The center will place orders with manufacturers, receive goods not otherwise drop-shipped and distribute them, bill jobber-customers (i.e., "members"), and slowly accumulate an inventory in its warehouse.

(c) The Commission is of the opinion that the applicant would probably violate section 2(c) of the amended Clayton Act if he receives commissions from manufacturers whom he represents as a sales agent on purchases for his own account for resale to jobbers.

(d) The Commission also pointed out that, while buying groups of jobbers are not illegal per se, they may function in ways to violate section 2(f) of the amended Clayton Act if they refuse membership to jobbers who compete with each other and thereafter obtain unjustified price discriminations.

[34 F.R. 3742, Mar. 4, 1969]

§ 15.329 Dissemination of uniform warranty plan by trade association to members.

(a) The Commission rendered an advisory opinion to a trade association of retailers that its proposal to circulate a uniform warranty among its membership would likely result in violation of Commission administered laws. The warranty in question, applicable within 100 miles of a dealer's store, provides:

(1) The extent of the liability of this firm to service merchandise purchased from us is limited to this policy and it is in addition to any written guarantee included from the manufacturer involved.

(2) Under conditions of normal usage, our store warrantees (sic) our (products) to be free from defects in workmanship and structural materials for a period of 1 year from the date of purchase. This guarantee does not apply to damages resulting from negligence, misuse, or accidents.

(3) We will repair or replace at our option any defective item, or part, at absolutely no charge. In determining the cause or nature of the defect, and the manner of repair; the judgment of this firm will be final.

(b) The Commission concluded that it could not render advice with respect to that portion limiting retailer liability to the warranty terms nor to the comment that the warranty is in addition to any manufacturer's written guarantee. This position was taken for the reason that the question of warranties is being currently examined, specifically as they relate to the automotive industry, and any. Commission statement along these lines at this time would be premature.

(c) Nor could the Commission approve the remainder of the proposed warranty for the reason that it is not a simple generalized guideline intended to assist the membership in drafting warranties embracing their own terms but is, in fact, an actual 1 year warranty incorporating predetermined and definite terms and conditions for use without change by members. For this reason the Commission advised that should the proposed warranty be selected by all or a substantial number of Association members the likely purpose and probable result would be the adoption of anticompetitive uniform terms and conditions by the membership and would, therefore, be objectionable.

[34 F.R. 5061, Mar. 11, 1969]

§ 15.330 Proposed advertising for orthopedic pillow.

(a) The Commission was requested to render an advisory opinion with respect to proposed advertising for a pillow intended for orthopedic and therapeutic purposes, which would represent that the device was designed for use in cervical spine, low back pain cases and by cardiac patients.

(b) The opinion advised the advertisers that while the Commission has no objection to representations that the device might afford temporary relaxation and comfort under certain conditions, any representations in advertising that the pillow is a health device particularly useful for cervical spine, low back pain and cardiac cases would appear to have the capacity and tendency to deceive. [34 F.R. 5061, Mar. 11, 1969]

§ 15.331 Disclosure of origin of imported food product.

(a) The Commission rendered an advisory opinion to a trade association which involved the question of whether it is necessary to disclose the origin of an imported food product. Imported in its entirety, the product is later sliced and packed in containers in the United States for sale to the general public.

§ 15.333 Manufacturer-wholesale relationships: different discounts; refusals to deal; termination of further sales.

(a) The Commission issued an advisory opinion in response to a request from a manufacturer concerning several courses of action he proposes to take in his sales relationships with wholesalers.

(b) The manufacturer now grants all wholesalers a 40 percent discount off the list price of his products. Proposed are new contracts, providing the 40 percent discount to a Full Service Dealer or Wholesaler who performs certain specified functions, and only 25 percent to a Part Service Dealer or Wholesaler "who does not fulfill all the functions set forth" in the definition provisions for a Full Service Dealer or Wholesaler.

(c) The Commission advised:

(1) "To the extent that an additional discount is sought to be justified on the basis of functional services such as stocking and display performed by so-called Full Service Dealers or Wholesalers [function No. 4 of applicant's proposed wholesaler agreement], no advisory opinion can be provided at this time because the Commission contemplates an inquiry looking toward a rule-making proceeding involving this question as it pertains to another industry.

(2) "Moreover, as to the other functional criteria for Full Service Dealers or Wholesalers set forth in applicant's proposed wholesaler agreement, the Commission will not approve any standards whereby a wholesaler's eligibility for added discounts is contingent upon the imposition of specified restrictions upon his customers by him.

(3) "You also ask if you may refuse to deal with a wholesaler in one town who is reselling your products to wholesalers in another town. The Commission is of the opinion that such refusal to deal could amount to a violation of section 5 of the Federal Trade Commission Act. Therefore, the Commission cannot approve the proposal.

(4) "Additionally, you ask if you may terminate further sales to a wholesaler who is establishing his own network of wholesale dealers, obligated by contract to purchase their supplies exclusively from him. This wholesaler, as does the one involved in your second request, is departing from the traditional role of the wholesaler in the beauty and barber supply business by refusing to confine his sales to beauty schools and salons

and has, in effect, entered into competition with your company as a supplier of [your] products to wholesale dealers. The facts provided do not give any basis for viewing the wholesaler's exclusive dealing arrangements as violative of the antitrust laws. Without reaching the question of whether you might terminate further sales to the wholesaler if the exclusive dealing contracts were illegal, the Commission believes your proposed termination of the wholesaler would appear to be anticompetitive and thus contrary to the provisions of section 5 of the Federal Trade Commission Act. The proposal, therefore, cannot be approved." [34 F.R. 6654, Apr. 18, 1969]

§ 15.334 Location of foreign origin disclosure.

(a) The Commission advised an importer of candles and candle holders in regard to the proper location of the foreign country of origin disclosure thereof.

(b) After importation, the product will be assembled in a combination blister package of eight candles and eight holders on a display card for resale to the general public. The imported holders and candles will be marked with their respective country of origin. However, this identification as to foreign origin will not be readily seen by prospective purchasers making a casual inspection of the merchandise prior to the purchase thereof.

(c) In regard to the question of whether the disclosure should be made on the product or on the face of the display card, the Commission said: the general rule is that the disclosure must be clear and conspicuous. This means that it must be placed in a location where it would be readily observed by prospective purchasers making a casual inspection of the merchandise prior to, not after, the purchase thereof." [34 F.R. 6655, Apr. 18, 1969]

§ 15.336 Legality of membership by brewer in beer wholesalers' trade association.

Responding to an application from a beer wholesalers' association the Commission advised the applicant that: (1) "* ** it is not illegal per se for suppliers to belong to a wholesalers' trade association, but particular care must be exercised to avoid violation of law. In the case of an industry where distributors are in a weak bargaining position,

vis-a-vis, their suppliers and where the industry on the supply side is concentrated, these circumstances may lead to vertical restraints on the distributors violative of the antitrust laws for example in the area of pricing decisions. These considerations may apply in the case of the beer industry. The necessity of preserving its members' independence in making business decisions should, of course, be taken into consideration by trade association when they formulate membership policies.

(2) "The Commission further advised the applicant that it is not a violation of the antitrust laws to exclude suppliers from membership in a wholesalers' organization."

[34 F.R. 6519, Apr. 16, 1969]

§ 15.337 Disclosure of origin of imported hand sprayers and squeeze bottles.

(a) The Commission issued an advisory opinion concerning the proper labeling as to the origin of imported, small, plastic, hand-operated sprayers and two-piece plastic squeeze bottles.

(b) The applicant advised the Commission that the imported articles would be sold in quantity to manufacturers or suppliers of cleaning liquids or other industrial accounts. These purchasers would furnish the imported articles to industrial users for dispensing cleaning liquids supplied by these purchasers.

(c) The Commission advised the applicant that on the basis of the facts as presented the country of origin of the imported sprayers or squeeze bottles should appear conspicuously on the cartons in which they are shipped to his customers. In the absence of any affirmative representation that these products are made in the United States or any other representation that might mislead the ultimate purchasers or users as to the country of origin and in the absence of any other facts indicating actual deception, the failure to mark the origin of these articles on them would not be regarded by the Commission as deceptive. Accordingly, no marking is required on these articles with reference to the country of origin.

[34 F.R. 6907, Apr. 25, 1969]

§ 15.338 Disclosure of origin of imported seam ripper blades.

(a) The Commission rendered an advisory opinion concerning the proper marking of the origin of seam ripper

blades imported from Germany. The imported blades will be assembled with handles of domestic origin.

(b) The Commission advised the party seeking the opinion that it would be necessary to make clear and conspicuous disclosure of the foreign country of origin of the imported blades. [34 F.R. 6907, Apr. 25, 1969]

§ 15.339 Disclosure of origin of imported fishing lures.

(a) In response to a request for an advisory opinion, the Commission ruled that it would be necessary for the requesting party to make a clear and conspicuous disclosure at the point of sale of the foreign country of origin of its imported fishing flies.

(b) Under the factual situation presented in the ruling, the flies will be shipped to retailers for resale packaged 1 dozen loose in a plastic box. Each box will contain from 1 to 4 flies made in a foreign country and 8 to 11 flies of domestic origin. Fishermen normally will purchase the flies singly and not by the dozen.

[34 F.R. 7008, Apr. 29, 1969]

§ 15.340 Location of foreign origin label on imported engine parts.

(a) In response to a request for an advisory opinion, the Commission advised an importer of fuel injection parts and units, which are to be used as replacement parts in engines, that it could disclose the foreign origin thereof on the container rather than on the product.

(b) The engines are purchased by industrial and commercial users, and by individual consumers as well. Whenever possible, the imported products will be marked with the country of origin on the nameplate. Furthermore, the imported parts and units may be packaged individually or in certain specific quantities per box. Because a number of the imported replacement parts are either too small to permit country of origin identification on the product itself, or may have highly finished surfaces which would be destroyed with marking, the question was raised as to whether it would be permissible to make the disclosure only on the container. [34 F.R. 7008, Apr. 29, 1969]

§ 15.341 Disclosure of origin of imported motors.

(a) In response to a request for an advisory opinion, the Commission ruled

that it would not be necessary to disclose the foreign origin of certain electric motors or components thereof which are imported from Poland.

(b) According to the facts presented by the requesting party, the imported motors will be attached in the United States to domestically made gear trains. Moreover, the imported motor will represent approximately one-third of the total cost of the finished unit, i.e., the motor and the gear train.

(c) Concluding that a disclosure would not be required under these circumstances, the Commission said: "In the absence of any affirmative representation that the imported motors are made in the United States, or any other representation that might mislead purchasers as to the country of origin, the Commission is of the opinion that, under the facts presented, the failure to mark the origin of the imported motors or components thereof will not be regarded by the Commission as deceptive." [34 F.R. 7145, May 1, 1969]

§ 15.342

Location of term "irregular" to describe shirts.

(a) In response to a request for an advisory opinion, the Commission advised a manufacturer that irregular men's dress and sport shirts should be stamped "irregular" on the neck band, not on the shirttail.

(b) Whenever an affirmative disclosure is required, the Commission said, it is a well-established principle that it must be made with such clarity that it will likely be observed by prospective purchasers making a casual inspection of the merchandise prior to, not after, the purchase thereof. Because of the manner in which shirts are ordinarily folded and displayed at the point of sale, the Commission added, an "irregular" stamp on the shirttail would not normally be seen by prospective purchasers until after the sale has been consummated.

(c) Concluding that the disclosure should be made in the neck band, the Commission said: "Although the disclosure may be placed in any location so long as it complies with the aforementioned principle, experience indicates that the best possible location in most cases would be in the neck band. This is where most prospective purchasers look at a shirt because this is where the size and fiber identification normally are placed. Under these circumstances, therefore, the Commission would not ac

cept a disclosure made on the shirttail. It would, however, accept a legible disclosure made in the neck band as being in compliance with sec. 5 of the FTC Act."

[34 F.R. 7145, May 1, 1969]

§ 15.343 Disclosure of origin of imported circular saw discs.

(a) In response to a request for an advisory opinion, the Commission ruled that it would not be necessary to disclose the foreign origin of imported circular steel saw discs.

(b) After importation, the manufacturer will add tungsten carbide tips to the imported discs. Domestic parts and labor represent approximately 80 percent of total production costs, with the remaining 20 percent representing the cost of the imported discs. The finished blades will be sold to cabinet shops, schools, builders, industrial concerns, and hobbyists.

[34 F.R. 7234, May 2, 1969]

§ 15.344

Premerger clearance not granted; grocery stores in concentrated market.

(a) The Commission advised an applicant for an advisory opinion that it cannot grant clearance for a proposed merger of two grocery retailing corporations operating in the same metropolitan marketing area.

(b) Applicant is the owner of three supermarkets having 1.5 percent share of the particular market. The proposed purchaser is a regional supermarket chain having 18 percent to 20 percent of the same market with a ranking of second among all the companies selling groceries in the area. The market is concentrated with the four leading companies sharing 57 percent according to one survey and 74 percent of all sales as calculated by another analyst.

(c) The Commission advised the applicant that it believes that the proposed merger would raise substantial questions of legality under the merger laws and that it therefore cannot grant the clearance requested.

[34 F.R. 7235, May 2, 1969]

§ 15.345 Survey of professional compensation by employing institutions. (a) The Commission issued an advisory opinion with respect to a proposed survey of certain professional compensation in employing institutions.