Blueprint And Diazotype Coaters Industry

16 CFR Part 28 · Trade practice rules · in the Code of Federal Regulations 1959-1977 (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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1977 CFR · Earliest edition: 1959 CFR

Text (1977 edition, OCR)

Chapter I—Federal Trade Commission

nopolistic practice or through combina-
tion, conspiracy, coercion, boycott,
threats, or any other unlawful means,
directly or indirectly, to interfere with a
competitor’s right to purchase his raw
materials and suppHes from whomsoever
he chooses, or to sell his product to
whomsoever he chooses.

§ 27.20 Consignment distribution.

(a) It is an unfair trade practice for
any member of the industry to employ
the practice of shipping industry prod-
ucts on consignment without the express
request or prior consent of the pur-
chasers.

(b) It is an unfair trade practice for
any member of the industry to employ
the practice of shipping industry prod-
ucts on consignment or pretended con-
signinent for the purpose and with the
effect of artificially clogging or closing
trade outlets and unduly restricting
competitors’ use of said trade outlets in
geting their products to purchasers
through regular channels of distribution,
thereby injuring, destroying, or prevent-
ing competition or tending to create @
monopoly or unreasonably to restrain
trade.

(c) Nothing in this section shall be
construed to authorize any understand-
ing or agreement, combination or con-
spiracy, or planned common course of
action by and between industry mem-
bers, mutually to conform or restrict
their practice of shipping goods on con-
signment with the intent or effect of
lessening competition.

PART 28—BLUEPRINT AND DIAZO-
TYPE COATERS INDUSTRY

Sec.
28.0 The industry defined.
Group I

28.1 Deception (general).

28.2 False and misleading price quotations,
ete.

238.8 Deceptive invoicing.

28.4 Substitution of products.

28.5 Prohibited sales below cost.

28.6 Commercial bribery.

28.7 Defamation of competitors or false
disparagement of their products.

28.8 Procurement of competitors’ confi-
dential information.

28.9 Enticing away employees of com-

petitors,

§ 28.9

Sec,
28.10 Prohibited forms of trade restraints
(unlawful price fixing, etc.).
28.11 Exclusive deals.
28.12 Prohibited discrimination.
AvutrHorITy: The provisions of this Part 28
issued under secs. 6, 5, 38 Stat. 721, 719; 15
U.S.C. 46, 45, unless otherwise noted.
Sovrce: The provisions of this Part 28 ap-
pear at 21 F.R. 4010, June 12, 1956, unless
otherwise noted.

§ 28.0 The industry defined.

The industry to which these trade
practice rules have application consists
of persons, firms, corporations, and or-
ganizations engaged in the coating and
sale of blueprint and/or diazotype light-
sensitive paper, cloth, film, or other
material, used for reproducing engineer-
ing and architectural drawings, designs,
formulae, and office or business com-
munications.

Group I
§ 28.1- Deception (general).

It is an unfair trade practice to seil,
offer for sale, or distribute any industry
product, or promote the sale or distribu-
tion thereof, under any representation
or by any method or under any circum-
stance or condition which has the capac-
ity and tendency or effect of misieading
or deceiving purchasers or prospective
purchasers:

(a) With respect to the construction
coinposition, design, strength, or dura-
bility of any industry product; or

(b) With respect to @ process or tech-
nique used in the preparation, fabrica-
tion, or coating of any industry product;
or

(c) With respect to the materials used
in the preparation, fabrication, or coat-
ing of any industry product; or

(d) Which is false, misleading, or de-
ceptive in any other materiai respect.

Nore: Dlustrative of the type of misrep-
resentation inhibited by this section is the
practice of an industry member advertising
or otherwise claiming that a paper contains

a certain percentage of rag, or is of a certain
basis weight, when such is not the fact.

§ 28.2 False and misleading price quo-
tations, etc.
The publishing or circulating to pur-
chasers or prospective purchasers by any
member of the industry of faise or mis-

315


§ 98.3

leading price quotations, price lists, or
terms or conditions of sale, with the ca-
pacity and tendency or effect of thereby
misleading or deceiving purchasers or
prospective purchasers, is an unfair trade
practice.
§ 28.3 Deceptive invoicing.
Withholding from or inserting in in-
voices any statement or information by
reason of which omission or insertion a
false, inaccurate or incomplete record is
made, which has the capacity and tend-
ency or effect of deceiving purchasers,
prospective purchasers, or the consuming
public in any material respect, is an
unfair trade practice.

§ 28.4 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 substitution has the capacity
and tendency or effect of misleading or
deceiving the purchasing or consuming
public, by:

(a) Shipping or delivering industry
products which do not conform to sam-
ples submitted, to specifications upon
which the sale is consummated, or to rep-
resentations made prior to securing the
order, without advising the purchaser of
the substitution and obtaining his con-
sent thereto prior to making shipment or
delivery; or

(b) Falsely representing the reason
for marking a substitution.

§ 28.5 Prohibited sales below cost.

(a) The practice of selling products of
the industry at a price less than the cost
there of 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 stifie competition or
tend to create a monopoly, is an unfair
trade practice.

(b) This section is not to be construed
as prohibiting all sales below cost, but
only such selling below the selier’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,
of stifle competition or to create a mo-
nopoly. Among the situations in which
the requisite purpose or intent wouid
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

Title 16—Commerclal Practices

deterioration is imminent; (3) of obso-
lescent goods; (4) made under judicial
process or (5) made in bona fide dis-
continuance of business in the goods
concerned.

(c) 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 determined by an
industry cost survey or some other
method. It consists of the total outlay
or expenditure by the seller in the acqui-
sition, production. and distribution of
the products involved, and comprises all
elements of cost such as labor, material,
depreciation, taxes (except 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, proc-
essing, preparation for marketing, sale,
and delivery of the products. Not to be
included are dividends or interest on
borrowed or invested capital, or non-
operating losses, such as fire losses and
losses from the sale or exchange of cap-
ital assets. Operating cost should not
be reduced by items of nonoperating in-
come, such as income from investments,
and gain on the sale of capital assets.

(ad) Nothing in this section shall be
construed as relieving an industry mem-
ber from compHance with any of the re-
quirements of the Robinson-Patman Act.

§ 28.6 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 oer anything
of value to agents, employees, or repre-
sentatives of customers or prospective
customers, or to agents, employees, or
representatives of competitors’ customers
or prospective customers, without the
knowledge of their employers or princi-
pals, as an inducement to influence their
employers or principals to purchase or
contract to purchase products manufac-
tured 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 contract-
ing to deai with competitors.

§ 28.7 Defamation of competitors or
false disparagement of their
products.

It is an unfair trade practice:

(a) To defame competitors by falsely
imputing to them dishonorable conduct,

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Chapter |—Federal

inability to perform contracts, question-
able credit standing, or by other false
representations; or

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

§ 28.8 Procurement of competitors’ con-
fidential information.

It is an unfalr trade practice for any
member of the industry to obtain infor-
mation concerning the business of a
competitor by bribery of an employee or
agent of such competitor, by false or
misleading statements or representa-
tions, by the impersonation of one in au-
thority, or by any other unfair means
and to use the information so obtained
in such manner as to injure sald
competitor in his business or to sup-
press competition or unreasonably re-
strain trade.

§ 28.9 Enticing away
competitors.

Knowingly enticing away employees or
sales representatives of competitors
under any circumstance having the ca-
pacity and tendency or effect of sub-
stantially injuring or lessening present
or potential competition is an unfair
trade practice: Provided, That nothing
in this section shall be construed as pro-
hibiting employees from seeking more
favorable employment, or as prohibiting
employers from hiring or offering em-
ployment to employees of competitors in
good faith and not for the purpose of in-
juring, destroying, or preventing com-
petition.

§ 28.10 Prohibited forms of trade re-
straints (unlawful price fixing, etc.).*

It is an unfair trade practice for any
member of the industry, either directly

employees of

1The inhibitions of this section are subject
to Public Law 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 con-
tract or agreement with a buyer thereof
which establishes 3 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
@ransactions under the laws of the State,

Trado Commission § 28.12

or indirectly, to engage in any planned
common 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 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.

§ 28.11 Exclusive deals.

It is an unfair trade practice for any
member of the industry to contract to
sell or sell any industry product, or fix a
price charged therefor, or discount from,
or rebate upon, such price, on the condi-
tion, agreement, or understanding that
the purchaser thereof shall not use or
deal in the products of a competitor or
competitors of such industry member,
where the effect of such sale or contract
for sale, or of such condition, agreement,
or understanding, may be to substan-
tally lessen competition or tend to create
& monopoly in any line of commerce.

Nore: The following is an example of a
practice violative of this section: Coater A
sells blueprint or diazotype sensitized mate-
rial to B with an understanding that if B
purchases his requirements of such material
exclusively from A, A will maintain B’s blue-
print or dlazotype reproduction equipment,
and there is a reasonable probability that the
effect of such arrangement will substantially
lessen competition or tend to create a mo-
nopoly in the sale of industry products. (See
also Note 1 to paragraph (d) of § 28.12.)

§ 28.12 Prohibited discrimination.’

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

Territory, or territorial jurisdiction in which
the resale is to be made or to which the
commodity is to be transported for such
regale, and when such contract or agreement
is 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.

*As used in this section, the word "com-
merce” means “trade or commerce among
the several States and with foreign nations,
or between the District of Columbia or any
Territory of the United States and any Btate,
Territory, or foreign nation, or between any
insular possessions or other places under the

Footnote continued on next page.

317


§ 28.12

etc., which effect unlawful price discrimi-
nation. 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,
refund, discount, credit, or other form of
price differential, effects a discrimination
in price between different purchasers of
goods of like grade and quality, where
either or any of the purchases involved
therein are in commerce. and where the
effect thereof may be substantlally to
lessen competition or tend to create a
monopoly in any Hne of commerce, or to
injure, destroy, or prevent competition
with any person who either grants or
knowingly receives the benefit of such
discrimination, or with cutomers of
elther 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 schools,
colleges, universities, public Ubraries,
churches, hospitals, or charitable institu-
tions not operated for profit, as supplies
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, sale,
or delivery resulting from the different
methods or quantities tn which such
commodities are to such purchasers sold
or delivered;

(3) That nothing contained in this
section shall prevent persons engaged in
selling goods, wares, or merchandise in
commerce from selecting their own cus-
tomers 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 made In re-
sponse to changing conditions affecting
the market for or the marketability of
the goods concerned, such as but not
Hmited to obsolesence of seasonal goods,

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 Columbia or any Ter-
ritory or any insular possession or other place
under the jurisdiction of the United States.”

Title 16—Commercial Practices

actual or imminent deterioration of
handling, sale, or offering for sale of any
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
(c) and (d) of this section).

Notes: (1) Cost justification under the
proviso to this section depends upon net
savings in cost based on all facts relevant to
the transactions under the terms of subpara-
graph (2) of this paragraph. For example,
if a seller regularly grants @ discount based
upon the purchase of a specified quantity by
a single order for a single delivery, and this
discount is justified by cost differences, 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.

(2) In complaint proceedings, justification
of price differentials under subparagraphs
(2), (4) and (5) of this paragraph 1s a matter
of affirmative defense to be established by the
person or concern charged with price dis-
crimination.

(b) Prohibited brokerage and commis-
sions. It is an unfair trade practice for
any member of the industry engaged in
commerce, in the course of such com-
merce, to pay or grant, or to receive or
accept, anything of value as a commis-
sion, brokerage, or other compensation,
or any ailowance 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 sub-
ject to the direct or indirect control, of
any party to such transaction other than
the person by whom such compensation
is so granted or paid.

(c) Prohibited advertising or pro-
motional 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 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-

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Chapter I—Federal Trade Commission

tomer in connection with the processing,
products or commodities manufactured,
sold, or offered for sale by such member,
uniess such payment or consideration is
available on proportionally equal terms
to all other customers competing in the
Gistribution of such products or com-
modities.

(d) Prohibited discriminatory serv-
ices or facilities. It is an unfair trade
practice for any member of the industry
engaged in commerce to discriminate in
favor of one purchaser against another
purchaser or purchasers of a commodity
brought for resale, with or without proc-
essing, by contracting to furnish or fur-
nishing, or by contributing to the fur-
nishing of, any services or facilities con-
nected with the processing, handling,
sale, or offering for sale of such commod-
ity so purchased upon terms not ac-
corded to all competing purchasers on
proportionally equal terms.

Nore 1: Illustrative of the type of discrim-
ination inhibited by this section is the prac-
tice by an industry member, in connection
with the sale of industry products, of servic-
ing or maintaining blueprint or diazotype
reproduction equipment used by a purchaser
of blueprint or dlazotype sensitized material
bought for resale, with or without processing,
when such services or maintenance are not
accorded to all competing purchasers on pro-
portionally equal terms. (See also the note to
§ 28.11.)

Nore 2: Nothing in paragraph (d) of this
section shall be construed as inhibiting ful-
fillment by an industry member, who is a
manufacturer of reproduction equipment, of
the obligations of expressed or implied war-
ranties attached to the equipment of his
manufacture.

(e) Inducing or receiving an illegal dis-
crimination 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 foregoing provisions
of this section.

(f) Purchase by U.S. Government—
Applicability of Robinson-Patman Anti-
discrimination Act to same. In an opin-
jon submitted to the Secretary of War
under date of December 28, 1936, the U.S.
Attorney General advised that the
Robinson-Patman Antidiscrimination
Act “is not applicable to Government
contracts for supplies.” (38 Opinions,
Attorney General 539.)

§ 30.0
PART 30—PLASTICS HOUSEWARES

INDUSTRY
Sec.
30.0 Definitions.
Group I
30.1 Misrepresentation and deception in
general.
30.2 Misrepresenting products as conform-
ing to standard.
30.3 Misuse of terms “‘close-outs,” “discon-
tinued iines,” “special bargains,” etc.
30.4 Substitution of products.
30.5 Deceptive use and imitation of trade
or corporate names, trade-marks, etc.
30.6 Deceptive invoicing.
30.7 Fictitious prices, price lists, etc.
30.8 Guarantees, warranties, etc.
30.9 Use of lottery schemes, etc.
30.10 Prohibited forms of trade restraints
(unlawful price fixing, etc.).
30.11 Prohibited sales below cost.
80.12 Prohibited discrimination.
30.13 Lifting of stocks.
30.14 Defamation of competitors or false
disparagement of their products.
30.15 Procurement of competitors’ confiden-
tial information by unfair means
and wrongful use thereof.
30.16 Enticing away employees of competi-
tors.
30.17 Commercial bribery.
80.18 Unlawful interference with competi-
tors’ purchases or sales.
80.19 Exclusive deals.
$0.20 Aiding or abetting use of unfair trade

practices.

AvrsHoriry: The provisions of this Part 30
issued under secs. 6, 5, 38 Stat. 721, 719;
15 U.S.C. 46, 45, unless otherwise noted.

Source: The provisions of this Part 30 ap-
pear at 21 F.R. 4895, June 22, 1956, unless
otherwise noted.

§ 30.0 Definitions.

(a) As used in this part, the term
“industry products” means all plastics
housewares including, but not limited to,
articles such as the following: Bowls,
breadboxes, butter dishes, cake dishes,
canister sets, cheese slicers, clothesline
reels, clothespins, coasters, coat hangers,
cookie jars, defroster trays, egg trays,
flavor servers, forks, funnels, knives,
measuring spoons, napkin holders, neck-
tie racks, paper-towel holders, potato
mashers, refrigerator boxes, refrigerator
dishes, salt and pepper shakers, scoops,
scourers, shoe racks, sink strainers, sil-
verware trays, soap dishes, straws, tea
strainers, toiletpaper holders, towel racks
and holders, tumblers, utility trays, and

819