Tire And Tube Repair Material Industry
16 CFR Part 48 · Trade practice rules · in the Code of Federal Regulations 1960-1977 (11 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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: 1960 CFR
Text (1977 edition, OCR)
Chapter I—Federal Trade Commissien
other than the person by whom such
compensation is so granted or paid.
(a) Prohibited advertising or promo-
tional allowances, etc. It is an unfair
trade practice for any member to pay or
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 vaiue 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.
Norz 1: Industry members giving allow-
ances for advertising or sales promotion
must, in addition to according same to all
competing customers on proportionally equal
terms, exercise precaution and diligence in
seeing that all such allowances are used by
the customers for such purpose. Customers
receiving such allowances must not use same
for any other purpose.
When an allowance is made ostensibly for
advertising or sales promotion of products
and is not in fact used for that purpose the
practice may constitute a price discrimina-
tion. In such case, the party giving the al-
lowance may violate paragraph (a) of this
section and the party receiving same may
violate paragraph (f) of this section.
Note 2: When an industry member gives
allowances to competing customers for ad-
vertising in a newspaper or periodical, the
fact that a lower advertising rate for equiva-
lent space ts available to one or more, but
not all, such customers, is not to be regarded
by the industry member as warranting the
retention by such customer or customers of
any portion of the allowance for his or their
personal use or benefit.
(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 fur-
nishing of, any services or facilities con-
nected with the processing, handling,
sale, or offering for sale of such com-
modity so purchased upon terms not
§ 47.18
accorded to all competing purchasers on
proportionally equal terms.
NoTE 1: See subsection (b) of section 2 of
the Clayton Act, as amended, which is set
forth in Note 1 to subparagraph (5) of para-
graph (a) of this section.
Note 2: Among the practices inhibited by
paragraph (e) of this section is that of an
industry member according to one or more
customers the privilege of returning for
credit or refund any or all of the goods pur-
chased by them and failing to accord the
same privilege to another or other competing
customers on proportionally equal terms,
in this connection see Note 2 under cost
justification proviso (2) (subparagraph (2)
of paragraph (a) of this section).
(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: Section 47.17 is based on the provi-
slons of section 2 of the Clayton Act as
amended by the Robinson-Patman Act.
§ 47.18 Aiding or abetting use of unfair
trade practices.
It is an unfair trade practice for any
person, firm or corporation to aid, abet,
coerce, or induce another, directly or in-
directly, to use or promote the use of any
unfair trade practice specified in this
part.
PART 48—TIRE AND TUBE REPAIR
MATERIAL INDUSTRY
Sec.
48.0 The industry and its products defined.
Group I
48.1 Misrepresentation and deception in
general.
48.2 Imitation or simulation of trade-
marks, trade names, etc.
48.3 Inducing breach of contract.
48.4 Commercial bribery.
48.56 Defamation of competitors or false
disparagement of their products.
48.6 False invoicing.
48.7. Prohibited forms of trade restraints
(unlawful price fixing, etc.).
48.8 False and misleading price quotations,
etc.
48.9 Prohibited sales below cost.
48.10 Exclusive deals.
48.11 Coercing purchase of one product as a
prerequisite to the purchase of
other products.
48.12 Deception by means of “bogus inde-
pendents.”
48.138 Prohibited discrimination.
399
§ 48.0
Bec.
48.14
48.16
Push money.
Deceptive representations as to earn-
ings, etc.
Substitution of products.
Enticing away employees of competi-
tors
48.16
48.17
Aiding or abetting use of unfair trade
practices.
AvrHorItY: The provisions of this Part 48
issued under secs. 6, 5, 38 Stat. 721, 719;
15 U.S.C. 46, 45, unless otherwise noted.
Source: The provisions of this Part 48
appear at 24 F.R. 10195, Dec. 17, 1959, unless
otherwise noted.
§ 48.0 The industry and its products de-
fined.
(a) Products of the industry include
tire and tube patches, plugs, boots, rub-
ber or metal replacement or repair
valves, valve cores, valve caps, patch kits,
cement, clamps, friction tape, cold
patches, vulcanizing, patches, tire chem-
ical cleaners, solvents, and similar mate-
rials and tools used in the repair or
maintenance of tires and tubes. Tread
rubber, tire liners, tire gauges, tire paint,
and equipment used in removing tires
from wheels or remounting thereon, are
not included.
(b) Members of the industry are per-
sons, firms, corporations, and organiza-
tions engaged in the manufacture and
sale, or importation and sale, of any such
products.
48.18
Group I
§ 48.1 Misrepresentation and deception
in general.
It is an unfair trade practice to use, or
cause or promote the use of, any state-
ment, representation, guarantee, or war-
ranty by way of advertising (through
newspapers, magazines, circulars, book-
lets, or any other medium), labeling of
containers, descriptions in catalogs, oral
representations, or otherwise, which has
the capacity and tendency or effect of
misleading or deceiving purchasers,
prospective purchasers, or the consum-
ing public with respect to the grade,
quality, quantity, substance, character,
origin, type, size, preparation, manufac-
ture, or distribution of any product of
the industry, or of the character, per-
manence, or effectiveness of the repairs
that can be made therewith.
§ 48.2 Imitation or simulation of trade-
marks, trade names, etc.
The imitation or simulation of the
trade-marks, trade names, brands, or
Title 16—~Commercial Practices
labels of competitors, with the capacity
and tendency or effect of misleading or
deceiving purchasers, prospective pur-
chasers, or the consuming public, is an
unfair trade practice.
§ 48.3 Inducing breach of contract.
(a) Knowingly inducing or attempting
to induce the breach of existing lawful
contracts between competitors and their
customers or between competitors and
their suppliers, or interfering with or
obstructing the performance of any such
contractual duties or services, under any
circumstance having the capacity and
tendency or effect of substantially injur-
ing 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
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.
§ 48.4 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 per-
mit or cause to be given, money or any-
thing of value to agents, salesclerks,
employees, or representatives of cus-
tomers or prospective customers of an
industry member, without the knowledge
of the employers or principals of such
agents, salesclerks, employecs, or repre-
sentatives, as an inducement:
(a) To influence such employers or
principals to purchase or contract to
purchase products manufactured or sold
by the industry member; or
(b) 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
(c) For the purpose of causing said
agents, salesclerks, employees, or repre-
sentatives to push and promote the re-
sale of the industry member’s products
over competing products being offered
for resale by the employers or principals
of said agents, salesclerks, employees, or
representatives. (See also § 48.14.)
400
Chapter I—Federal Trade Commission
§ 48.5 Defamation of competitors or
false disparagement of their prod-
ucts.
The defamation of competitors by
falsely imputing to them dishonorable
conduct, inabilty to perform contracts,
questionable credit standing, or by other
false representations, or the false dis-
paragement of the quality, grade, origin,
use, construction, design, manufacture,
or distribution of the products of com-
petitors, or of their business methods,
selling prices, values, credit terms,
policies, or services, is an unfair trade
practice.
§ 48.6 False invoicing.
Withholding from or inserting in in-
voices or sales siips any statements or
information by reason of which omission
or insertion a false record is made,
wholly or in part, of the transactions
represented on the face of such invoices
or sales slips, with the capacity and
tendency or effect of thereby misleading
or deceiving purchasers, prospective
purchasers, or the consuming public, is
an unfair trade practice.
§ 48.7 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-
1The inhibitions of this section are sub-
ject to Public Law 542, approved July 14,
1952, 66 Stat. 632 (the McGuire Act) which
provides that wlth 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 commodlties of the same
general class produced or distributed by
others, a seller of such a commodity may
enter into a contract or agreement with a
buyer thereof which establishes a minimum
or stipulated price at which such commodity
may be resold by such buyer when such con-
tract or agreement is lawful as applied to
intrastate transactions under the laws of
the State, Territory, or territoial juisdic-
tion 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 is not between manufacturers, or
between wholesalers, or between brokers, or
between factors, or between retailers, or be-
tween persons, firms, or corporations in
competition with each other.
§ 48.9
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,
intimidation, or coercion to induce any
member of the industry or other person
or persons to engage in any such planned
common course of action, or to become
a party to any such understanding,
agreement, combination, or conspiracy.
§ 48.8 False and misleading price quota-
tions, etc. :
It is an unfair trade practice for any
industry member, in the course of or in
connection with the offering for sale,
sale, or distribution of industry prod-
ucts, to publish or circulate to or among
purchasers or prospective purchasers
false price quotations, price lists, or terms
or conditions of saie; or to publish, or
circulate among purchasers or prospec-
tive purchasers, any price quotations,
price lists, or terms or conditions of sale
which have the capacity and tendency or
effect of thereby misleading or deceiving
purchasers or prospective purchasers in
any material respect.
§ 48.9 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 pur-
pose or intent, and where the effect 1s,
or where there is a reasonable proba-
bility that the effect will be, to sub-
stantially injure, supress, or stifle
competition or tend to create a
monopoly, is an unfair trade practice.
(b) This section is not to be construed
as prohibitmg 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 a reasonable probability that the
effect will be, to substantially injure,
suppress, or stifle competition or to
create a monopoly. Among the situa-
tions in which the requisite purpose or
intent would ordinarily be lacking are
cases in which such sales were: (1) Of
obsolescent goods; (2) made under judi-
cial process; or (3) made in bona fide
discontinuance of business in the goods
concerned.
(c) As used in the foregoing para-
graphs of this section, the term “cost”
means the respective seller’s cost and not
an average cost in the industry whether
401
§ 48.10
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
acquisition, production, and distribution
of the products tnvolved, and comprises
all elements of cost such as labor, ma-
terial, 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, manufac-
ture, processing, preparation for market-
ing, sale, and delivery of the products.
Not to be included are dividends or in-
terest on borrowed or invested capital or
nonoperating losses, such as fire losses
and losses from the sale or exchange of
capital assets. Operating 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
member from compliance with any of the
requirements of the Robinson-Patman
Act.
§ 48.10 Exclusive deals.
It is an unfair trade practice for any
member of the industry engaged in com-
merce, in the course of such commerce,
to lease or make a sale or contract for
sale, of any industry product, for use,
consumption, or resale within any place
under the jurisdiction of the United
States, or fix a price charged therefor,
or discount from, or rebate upon, such
price, on the condition, agreement, or
understanding that the lessee or pur-
chaser thereof shall not use or deal in
the goods of a competitor or competitors
of the lessor or seller, where the effect
of such lease, sale, or contract for sale,
or such condition, agreement, or under-
standing, may be to substantially lessen
competition or tend to create a monopoly
in any line of commerce.
§ 48.11 Coercing purchase of one prod-
uct as a prerequisite to the purchase
of other produets.
The practice of coercing the purchase
of one or more products as a prerequisite
to the purchase of one or more other
products, where the effect may be to sub-
stantially lessen competition or tend to
create a monopoly or to unreasonably
restrain trade, is an unfair trade prac-
tice.
- Title 16—Commercial Practices
§ 43.12 Deception by means of “bogus
independents.”
It is an unfair trade practice for any
member of the industry:
(a) To represent, directly or by impli-
cation, that a certain seller of industry
products is independent of, or in com-
petition with, said member, when such
is not the fact; or
(b) To fail to disclose that any seller
of industry products is not independent
of, or not in competition with, said
member, under circumstances where the
failure to make such disclosure has the
capacity and tendency or effect of mis-
leading or deceiving purchasers or pro-
spective purchasers.
§ 48.13 Prohibited discrimination."
(a) Prohibited discriminatory prices,
rebates, refunds, discounts, etc., which
effect unlawful price discrimination. It
is an unfair trade practice for any mem-
ber of the industry engaged in commerce,
in the course of such commerce, 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 differen-
tial, 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 substantially to lessen
competition or tend to create a monopoly
in any line of commerce, or to injure,
destroy, 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
2 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 State,
Territory, or foreign nation, or between any
insular possessions or other places under
the jurisdiction of the United States, or be-
tween any such possession or place and any
State or Territory of the United States or
the District of Columbia or any foreign na-
tion, or within the District of Columbia or
any Territory or any insular possession or
other places under the jurisdiction of the
United States.”
402
Chapter I[—Federal
under the jurisdiction of the United
States, and are not purchased by schools,
colleges, universities, public libraries,
churches, hospitals, and charitable in-
stitutions 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, sale,
or delivery resulting from the differing
methods or quantities in which such
commodities are to such purchasers sold
or delivered;
Nors: 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
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.
(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 bons 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 lim-
ited to obsolescenco 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.
Nore: Subsection (b) of section 2 of the
Clayton Act, as amended, reads as follows:
“Upon proof being made, at any hearing on
@ complaint under this section, that there
has been discrimination in price or services
or facilities furnished, the burden or rebut-
ting the prima facie case thus made by
showing justification shall be upon the per-
son charged with a violation of this section,
and unless justification shall be affirmatively
shown, the Commission is authorized to
issue an order terminating the discrimina-
tion: Provided, however, That nothing herein
contained shall prevent a seller rebutting
the prima facie case thus made by showing
Trade Commission § 48.13
that his lower price or the furnishing of
services or facilities to any purchaser or pur-
chasers was made in good faith to meet an
equally low price of a competitor, or the serv-
ices or facilities furnished by a competitor.
(b) Examples of prohibited price dif-
ferential practiees. The following are
examples of price differential practices
to be considered as subject to the pro-
hibitions of paragraph (a) of this sec-
tion when involving goods of like grade
and quality which are sold for use, con-
sumption, or resale within any place
under the jurisdiction of the United
States, and which are not purchased by
schools, colleges, universities, public li-
braries, churches, hospitals, and chari-
table institutions not operated for profit,
as supplies for their own use, and when:
(1) The commerce requirements spec-
ified in paragraph (a) of this section
are present; and
(2) The price differential has a rea-
sonable probabllity of substantially les-
sening competition or tending to create
@ monopoly in any Hne 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-
temers of either of them; and
(3) The price differential ls 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 marketa-
bility of the goods concerned (see para-
graph (a) (4) of this section) ; and
(5) The fower price was not made to
meet in good faith an equally low price
of a competitor (see paragraph (a) (5)
of this section) :
Example No. 1. At the end of a given
period an industry member grants a discount
to a custcmer equivalent to a fixed percent-
age of the total of the customer’s purchases
during such period and falls to grant a dis-
count of the same percentage to other cus-
tomers on their purchases during such
period.3
Ezample No, 2. An industry member sells
goods to one or more of his customere at
a higher price than he charges other cus-
tomers for like merchandise. It is immate-
rial whether or not such discrimination ts
accomplished by misrepresentation as to the
grade and quality of the products sold.?
Ezample No. 3. A certain percentage dis-
count for payment within e specified time
is granted by an industry member to some
customers on goods purchased by them from
the industry member. Another customer or
8 See footnote on next page.
403
§ 48.13
customers are, nevertheless, allowed to take
an additional or larger discount when mak-
ing payment to the industry member within
the time prescribed.®
Ezample No. 4. An industry member sells
goods to one or more of his customers at a
lower price than he charges other customers
therefor, basing his Justification for the price
difference on the fact that the favored cus-
tomer or customers warehoused the goods
they purchased from the member.’
Example No. 5, An industry member makes
a sale of industry products to an outlet which
is one of two or more outlets jointly owned
and/or operated at a price less than the
member charges for a like sale to another
customer; or gives a rebate on the first men-
tioned sale to the parent organization own-
ing and/or operating the outlet recelving the
products so purchased and does not give
such a rebate to the other customer.’
Ezample No. 6. An industry member
makes a sale of industry products to a cus-
tomer which is affiliated with a buying
group, at a price less than the member
charges for a like sale to another customer
which ts not affiliated with a buying group;
or gives a rebate on the first mentioned sale
to the buying group organization but does
not give such a rebate to the other
customer.
Ezample No. 7. An industry member sells
to a customer, which operates as both a
warehouse distributor and a jobber, industry
products which the customer resells in its
capacity as a jobber, and the member
charges such customer a lower price therefor
than he charges other Jobbers for ke prod-
ucts. (No inference is to be drawn from thls
example that the requirements of paragraph
(a) of this section are not applicable with
respect to sales at a lower price to one pur-
chaser than to another purchaser because
such purchasers are in different distributive
levels, e.g., warehouse distributors, jobber,
retailer, etc.)#
Example No, 8 An industry member in-
voices industry products to all his customers
at the same price but supplies additional
quantities of such products at no extra
charge to one or more, but not all, such cus-
tomers; or supplies other goods or premiums
to one or more, but not all, such customers
for which he makes no extra charge and
which effects an actual price difference in
favor of certain of his customers.*®
Example No. 9. An industry member sells
industry products to one or more of his
customers at a lower price than he charges
other customers therefor, basing his justifi-
2 This 1s to be considered as an example of
@ practice which is violative of paragraph (a)
of this section only when the conditions
specified in that part of paragraph (b) of
this sectlon which precede Example No. 1
are present.
Title 16—Commercial Practices
cation for the price differences solely on the
fact that the favored customer or customers
redistribute such products to branches or
outlets which such customers own or
operate.
Example No. 10. An industry member sells
industry products to one or more of his
customers at a lower price than he charges
other customers therefor, basing his justifi-
cation for the price difference solely on the
fact that the products sold at the lower price
bear the private brand name of customers.’
Example No. 11. An industry member uses
& graduated percentage rate of discounts or
rebates to customers based upon their pur-
chases during a given period. By reason of
differing volumes of purchases customers
competing in the resale of hls products ree
celve unequal rates of discount.®
(c) 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 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 intermedi-
ary 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.
(a) Prohibited advertising or promo-
tional allowances, etc. It is an unfalr
trade practice for any member of the
industry engaged in commerce to pay
or contract for the payment of advertis-
ing 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 compensa-
tion or in consideration for any services
or facilities furnished by or through such
customer in connection with the proc-
essing, 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 proportion-
ally equal terms to all other customers
competing in the distribution of such
products or commodities.
(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
404
Chapter I—Federal Trade Commission
favor of one purchaser against another
purchaser or purchasers of a commodity
bought for resale, with or without
processing, by contracting to furnish or
furnishing, or by contributing to the
furnishing of, any services or facilities
including, but not limited to, displays,
exhibits, and promotional material con-
nected with the processing, handling,
sale, or offering for sale of such commod-
ity so purchased upon terms not accord-
ed to all competing purchasers on pro-
portionally equal terms.
Nore: See subsection (b) of section 2 of
the Clayton Act, as amended, which is set
forth in the note concluding paragraph (a)
of this section.
(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 forego-
ing provisions of this section.
§ 48.14 Push money.
It is an unfair trade practice for any
industry member to pay or contract to
pay anyithing 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
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
(da) When, because of the terms and
conditions of the agreement or under-
standing, including its duration, or the
attendant circumstances, the effect may
be substantally to lessen competition or
tend to create a monopoly; or
(e) When similar payments are not
accorded to salespersons of competing
§ 48.17
customers on proportionally equal terms
in compliance with section 2(d) and (e)
of the Clayton Act.
Note: 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.
§ 48.15 Deceptive representations as to
earnings, etc.
It is an unfair trade practice to make
false, misleading, or deceptive state-
ments or representations regarding op~
portunities for making money, or of ac-
tual or probable earnings, by agents,
jobbers, dealers, and others, handling
products of this industry.
§ 48.16 Substitution of products.
It is an unfair trade practice for a
member of the industry to make an
unauthorized substitution of products,
where such substitution has the capac-
ity and tendency or effect of mislead-
ing or deceiving purchasers, by:
(a) Shipping or delivering industry
products which do not conform to sam-
ples submitted, to specifications (in bids
or otherwise) upon which the sale is
consummated, or to representations
made prior to securing the order, with-
out advising the purchaser of the substi-
tution and obtaining his consent thereto
prior to making shipment or delivery: or
(b) Falsely representing the reason
for making a substitution.
§ 48.17 Enticing away employees of
competitors.
It is an unfair trade practice for any
member of the industry wilfully to en-
tice away employees or sales-contact
personnel of competitors with the intent
and effect of thereby unduly hampering
or injuring competitors in their business
and destroying or substantially lessen-
ing competition: Provided, That, noth-
ing in this section shall be construed as
prohibiting such persons from seeking
more favorable employment, or as pro-
hibiting employers from hiring or offer-
ing employment to employees of a com-
petitor in good faith and not for the
purpose of inflicting injury on such com-
petitor.
405
§ 48.18
§ 48.18 Aiding or abetting use of unfair
trade practices.
It is an unfair trade practice for any
Person, firm or corporation to aid, abet,
coerce, or induce another, directly or in-
directly, to use or promote the use of
any unfair practice spectfied in this part.
PART 50-——-CUT AND WIRE TACK
INDUSTRY
Sec.
60.0 The industry and its products.
60.1 Misrepresentation (general).
50.2 Misrepresentation as to character of
business.
60.3 Misrepresenting products as conform-
ing to standard.
60.4 Deception as to origin.
60.6 Guarantees, warranties, etc.
60.6 Substitution of products.
60.7 Deceptive use or imitation or simu-
jation of trade or corporate names,
trade-marks, etc.
60.8 Deceptive invoicing, etc.
60.9 Defamation of competitors or false
disparagement of their products.
50.10 Inducing breach of contract.
50.11 Enticing away employees of competi-
tors.
60.12 Commercial bribery.
60.13 Procurement of competitors’ confiden-
tial information.
60.14 Coercing purchase of one product as
& prerequisite to the purchase of
other products.
60.15 Exclusive deals.
50.16 Consignment distribution.
50.17 Prohibited sales below cost.
60.18 Prohibited forms of trade restraints
(unlawful price fixing, etc.)
60.19 Prohibited discrimination.
60.20 Aiding or abetting use of unfair trade
practices.
AUTHORITY: The provisions of this Part 60
issued under secs. 6, 5, 38 State. 721, 719;
15 U.S.C. 46, 45, unless otherwise noted.
Source: The provisions of this Part 50
appear at 23 F.R. 5630, July 25, 1958, unless
otherwise noted.
§ 50.0 The industry and its products.
(a) Products of the industry as cov-
ered by the rules in this part consist of
cut tacks and wire tacks. (Thumb tacks
are not included.)
(b) Members of the industry are per-
sons, firms, corporations, and organiza-
tions engaged in the manufacture, im-
portation, sale, offering for sale, or dis-
tribution of such products.
§ 50.1 Misrepresentation (general).
It is an unfalr trade practice for any
member of the industry to make or
Title 16—Commercial Practices
publish, or cause to be made or pub-
lished, by way of advertising, labeling, or
otherwise, any statement or representa-
tion which, directly or by implication,
has the capacity and tendency or effect
of deceiving purchasers or prospective
purchasers as to the manufacture or dis-
tribution of any industry product, or as
to the grade, quality, quantity, weight,
count per pound, composition, condition,
use, size, material, finish, holding power,
strength, origin, design, durability, per-
formance, or immunity from or resist-
ance to rust, of any such product, or
which has the capacity and tendency or
effect of deceiving purchasers or pro-
spective purchasers in any other ma-
terial respect.
§ 50.2 Misrepresentation as to character
of business.
It is an unfair trade practice for any
member of the industry, in the course of
or in connection with the offering for
sale, sale, or distribution of industry
products, to misrepresent the character,
extent, volume, or type of his business.
§ 50.3 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.
§ 50.4 Deception as to origin.
(a) It is an unfalr trade practice to
sell or offer for sale industry products
under any representation which has the
capacity and tendency or effect of de-
ceiving purchasers or prospective pur-
chasers as to the place of manufacture
thereof.
(b) It is an unfair trade practice to sell
or offer for sale industry products of
foreign manufacture without adequate
and nondeceptive disclosure of the fact
that such products were manufactured
in an {dentified foreign country, when
the failure to make such disclosure has
the capacity and tendency or effect of de-
ceiving purchasers or prospective pur-
chasers of such products. Such disclo-
sure of forelgn origin, as when required
under this section, shall be in the form
of a legible marking, stamping, or label-
ing on the outside of the containers in
which the products are sold or offered
406