation should be made in advertising, labeling, or any other manner, which is likely to mislead or deceive any purchaser concerning the material composition, quality, finish, durability, price, origin, construction, ease of cleaning, or any other feature, of an industry product. (Guide 1) §247.2 Misrepresentation and decep- tion as to material composition. (a) The material composition of an industry product should not be mis- represented in any manner. Included in, but not limited to, representations which should not be made concerning material composition are the follow- ing: (1) Any representation that an indus- try product or part thereof is made of top grain leather, split leather, leather from the skin or hide of a certain ani- mal, vinyl, plastic, brass or other metal, or any other material, when such is not the fact. (2) Any representation that an indus- try product is made wholly or substan- tially of a particular material when such is not the fact. (3) Any trade name, coined name, trademark or other word, term or rep- resentation which has the capacity and tendency to convey the impression that an industry product is made in whole or in part from the skin or hide of an animal, or that material in the product is leather, split leather, vinyl, plastic, or other material, when such is not the fact. Also any stamping, tag, § 247.2 label, or other device, in the shape of an animal silhouette, used in connec- tion with an industry product having the appearance of leather but which is not wholly or substantially made from the skin or hide of such an animal should not be used. (4) Any trade name, coined name, trademark or other word, term or rep- resentation that has the capacity and tendency to convey the impression that an industry product is made in’ whole or in part from the skin or hide of an animal which in fact is nonexist- ent. (b) In some instances the failure to disclose certain pertinent facts con- cerning the material composition of an industry product may have the capac- ity and tendency to mislead or deceive purchasers. Generally such instances involve split leather which has the ap- pearance of being top grain leather, or nonleather material which has the ap- pearance of being leather, or leather which has been processed to simulate a different kind of leather. Included in, but not limited to, disclosures which should be made concerning material composition are the following: (1) Disclosure should be made of the split leather content of an industry product or part thereof if the split leather is visible or if any representa- tion is made as to composition thereof. NOTE: Split leather should be considered as that leather which results from the splitting of hides or skins into two or more thicknesses, other than the grain or hair side. (2) Disclosure should be made con- cerning the material composition of an industry product or part thereof which is made of a nonleather material hav- ing the appearance of leather. Such dis- closure may either state that the ma- terial is not leather or describe the general nature of the material in a manner that would clearly show that it is not leather. Thus, some examples of the manner in which such material may be described are: Nonleather Imitation Leather Simulated Leather Vinyl Vinyl Coated Fabric Plastic 62 16 CFR Ch. I (1-1-95 Edition) NOTE: Nonleather materials which have the appearance of leather and which pri- marily contain ground, pulverized or shred- ded leather, are subject to paragraph (b)(2) of this section. Such materials may be de- scribed as “Nonleather’, “Imitation Leath- er” or “Simulated Leather’ or as “Ground Leather’, ‘“‘Pulverized Leather’ or ‘‘Shred- ded Leather’, as the case may be. When nonleather material has been processed to simulate a particular kind of leather, such as alligator leather, any representation as may be made concerning the simulated appearance of the product should be immediately accompanied by the disclosure relating to the nonleather composition of the product. Some examples of the manner in which such material may be de- scribed are: “Not Leather Simulated Alligator Grain” “Plastic with Imitation Alligator Grain” (3) Disclosure should be made of the kind of leather of which an industry product or part thereof is made when the leather has been embossed, dyed, or otherwise processed to simulate the ap- pearance of a different kind of leather. Thus, a product made wholly of top grain cowhide which has been proc- essed to simulate alligator may be de- scribed as: “Top Grain Cowhide”’ Any additional representation as may be made concerning the simulated ap- pearance of the product should be im- mediately accompanied by the disclo- sure relating to the actual kind of leather in the product. An example of the manner in which such a product may be described is: “Top Grain Cowhide Simulated Alli- gator Grain” (4) Disclosure should be made that any material in an industry product is backed with another kind of material when the backing is not apparent upon casual inspection of the product, or when representations are made which in the absence of such disclosure would be deceptive as to composition of the product. Some examples of the manner in which such material may be rep- resented are: “Top Grain Cowhide Backed with Split Cowhide” Federal Trade Commission “Split Cowhide Backed with Simulated Leather” “Vinyl Backed with Other Material” If the backing material is visible and is split leather, nonleather material hav- ing the appearance of leather, or leath- er processed to simulate a different kind of leather, disclosure should be made consistent with paragraphs (b) (1), (2), and (3) of this section. (5) Disclosure as to the composition of an industry product, composed of more than one kind of leather or com- posed of leather and nonleather mate- rial having the appearance of leather, should clearly indicate the part to which the representation is applicable. Thus, some examples of the manner in which products composed of top grain cowhide except for the handles have the appearance of leather may be de- scribed are: “Top Grain Cowhide with Handle of Simulated Leather” “Top Grain Cowhide with Plastic Han- dle”’ “Top Grain Cowhide with Split Leather Handle” [Guide 2] §247.3 Form of disclosure as to mate- composition. All disclosures under §247.2 of this part should appear in the form of a stamping on the product, or on a tag, label, or card attached thereto, and be affixed with such degree of permanence as to remain on or attached to the product until it is received by the consumer purchaser. All such disclo- sures on industry products shall also appear in all advertising of the prod- ucts irrespective of the media used whenever statements, representations or depictions appear in such advertis- ing which in the absence of such disclo- sures would have the capacity and tendency to create a false impression that the products, or parts thereof, are of a certain kind of composition. The disclosures affixed to products and made in advertising should be of such conspicuousness and clarity as to be noted by purchasers and prospective purchasers casually inspecting the products or casually reading, or listen- ing to, such advertising. A disclosure made in connection with any such statement, representation or depiction 63 § 247.6 should be in close conjunction there- with. [Guide 3] §247.4 Misrepresentation as to aniline finish, graining, embossing, and processing. A representation should not be made that an industry product has been: (a) Colored, finished, or dyed with an- iline dye when such is not the fact; or (b) Dyed, embossed, grained, proc- essed, finished, or stitched in a certain manner when such is not the fact. (Guide 4] §247.5 Misuse of terms such as roof’, “Scratchproof”’, “Scuff Resistant”, and “Scratch Resistant”. (a) An industry product should not be represented as “Scuffproof’, “Scratchproof’, or as not subject to wear in any other respect, unless the outer surface of the product is immune to scuffing, scratches, or is in fact not subject to wear as represented. (b) An industry product should not be represented as “Scuff Resistant’’, “Scratch Resistant’, or as resistant to wear in any other respect, unless the surface of the product is in fact mean- ingfully and significantly resistant to scuffing, scratches, or to wear as rep- resented. [Guide 5] $247.6 Deceptive pricing. Members of the industry should not represent directly or indirectly in ad- vertising or otherwise that an industry product may be purchased for a speci- fied price, or at a saving, or at a re- duced price, when such is not the fact; or otherwise deceive purchasers or pro- spective purchasers with respect to the price of any product offered for sale; or furnish any means of instrumentality by which others engaged in the sale of industry products may make any such representation. NOTE: The Commission’s Guides Against Deceptive Pricing furnish additional gutid- ance respecting price savings representa- tions and are to be considered as supplementing this section. See Part 233 of this chapter for the Guides Against Decep- tive Pricing. (Guide 6] § 247.7 §247.7 Discriminatory prices, rebates, discounts, etc. NOTE: § 247.7 is interpretive of sections 2 (a) and (b) of the amended Clayton Act. (a) Industry members, engaged in commerce, in the course of such com- merce, should not grant or allow, se- cretly or openly, directly or indirectly, any rebate, refund, discount, credit, or other form of price differential, where such rebate, refund, discount, credit, or other form of price differential effects a discrimination in price between dif- ferent purchasers of goods of like grade and quality, where either or any of the purchases involved therein are in com- merce, and where the effect thereof may be substantially to lessen com- _ petition or tend to create a monopoly in any line of commerce, or injure, de- stroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimina- tion, or with customers of either of them: Provided, however, (1) That the goods involved in any such transaction are sold for use, con- sumption, or resale within any place under the jurisdiction of the United States, and are not purchased by the U.S. Government, State and local gov- ernment entities, schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit, as supplies for their own use; (2) That nothing contained in this section shall prevent differentials which make only due allowance for dif- ferences in the cost of manufacture, sale, or delivery resulting from the dif- fering methods or quantities in which industry products are sold or delivered to different purchasers; NOTE: Cost justification under the above proviso (2) depends upon savings in cost based on all facts relevant to the trans- actions under the terms of such proviso. For example, if a seller regularly grants a dis- count based upon the purchase of a specified quantity by a single order for a single deliv- ery, and this discount is justified by cost dif- ferences, it does not follow that the same discount can be cost justified if granted to a purchaser of the same quantity by multiple orders or for multiple deliveries. (3) That nothing contained in this section shall prevent persons engaged in selling goods, wares, or merchandise 64 16 CER Ch. | (1-1-95 Edition) in commerce from selecting their own customers in bona fide transactions and not in restraint of trade; (4) That nothing contained in this section shall prevent price changes from time to time where made in re- sponse to changing conditions affecting the market for or the marketability of the goods concerned, such as but not limited to actual or imminent deterio- ration of perishable goods, obsoles- cence of seasonal 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 competitor or a greater promotional allowance or other service or facility paid for or furnished by a competitor. NOTE: ‘‘Meeting competition in good faith’ is an affirmative defense which may be un- dertaken by a supplier charged with a viola- tion of subsection (a), (d), or (e) of section 2 of the amended Clayton Act who can defend his actions by establishing that his lower price or granting of disproportionate pro- motional allowance of other service or facil- ity was made in good faith to meet an equal- ly low price of a competitor or a greater pro- motional allowance or other service or facil- ity paid for or furnished by a competitor. This defense, however, is subject to impor- tant limitations. For instance, it is insuffi- cient to defend a charge of violating sub- section (a), (d) and (e) of section 2 of the amended Clayton Act solely on the basis that competition in a particular industry is very keen, requiring that special prices or al- lowances be given to some customers if a seller is ‘‘to be competitive.” (b) The following are examples of price differential practices to be con- sidered as subject to the provisions of this section when involving goods of like grade and quality which are sold for use, consumption, or resale within any place under the jurisdiction of the United States, and which are not pur- chased by the U.S. Government, State and local government entities, schools, colleges, universities, public libraries, churches, hospitals, and charitable in- stitutions not operated for profit, as supplies for their own use, and when— (1) The commerce requirements spec- ified in this section are present; and (2) The price differential has a rea- sonable probability of substantially lessening competition or tending to Federal Trade Commission create a monopoly in any line of com- merce, or of injuring, destroying, or preventing competition with the indus- try member or with the customer re- ceiving the benefit of the price dif- ferential, or with customers of either of them; and provided that— (3) The price differential was not jus- tified by cost savings (see paragraph (a)(2) of this section); or (4) The price differential was not made in response to changing condi- tions affecting the market for or the marketability of the goods concerned (see paragraph (a)(4) of this section); or (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 1. At the end of a given period an industry member grants a discount to a cus- tomer equivalent to a fixed percentage of the total of the customer’s purchases during such period and fails to grant a discount of the same percentage to other customers on their purchases during such period. Ezample 2. An industry member sells hand- bags to one or more of his customers at a higher price than he charges other customers for lke merchandise. It is immaterial whether or not such discrimination is ac- complished by misrepresentation as to the grade and quality of the products sold. Example 3. An industry member sells hand- bags directly to a retailer at a lower price than he charges distributors whose retail customers compete with the favored retailer. Erample 4. An industry member pays freight on shipments to one customer and does not pay freight on shipments to another customer, or pays freight on shipments to a distributor’s customer and does not pay such freight on shipments to other distributors’ customers thereby effecting a difference in price between customers. Ezample 5. Terms of %o prox. are granted by an industry member to some customers on handbags purchased by them from the in- dustry member. Another customer or cus- tomers are, nevertheless, allowed to take an additional discount when making payment to the industry member within the time pre- scribed or granted an extended period of time within which to avail themselves of the originally offered discount. Ezample 6. An industry member invoices handbags to all his customers at the same price but supplies additional quantities of such goods at no extra charge to one or more, but not to all, such customers; or sup- plies other goods or premiums to one or more, but not to all, such customers for which he makes no extra charge and which § 247.8 effects an actual price difference in favor of certain of his customers. NOTE: Functional discounts. Neither this section, nor section 2(a) of the Clayton Act, as amended, of which this section is interpre- tive, expressly permits or prohibits the granting of functional discounts. The propri- ety of such discounts is contingent, prin- cipally, on whether they may substantially lessen competition or tend to create a mo- nopoly. Ordinarily, however, a seller may grant a lower price to wholesalers than to re- tailers to the extent that such wholesalers resell to retailers, without such effects as may substantially lessen competition or tend. to create a monopoly. But if such wholesalers also sell at retail, in competi- tion with other of the seller’s retail cus- tomers, they may not properly be granted a price lower than the prices granted to com- peting retailers on that portion of the goods they sel at retail. [Guide 7) §247.8 Advertising or promotional al- lowances, or services or facilities. (a) Advertising or promotional allow- ances. No member of the industry en- gaged in commerce should pay or con- tract 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 fa- cilities furnished by or through such customer in connection with the proc- essing, handling, sale, or offering for sale of any industry products manufac- tured, sold, or offered for sale by such member, unless such payment or con- sideration is offered to and made avail- able on proportionally equal terms to all other customers competing in the distribution of the seller’s products of like grade and quality. (b) Services or facilities. No member of the industry engaged in commerce should discriminate in favor of one pur- chaser against another purchaser or purchasers of industry products bought for resale, with or without processing, by contracting to furnish or furnishing, or by contributing to the furnishing of, any services or facilities connected with the processing, handling, sale, or offering for sale of such products unless such services or facilities are offered to and made available on proportionally equal terms to all other customers competing in the distribution of the § 247.9 seller’s products of like grade and qual- ity. NOTE 1: The ‘“‘meeting competition in good faith” defense which is set forth in the note following paragraph (a)(5) of §247.7 is also ap- plicable to provisions of both paragraphs (a) and (b) of this section. NOTE 2: For farther guidance in this area see Part 240 of this chapter for the Commis- sion’s Guides for Advertising Allowances and Other Merchandising Payments and Serv- ices. (Guide 8] §247.9 Inducing or receiving illegal discrimination in price, advertis or promotional allowances, or serv- ices or facilities. NOTE: §247.9 is interpretive of section 2(f) of the amended Clayton Act and of section 5 of the Federal Trade Commission Act, as amended. (a) Industry members engaged in commerce, in the course of such com- merce, should not knowingly induce or receive a discrimination in price, ad- vertising or promotional allowances, or services or facilities, as reflected in §§ 247.7 and 247.8 of this part. (b) The following are examples of in- ducing or receiving discriminations in ‘price, advertising or promotional al- jowances, or services or facilities, to be considered as subject to this section when the requisites of an improper dis- crimination on the part of the seller as reflected in §§ 247.7 and 247.8 of this part are present and the party receiving the discriminations knows or has reason to know that the discriminations are ille- gal. ' Ezample 1. An industry member purchases handbags purportedly for resale to retailers, and is charged a lower price than the seller charges other customers for handbags which they resell at retail; but the member then transfers such handbags to another part of its business where they are resold at retail, thereby receiving a discrimination in price which is covered in §247.7 of this part. Example 2. An industry member induces suppliers to contribute sums of money to de- fray some or all of the costs of advertising sponsored by such member and designed to promote the sale of such suppliers’ handbags in its place of business, when the industry member knows or should know that allow- ances for such purpose are not made avail- able on proportionally equal terms by the same suppliers to other customers competing with the favored member, thereby receiving 66 16 CFR Ch. | (1-1-95 Edition) a discrimination in promotional allowances subject to the provisions reflected in §247.8 of this part. (Guide 9] PART 248—GUIDES FOR THE BEAU- TY AND BARBER EQUIPMENT AND SUPPLIES INDUSTRY Sec. 248.0 Definitions. 248.1 Misrepresentation in general. 248.2 Misrepresentation as to character of business. 248.38 Deceptive plaques and certificates. 248.4 Deceptive pricing. 248.5 Deceptive use and imitation of trade or corporate names, trademarks, etc. 248.6 False invoicing. 248.7 Defamation of competitors or false disparagement of their products. 248.8 Push money. 248.9 Enticing away employees of competi- tors. 248.10 Inducing breach of contract. 248.11 Exclusive deals. 248.12 Commercial bribery. 248.13 Discriminatory prices, rebates, dis- counts, etc. 248.14 Advertising or promotional allow- ances, or services or facilities. 248.15 Inducing or receiving an illegal dis- crimination in price, advertising or pro- motional allowances, or services or fa- cilities. AUTHORITY: Secs. 5, 6, 38 Stat. 719, as amended, 721; 15 U.S.C. 45, 46: 49 Stat. 1526; 15 U.S.C. 18, as amended. SOURCE: 33 FR 11987, Aug. 23, 1968, unless otherwise noted. $248.0 Definitions. As used in this part the terms indus- try products, industry member, beauty salon, beauty school, beauty clinic, cos- metology, hairdressing, barber shop, and barber school shall have the following meanings, respectively: (a) Industry products. Items used by or marketed through barber shops, bar- ber schools, beauty parlors, beauty sa- lons, beauty schools and beauty clinics. (Such products embrace a wide range of beauty and barber preparations; also the many articles or items of equip- ment, furnishings and supplies for such aforementioned establishments.) (b) Industry member. Any person, firm, corporation, organization, barber shop, beauty salon, beauty school, beauty clinic or similar establishment engaged