Residential Aluminum Siding Industry
16 CFR Part 57 · Trade practice rules · in the Code of Federal Regulations 1966-1978 (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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1978 CFR · Earliest edition: 1966 CFR
Decisions that mention this industry's rules (3)
Text (1978 edition, OCR)
Chapter I—Federal Trade Commission
“Upon proof being made, at any hearing
on a complaint under this section, that
there has been discrimination in price or
services or facilities furnished, the burden
of rebutting the prima facie case thus made
by showing justification shali be upon the
person charged with a violation of this sec-
tion, and unless justification shall be affir-
matively shown, the Commission is autho-
rized to issue an order terminating the dis-
crimination: Provided, however, That noth-
ing herein contained shall prevent a seller
rebutting the prima facie case thus made by
showing that his lower price or the furnish-
ing of services or facilities to any purchaser
or purchasers was made in good faith to
meet an equally low price of a competitor,
or the services of facilities furnished by a
competitor.”
(b) Prohibited brokerage and com-
missions. No member of the industry
engaged in commerce, in the course of
such commerce, shall pay or grant, or
receive or accept, anything of value as
@ commission, brokerage, or other
compensation, or any allowance or dis-
count in lieu thereof, except for ser-
vices 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 intermedlary
therein where such intermediary 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.
(c) Prohibited advertising or promo-
tional allowances, etc. No member of
the industry engaged in commerce
shall 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 con-
sideration for any services or facilities
furnished by or through such custom-
er in connection with the processing,
handling, sale, or offering for sale of
any products or commodities manufac-
tured, sold, or offered for sale by such
member, unless such payment or con-
sideration is available on proportional-
ly equal terms to all other customers
competing in the distribution of such
products or commodities.
(d) Prohibited discriminatory ser-
vices or facilities. No member of the
industry engaged in commerce shall
Part 57
discriminate in favor of one purchaser
against another purchaser or purchas-
ers of a commodity bought for resale,
with or without processing, by con-
tracting to furnish or furnishing, or by
contributing to the furnishing of, any
services or facilities including, but not
limited to, displays, exhibits, and pro-
motional material connected with the
processing, handling, sale, or offering
for sale of such commodity so pur- |
chased upon terms not accorded to all
competing purchasers on proportional-
ly equal terms.
Note: See subsection (b) of section 2 of
the Clayton Act, as amended, which is set
forth in the noto concluding paragraph (a)
of this section.
(e) Inducing or receiving an illegal
discrimination in price. No member of
the industry engaged in commerce, in
the course of such commerce, shall
knowingly induce or receive a discrimi-
nation in price which is prohibited by
the foregoing provisions of paragraphs
(a) to (e) of this section. [Rule 11]
PART 57—RESIDENTIAL ALUMINUM
SIDING INDUSTRY
Sec.
57.0 Definitions.
57.1 Deception in general.
57.2 Deceptive use of ‘“‘model home’”’ repre-
sentations.
57.3 Deceptive pricing.
57.4 False gift offers in sales promotion
plans.
57.5 Deceptive claims as to the efficacy of
industry products to reduce the effects
of outside temperatures in building inte-
riors.
57.6 Bait advertising.
57.7 Deception as to nature of sales trans-
actions.
57.8 Misrepresentation as to character of
busimess.
57.9 Misuse of terms
“custom-built,” etc.
57.10. Use of the word “‘free.”
57.11 Deception as to agency status and au-
thority.
57.12 Deception as to identity of manufac-
turer or seller.
57.13 Deceptive testimonials or depictions.
57.14 Deceptive use of seais.
57.15 Misrepresenting products as con-
forming to standard.
57.16 Guarantees, warranties, etc.
57.17 Substitution of products.
57.18 Defamation of competitors or false
disparagement of their products.
“custom-made,”
369
§ 57.0
Sec.
57.19 Unfair threats of infringement suits.
57.20 Inducing breach of contract.
57.21 Procurement of competitors’ confi-
dential information.
57.22 Deceptive invoicing, etc.
57.23 Exclusive deals.
57.24 Prohibited forms of trade restraints
(unlawful price fixing, etc.).
57.25 Prohibited discrimination.
57.26 Aiding or abetting use of unfair trade
practices.
Autnonrirty: Secs. 6, 5, 38 Stat. 721, 719; 15
U.S.C. 46, 45, unless otherwise noted.
Source: 27 FR 3284, Apr. 6, 1962, unless
otherwise noted.
§57.0 Definitions.
(a) Industry products consist of alu-
minum panels and boards suitable for
use as siding for the exterior walls of
existing or new residential structures.
(b) Industry members are producers
and suppliers of aluminum from which
residential aluminum siding is made,
and who promote the sale or distribu-
tion of industry products; manufactur-
ers of fabricators or residential alumi-
num siding; jobbers, wholesalers, and
retailers of residential aluminum
siding; contractors and applicators
who sell and install residential alumi-
num siding; and manufacturers and
marketers of prefabricated homes
having aluminum siding. Those en-
gaged in the marketing of industry
products who are not agents, but who
purport to act as agents of manufac-
turers or suppliers of industry prod-
ucts are to be regarded as industry
members.
§57.1 Deception in general.
(a) It is an unfair trade practice to
sell, offer for sale, or distribute any in-
dustry product, or to promote the sale
or distribution thereof under any rep-
resentation or by any method or under
any circumstances, including failure
adequately to disclose additional rel-
evant information, which has the ca-
pacity and tendency or effect of mis-
jJeading or deceiving purchasers or pro-
spective purchasers with respect to the
construction, composition, installation,
design, finish, color or colorfastness,
size, origin, manufacturer, value, price,
quality, strength, weight, guage, dura-
bility fit alignment, ventability, or
utility of such product or any part
thereof, or the ease of application of
Title 16—Commercial Practices
such product, or the benefits to be de-
rived from the use thereof; or with re-
spect to the immunity or resistance of
such product to weather conditions,
fire, corrosion, or sag, or the need for
maintenance, repair, replacement of
all or any part of such product, or in
any other material respect.
(b) Among practices to be considered
as prohiblted by paragraph (a) of this
section are the following claims:
(1) That industry products require
no repainting or repair for the life of
the structure, or that the initial cost is
the only cost; or
(2) That the colors in which the in-
dustry products are finished will
remain unchanged or are impervious
to the elements or will last a lifetime;
or
(3) That industry products, or any
part or parts thereof, are everlasting
or are made of indestructible materi-
als; or
(4) That industry products provide
everlasting insulation; or
(5) That the thermal insulating
values of aluminum exceed that of any
other metal or other material; or
(6) That nothing can damage alumi-
num siding.
(c) The prohibitions of this section
are applicable with respect to every
species of advertisement or form of
representation, whether oral or in a
newspaper or other periodical, tele-
phone directory, sales catalog, sales
promotional literature, radio, or televi-
sion broadcast, or other media, or
whether in the form of mark, tag, or
label, affixed to or accompany, the
product. [Rule 1]
§57.2 Deceptive use of “model home” rep-
resentations.
In the sale, offering for sale, or dis-
tribution of industry products, it is an
unfair trade practice for any member
of the industry to represent to any
purchaser or prospective purchaser
that his dwelling will serve as a so-
called model home or advertising job,
or to make any other similar represen-
tation, if in connection therewith the
industry member misleads the pur-
chaser or prospective purchaser into
the belief that he will be paid a com-
mission or other compensation for any
sale which the industry member may
370
Chapter I—Federal Trade Cammission
make in the vicinity or within any
specified distance from the customer’s
home, or that the cost of the purchase
of any industry product to the custom-
er will thereby be reduced or fully
paid. (Rule 2]
§ 57.3 Deceptive pricing.
It is an unfair trade practice for any
member of the industry to represent
or imply, in advertising or otherwise,
that residential aluminum siding may
be purchased for a specified price, or
at a saving, when such is not the fact;
or that such product is being offered
for sale at a reduced price when such
is not the fact; or otherwise to receive
purchasers or prospective purchasers
with respect to the price of such prod-
ucts offered for sale; or to furnish any
means or instrumentality by which
others engaged in the sale of residen-
tial aluminum siding may make any
such representation. Among the prac-
tices prohibited by this section are:
(a) Representing or implying in ad-
vertising or otherwise that a quoted
price, whether determined on the
basis of a stated price per square foot
or otherwise, is the total cost for a
complete installation when in fact the
products sold do not include all costs
for labor and all parts and accessories
necessary for the proper function and
appearance of such installed products
(such as starter strips, door and
window trim, window head flashing,
back-up pieces and corner pieces).
(b) Representing or implying in ad-
vertising or otherwise that a specified
price for residential aluminum siding
is for any size structure (e.g., “in-
stalled on your home $: ”) when in
fact such price applies only to struc-
tures of limited size without adequate
and conspicuous disclosure of such
limitation (e.g., ‘‘$: installed on
your home when area to be covered
does not exceed 1,000 square feet” or
“installed price $ per square
foot’’).
(c) The use of pictures or illustra-
tions of large houses or structures in
connection with specified prices which
is likely to mislead purchasers or pro-
spective purchasers as to the cost of
the installation of aluminum siding, as
when the aluminum siding for the il-
§ 57.6
lustrated house would not be installed
for the specified price. [Rule 3]
Note: On December 20, 1963, the Commis-
sion adopted Guides Against Deceptive Pric-
ing which became effective January 8, 1964.
Copies thereof wili be furnished upon re-
quest.
(31 FR 11108, Aug. 20, 19667
§ 57.4 False gift offers in sales promotion
plans.
In the sale, offering for sale, or dis-
tribution of industry products, it is an
unfair trade practice for any member
of the industry to make any offer,
however disseminated or published,
that gift merchandise will be given to
persons coimnplying with certain condi-
tions unless such merchandise is given
to the persons complying with such
conditions. [Rule 4]
§ 57.5 Deceptive claims as to the efficacy
of industry products to reduce the ef-
fects of outside temperatures in build-
ing interiors.
In the sale, offering for sale, or dis-
tribution of industry products, it is an
unfair trade practice for any member
of the industry to make any represen-
tation which, directly or by implica-
tion, or through failure adequately to
disclose additional relevant informa-
tion, has the capacity and tendency or
effect of deceiving purchasers or pro-
spective purchasers as to the efficacy
of such products to effect fuel savings
or other heating costs or to reduce or
control temperature in rooms, build-
ings, etc.
Note: As used in this rule the term “rel-
evant information” has reference to the
conditions essential to effect the claimed
fuel savings or other heating costs or tem-
perature reduction or control, including, but
not limited to, the location, construction,
elevation and insulation of the building and
its exposure to the elements.
{Rule 5]
§ 57.6 Bait advertising.
(a) It is an unfair trade practice for
an industry member to offer for sale
any industry product when the offer is
not a bona fide effort to sell the prod-
uct so offered.
Note: In determining whether there has
been a violation of this rule, consideration
371
§ 57.7
will be given to acts or practices indicating
that the offer was not made in good faith
for the purpose of selling the advertised
product, but was made for the purpose of
contracting prospective purchasers and sell-
ing them a product or products other than
the product offered. Among the acts or
practices which wil] be considered in making
that determination are the following:
(a) The creation, through the initial offer
or advertisement, of a false impression of
the grade, quality, make, value, currency of
model, size, usability, or origin of the prod-
uct offered.
(b) The refusal to show, demonstrate, or
sell the product offered in accordance with
the terms of the offer.
(ce) The disparagement, by acts or words,
of the product offered.
(d) The showing, demonstrating, and in
the event of sale, the delivery, of a product
which is unusable or impractical for the
purpose represented or implied in the offer.
(e) The refusal, in the event of sale of the
product offered, to deliver such product to
the buyer within a reasonable time there-
after.
(f) The faijure to have available a quanti-
ty of the advertised product sufficient to
meet reasonably anticipated demands.
(g) The use of a sales plan or method of
compensation for salesmen or penalizing
salesmen designed to prevent or discourage
them from selling the advertised product.
(b) It is not necessary that each act
or practice set fortli above be present
in order to establish that a particular
offer is vlolative of this section. [Rule
6]
§57.7. Deception as to nature of sales
transactions.
When an industry member sells in-
dustry products at both wliolesale and
at retail in the same establishment, it
is an unfair trade practice for such m-
dustry member to sell any such prod-
ucts 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. [Rule 7]
§57.8 Misrepresentation as to character of
business.
It is an unfair trade practice for any
industry member, in the course of or
in connection with the sale of industry
products, to represent, directly or indi-
rectly, that he is a manufacturer of m-
dustry products, unless he owns and
operates or directly controls a factory
Title 16—Cammercial Practices
wherein such products are made, or in
any other manner to misrepresent the
character, extent, or type of his busi-
ness. [Rule 8]
§57.9 Misuse of terms “custom-made,”
“custom-built,” etc.
In the sale, offering for sale, or dis-
tribution of industry products, it is an
unfair trade practice for an industry
member to use the terms “custom-
made,” “custom-built,” ““made-to-
order,” or any other word or term of
similar import, as descriptive of any
industry product which has not been
made in accordance with specification
as to size, fit, quality, etc., supplied by
or on behalf of the consumer-purchas-
er prior to the manufacture or assem-
bly of the industry product, as distin-
guished from a product which is a
readymade or stock industry product.
{Rule 9]
§57.10 Use of the word “free.”
In connection with the sale, offering
for sale, or distribution of industry
products, it is an unfair trade practice
to use the word ‘‘free,’’ or any other
word or words of similar import, in ad-
vertisements or in other offers to the
public, as descriptive of an article of
merchandise, or service, whicl is not
an unconditional gift, under the fol-
lowing circumstances:
(a) When all the conditions, obliga-
tions, or other prerequisites to the re-
ceipt and retention of the “free” arti-
cle of merchandise or service offered
are not clearly and conspicuously set
forth at the outset so as to leave no
reasonable probability that the terms
of the offer will be misunderstood;
and, regardless of such disclosure:
(b) When, with respect to any article
of merchandise required to be pur-
chased in order to obtain the ‘free’
article or service, the offeror (1) in-
creases the ordinary and usual price of
such article of merchandise, or (2) re-
duces its quality, or (3) reduces tle
quantity or size thereof.
Note: The disclosure required by para-
graph (a) of this section shall appear in
close conjunction with the word “free” (or
other word or words of similar import)
wherever such word first appears in each
advertisement or offer. A disclosure in the
form of a footnote, to which reference is
372
Chapter I—Federal Trade Cammissian
made by use of an asterisk or other symbol
placed next to the word “free,” will not be
regarded as compliance.
(Rule 10]
§ 57.11 Deception as to agency status and
authority.
(a) It is an unfair trade practice for
any member of the industry to aid or
abet any person im effecting deception
of purchasers or prospective purchas-
ers as to his authority to represent
and make commitments in behalf of
such industry member.
(b) It is also an unfair trade practice
for any person engaged in the sale of
industry products to represent that he
is an agent of, or otherwise affiliated
with, a manufacturer or distributor of
such products, or that he is in a posi-
tion to transfer title to industry prod-
ucts, or to assure of the delivery and/
or installation of any such products,
when such is not the fact. [Rule 11]
§ 57.12 Deception as to identity of manu-
facturer or seller.
In the sale, offering for sale, or dis-
tribution of mdustry products, it is an
unfair trade practice for any member
of the industry to use any corporate
name, trade name, trademark, slogan,
or other means of identification,
which, by reason of its similarity with
the corporate name, trade name,
trademark, slogan, or other means of
identification used by another party,
has the capacity and tendency or
effect of deceiving purchasers or pro-
spective purchasers as to the identity
of the manufacturer or vendor of any
industry product which is sold or of-
fered for sale by the industry member.
(Rule 12)
§57.138 Deceptive testimonials or depic-
tions.
It is an unfair trade practice for a
member of the industry to use any tes-
timonial of a user of any industry
product, or of any other person, or to
use any picture or depiction thereof,
which is false or which has the capac-
ity and tendency or effect of mislead-
ing or deceivmg purchasers or prospec-
tive purchasers. [Rule 13]
§ 57.16
§ 57.14 Deceptive use of seals.
In the sale, offering for sale, or dis-
tribution of industry products, it is an
unfair trade practice for any industry
member to use a Seal or insignia of any
organization without the authoriza-
tion of that organization, or to use any
seal or insignia which is of such form
or design, or contains such wording, as
to simulate the seals or insignia which
are issued by an organization or used
with respect to other products, when
the use thereof has the capacity and
tendency or effect or deceiving pur-
chasers or prospective purchasers.
Note: Seals of approval used by mdustry
members should identify the organization
issuing and/or authorizing the use of the
seal. Such seal should be based on adequate
inspection and tests of the industry mem-
ber’s products and not otherwise contravene
the provisions of § 57.1 relatmg to deception
generally.
[Rule 14]
§ 57.15 Misrepresenting products as con-
forming to standard.
It is an unfair trade practice to rep-
resent, through advertising or other-
wise, that any product of the industry
conforms to any standard recognized
in or applicable to the industry when
such is not the fact. [Rule 15)
§ 57.16 Guarantees, warranties, etc.
(a) Advertising of products shall not
contain representations that a product
is “guaranteed” without clear and con-
spicuous disclosure of:
(1) The nature and extent of the
guarantee, and
(2) Any material conditions or limi-
tations in the guarantee which are im-
posed by the guarantor, and
(3) The manner in which the guar-
antor will perform thereunder, and
(4) The identity of the guarantor.
Representations that a product is
“guaranteed for life” or has a “‘life-
time guarantee” in addition to meet-
ing the requirements of paragraphs
(a(1), (2), (3), and (4) of this section,
shall contain a conjunctive and con-
spicuous disclosure of the meaning of
“life” or “lifetime” as used (whether
that of the purchaser, the product or
otherwise).
373
§ 57.17
(b) Guarantees shall not be used
which under normal conditions are im-
practical of fulfillment or which are
for such 2 period of time or are other-
wise of such nature as to have the ca-
pacity and tendency of misleading pur-
chasers or prospective purchasers into
the beiief that the product so guaran-
teed has a greater degree of service-
ability, durability or performance ca-
pability in actual use than is true in
fact. [Rule 16]
857.17 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
samples submitted, to specifications
(in bids or otherwise) upon which the
sale is consummated, or to representa-
tions made prior to securing the order,
without advising the purchaser of the
substitution and obtaining his consent
thereto prior to making shipment or
delivery; or
(b) Falsely representing the reason
for making a substitution.
Nore: Nothing in this rule shall be con-
strued as preventing the application of such
tolerances as are agreed upon between
buyer and seller or are otherwise deemed
reasonable and proper and where no misrep-
resentation, or deception of purchasers, is
practiced or promoted in relation to the
product or its deviation from samples or
specifications.
(Rule 17]
§ 57.18 Defamation of competitors or false
disparagement of their products.
The defamation of competitors by
falsely imputing to them dishonorable
conduct, inability to perform con-
tracts, questionable credit standing, or
by other false representations, or the
false disparagement of competitors’
products in any respect, or of their
business methods, _ selling prices,
values, credit terms, policies, or ser-
vices, is an unfair trade practice. [Rule
18)
Title 16—Cammercial Practices
$57.19 Unfair threats of
suits.
The circulation of threats of suit for
infringeinent of patents or trademarks
among custoiners or prospective cus-
tomers of competitors, not made in
good faith but for the purpose or with
the effect of thereby harassing or in-
timidating such customers or prospec-
tive customers, or of unduly hamper-
ing, injuring, or prejudicing competi-
tors in their business, is an unfair
trade practice. [Rule 19]
infringement
$57.20 Inducing breach of contract.
(a) Knowingly inducing or attempt-
ing to induce the breach of existing
lawful contracts between competitors
and their customers or their suppliers,
or interfering with or obstructing the
performance of any such contractual
duties or services, under any circum-
stance having the capacity and ten-
dency or effect of substantially injur-
ing or lessening present or potential
competition, is an unfair trade prac-
tice.
(b) Nothing in this section is intend-
ed to imply that it is improper to solic-
it the business of a customer of 2 coin-
peting industry member; nor is the
section to be construed as in anywise
authorizing any agreement, under-
standing, 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. [Rule 20]
857.21 Procurement of competitors’ confi-
dential information.
It is an unfair trade practice for any
member of the industry to obtain in-
formation concerning the business of a
coinpetitor by bribery of an employee
or agent of such competitor, by false
or misleading statements or represen-
tations, by the impersonation of one in
authority, or by any other unfair
ineans, and to use the information so
obtained so as to injure said competi-
tor in his business or to suppress com-
petition or unreasonably restrain
trade. [Rule 21]
§ 57.22 Deceptive invoicing, etc.
It is an unfair trade practice for any
inember of the industry to issue in-
374
Chapter I—Federal Trade Commissian
voices, billings, or sales slips which by
reason of misstatements therein or
omissions therefrom have the capacity
and tendency or effect of deceiving
purchasers or prospective purchasers
in any material respect. [Rule 22)
§ 57.23 Exclusive deals.
It is an unfair trade practice for any
member of the industry engaged in
commerce, in the course of such com-
merce, to lease or make a sale or con-
tract 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 purchaser thereof shall not
use or deal in the goods of a competi-
tor or competitors of the lessor or
seller, where the effect of such lease,
sale, or contract for sale, or such con-
dition, agreement, or understanding,
may be to substantially lessen compe-
tition or tend to create a monopoly in
any line of commerce. [Rule 23]
§ 57.24 Prohibited forms of trade re-
straints (unlawful price fixing, etc.).
It is an unfair trade practice for any
member of the industry, either direct-
ly or indirectly, to engage in any
planned common course of action, or
to enter into or take part in any un-
1The prohibitions of this rule are subject
to Pub. L. 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 trademark, 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 contract
or agreement with a buyer thereof which es-
tablishes a minimum or stipulated price at
which such commodity may be resold by
such buyer when such contract or agree-
ment is lawful as applied to intrastate trans-
actions under the laws of the State, Terri-
tory, or territorial jurisdiction in which the
resale is to be made or to which the com-
modity is to be transported for such resale,
and when such contract or agreement is not
between manufacturers, or between whole-
salers, or between brokers, or between fac-
tors, or between retailers, or between per-
sons, firms, or corporations in competition
with each other.
§ 57.25
derstanding, agreement, combination,
or conspiracy, with one or more mem-
bers of the industry, or with any other
person or persons, to fix or maintain
the price of any goods otherwise un-
lawfully 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. [Rule 24]
§ 57.25 Prohibited discrimination.
(a) Prohibited discriminatory prices,
or rebates, refunds, discounts, credits,
etc., which effect unlawful price dis-
crimination. It is an unfair trade prac-
tice for any member of the industry
engaged in commerce, in the course of
such commerce, to 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, ef-
fects 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 mo-
nopoly 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
discrimination, 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;
(2) That nothing contained in this
paragraph shall prevent differentials
which make only due allowance for
differences in the cost of manufacture,
sale, or delivery resulting from the dif-
fering methods or quantities in which
such commodities are to such purchas-
ers sold or delivered;
Note: “Spindling” of orders. This proviso
shall not be construed as permitting the
practice of allowing a price differential,
whether in the form of a discount, rebate,
or other form, through billing as a single
order an aggregate of the amounts of two or
375
30-034 © - 78 - 25
§ 57.25
more orders separately delivered, when such
price differential is not justified by savings
to the seller which make only due allowance
for differences in the cost of manufacture,
sale, or delivery resulting from the differing
methods or quantities in which such prod-
ucts are to such purchasers sold or deliv-
ered.
(3) That nothing contained in the
section shall prevent persons engaged
in selling goods, wares, or merchandise
in commerce from selecting their own
customers in bona fide transactions
‘and not in restraint of trade;
(4) That nothing contained in this
paragraph shall prevent price changes
from time to time where made in re-
sponse to changing conditions affect-
ing the market for or the marketabil-
ity of the goods concerned, such as but
not limited to obsolescence of seasonal
‘goods, distress sales under court pro-
cess, or sales in good faith in discon-
tinuance of business in the goods con-
cerned. .
(5) That nothing contained in this
section shall prevent the meeting in
good faith of an equally low price of a
competitor.
(b) Prohibited brokerage and com-
missions. It is an unfair trade practice
for any member of the industry en-
gaged in commerce, in the course of
such commerce, to pay or grant, or to
receive or accept, anything of value as
a commission, brokerage, or other
compensation, or any allowance or dis-
count in lieu thereof, except for ser-
vices 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 intermediary
therein where such intermediary 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.
(c) 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 adver-
tising 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 facilities furnished by
Title 146—Commerciol Proctices
or through such customer in connec-
tion with the processing, handling,
sale, or offering for sale of any prod-
ucts or commodities manufactured,
sold, or offered for sale by such
member, unless such payment or con-
sideration is made known to and is
available on proportionally equal
terms to all other customers compet-
ing in the distribution of such prod-
ucts or commodities.
(d) Prohibited discriminatory ser-
vices or facilities. It is an unfair trade
practice for any member of the indus-
try engaged in commerce to discrimi-
nate in 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 contribut-
ing to the furnishing of, any services
or facilities connected with the pro-
cessing, handling, sale, or offering for
sale of such commodity so purchased
upon terms not accorded to all com-
peting purchasers on proportionally
equal terms.
(e) Inducing or receiving an illegal
discrimination in price, advertising or
promotional allowances, or services or
facilities. It is an unfair trade practice
for any member of the industry en-
gaged in commerce, in the course of
such commerce, knowingly to induce
or receive a discrimination in price, ad-
vertising or promotional allowances, or
services or facilities, prohibited by the
foregoing provisions of this section.
(f) Exemptions. The prohibitions of
this section shall not apply to pur-
chases of their supplies for their own
use by schools, colleges, universities,
public libraries, churches, hospitals,
and charitable institutions not operat-
ed for profit.
Norte: In complaint proceedings charging
discrimination in price or services or facili-
ties furnished, and upon proof having been
made of such discrimination, the burden of
rebutting the prima facie case thus made by
showing justification shall be upon the
person charged; and unless justification
shall be affirmatively shown, the Commis-
sion is authorized to issue an order termi-
nating the discrimination: Provided, howev-
er, That nothing herein contained shall pre-
vent a seller rebutting the prima facie case
thus made by showing that his lower price
or the furnishing of services or facilities to
any purchaser or purchasers was made in
376
Chapter |—Federal Trade Commission
good faith to meet an equally low price of a
competitor, or the services or facilities fur-
nished by a competitor. See section 2(b),
Clayton Act.
(Rule 25]
§ 57.26 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, direct-
ly or indirectly, to use or promote the
use of any unfair trade practice speci-
fied in this part. [Rule 26]
PART 50-—METALLIC WATCH BAND
Sec INDUSTRY
60.0 The industry and its products defined.
60.1 Deception (general).
60.2 Deception as to metallic content..
60.3 Misuse of “corrosion proof,” ‘‘non-cor-
rosive,” “corrosion resistant,” “rust
proof,” “rust resistant,” etc,
60.4 Deceptive as to origin or place of man-
ufacture. -
60.5 Misrepresentation as to character o
business.
60.6 Deceptive pricing.
60.7 Deception as to identity of manufac-
turer or seller.
60.8 Misrepresenting products as conform-
ing to standard.
60.9 Guarantees, warranties, etc.
60.10 Prohibited forms of trade restraints
(unlawful price fixing, etc.)
60.11 Defamation of competitors or false
disparagement of their products.
60.12 Prohibited discrimination.
AvurnHority: Secs. 6, 5, 38 Stat. 721, 719; 15
U.S.C. 46, 45, unless otherwise noted.
Source: 27 FR 6205, June 30, 1962, unless
otherwise noted.
§60.0 The industry and its products de-
fined. ,
(a) Members of this industry are per-
sons, firms, corporations, or organiza-
tions which engage in the manufac-
ture, sale, offering for sale or distribu-
tion of industry products as the term
“industry products” is defined in the
paragraph which immediately follows.
(b) The term “industry products,’”” as
used in the foregoing paragraph and
in the following rules, includes any
kind of metallic wrist bands which are
designed for holding wrist watches to
the wrists of human beings and which
are not permanently attached to the
cases of such watches. When perma-
nently attached to the cases of wrist
§ 60.2
watches, by soldering or otherwise,
they are not subject to the rules for
this industry, and are to be regarded
as among the products which are sub-
ject to the rules promulgated by the
Commission for the Watch Case In-
dustry on January 30, 1948.
§ 60.1 Deception (general).
(a) It is an unfair trade practice for
any industry member to sell or offer
for sale any industry product under
any representation, circumstance, or
condition having the capacity and ten-
dency or effect of deceiving purchas-
ers or prospective purchasers in any
material respect.
(b) The prohibitions of this section
are applicable to all forms of advertis-
ing, whether in periodicals, on the
radio or television, and whether writ-
ten or oral, and to any form of mark-
ing or labeling of the products, or
their containers or display cards.
(Rule 1J
§ 60.2 Deception as to metallic content.
(a) In the sale, offering for sale, or
distribution of industry products, it is
an unfair trade practice to:
(1) Misrepresent the kind, quantity,
quality, fineness, thickness, or manner
of application, of any metal or metal
alloy contained in an industry product
or part thereof; or —
(2) Fail to adequately and nondecep-
tively disclose the metallic composi-
tion of an industry product, or part
thereof, which has an exposed surface
of the appearance of gold and is not
throughout of pure (24 Kt.) gold. '
1Such disclosure shall be in the form of a
legible and permanent marking on the prod-
uct which is so positioned, and of such con-
spicuousness, as to conform with the re-
auirements relating to quality markings
which are set forth in paragraph (g) of this
section. When the composition is wholly of
a base metal having the appearance of gold,
the marking may be either “Base Metal” or
by use of a generally understood identifica-
tion of the kind of base metal present (such
as, “Anodized Aluminum”; “Brass”; etc.).
When of a base metal having a surface plat-
ing or coating of gold alioy, a marking of
“Gold Filled”, “Gold Plated”, “Gold Plate”,
“Gold Overlay’, “Rolled Gold Plated”,
“Rolled Gold Plate”, “Gold Electroplated”,
“Gold Electroplate”’, ‘Heavy Gold Electro-
Continued on following page.
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