(b) The applicant proposed to conduct a survey of employing institutions by means of a questionnaire to ascertain the compensation being paid to specified professionals. Respondents to the questionnaire would not be identified. The results of the survey would be reported as national and regional averages and they would be published and distributed to the trade and public press. No conclusions would be drawn nor would recommendations be made.

(c) The Commission advised the applicant that implementation of the proposed course of action in the manner described probably would not violate any of the laws administered by the Commission.

[34 F.R. 7278, May 3, 1969]

§ 15.346 Promoter's responsibility in tripartite promotional assistance plan.

(a) The Commission issued an advisory opinion relative to the duty and responsibility under the laws administered by the Commission of a promoter or intermediary in a tripartite promotional assistance plan.

(b) The Commission expressed the view that the fact that an intermediary is positioned between the supplier and the supplier's customers does not affect the applicability of the law to the plan. Such a plan must still provide all of the supplier's customers who compete with each other in reselling his products an opportunity to participate on proportionally equal terms. In this regard, the plan should contain suitable alternatives for customers who may be unable, as a practical matter, to participate in the primary proposal.

(c) The legality of such arrangements, in the Commission's view, is measured by whether the promoter and the suppliers using the plan have met this obligation toward the suppliers' customers or whether participating customers have actual or constructive knowledge that they disproportionately benefit under the plan.

(d) In the light of these general principles, the Commission declined to approve the proposed promotional plan for two reasons-(1) The proposal did not appear to be a complete plan offering practical alternatives for those customers unable to participate in the primary proposal, and (2) even if it did contain alternatives usable by all competing customers, they would apparently not all be

notified of the entire plan so that each may choose which alternative is suitable for his own use.

(e) The Commission stated that if the proposed promotional assistance plan were implemented, section 2 (d) or (e) of the Clayton Act, as amended, and/or section 5 of the Federal Trade Commission Act would probably be violated. [34 F.R. 7278, May 3, 1969]

§ 15.347

Disclosure of origin of imported shoes.

(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 of the foreign country of origin of its imported shoes.

(b) Under the factual situation present in the ruling, it was assumed that the shoes were entirely of foreign manufacture and after importation they were to be sold to the general public. [34 F.R. 7445, May 8, 1969]

§ 15.348 Disclosure of origin of imported turpentine.

(a) The Commission advised a company that a "Packaged in U.S.A." statement standing alone would not be sufficient, and that it would be necessary to make a clear and conspicuous disclosure on the package of the foreign country of origin of the imported turpentine.

(b) Under the factual situation presented for a ruling, the company plans to import turpentine from either Portugal or the U.S.S.R. After importation, the turpentine will be repackaged here in the United States into 1 gallon, 1 quart, and 1 pint containers for resale for general consumer use.

[34 F.R. 8093, May 23, 1969]

§ 15.349 Disclosure of origin of imported components used in fork lift trucks.

(a) In response to a request for an advisory opinion, the Commission advised a company that one of its statements would not be proper but that it would not object to its other proposed statement. The company had requested an opinion in regard to the proper marking and advertising of fork lift trucks made partly of imported components with specific reference to the following two statements:

(1) "Assembled in U.S.A."

(2) "Assembled in U.S.A. of components of USA & Imports".

(b) The trucks will be sold to industrial users through various sales agencies throughout the United States, and the agencies will have on display at least one or two models to show to prospective purchasers. It is anticipated that parts imported from Bulgaria will represent approximately 40 percent of total production costs, parts, and labor assembly costs in the United States will represent 30 percent and the remaining 30 percent will represent parts imported from one of the following five countries: West Germany, France, England, Denmark, and Japan. Thus approximately 70 percent of total production costs will consist of imported components.

(c) In the opinion which was rendered, the Commission concluded that it could not accept the first proposed statement as being in conformity with section 5 of the FTC Act. However, the Commission said, it would interpose no objection to the use of the second proposed disclosure "Assembled in U.S.A. of components of USA & Imports." [34 F.R. 11140, July 2, 1969]

§ 15.350 Accreditation program for producers of concrete and concrete products.

(a) The Commission rendered an advisory opinion involving a proposed accreditation program in the construction industry, including the award of a certificate of accreditation. The program is designed to upgrade and maintain the quality of a building material.

(b) Under the proposed program, the sole criterion for accreditation and the award of a certificate of accreditation of established firms will be provable ability to function effectively in the field of concrete construction, and any applicant who has a satisfactory record of accomplishment as certified by the architect or engineer for whom concrete work was done will be accredited. Certificates will be renewed annually solely on the basis of satisfactory performance during the preceding year. The failure to maintain satisfactory performance standards could result in deaccreditation and withdrawal of the right to use the certificate. General supervision of the proposed program of accreditations will be vested in a Board of Directors, no member of which will have any financial interest in the product as might affect his impartiality under the program. The Board will have the responsibility, among other matters, for

insuring nondiscriminatory administration of and free access to the program.

(c) There will be no requirement for any applicant as to the length of time in business, his capital, or size of operation. Applicant firms with no previous experience in the industry but having personnel of sufficient background and experience in concrete construction or related fields and which express a desire to engage in quality concrete constructions will be accredited. All present and future applicants will have free, unrestricted and nondiscriminatory access to the program, whether or not they are a member of any sponsoring organization. All nonmember applicants will be accorded an equal opportunity for accreditation at a cost no greater than and under conditions no more onerous than those imposed upon comparably situated organization members for whom comparable services may be rendered. A uniform certificate of accreditation will be awarded to all who qualify.

(d) The Commission advised that it would not proceed against the practices so long as they are implemented in the manner described. The requesting party was advised further that in giving its approval to this request the Commission in expressing no opinion with respect to product standards which may be or are now established and that the approval will be of no force and effect should the proposed program of accreditation be implemented in contravention of Commission-administered law. The Commission added that should the proposed program be adopted the Commission may, from time to time, wish to assure itself that it is being used for the limited purposes intended.

[34 F.R. 11140, July 2, 1969]

§ 15.351 Use of symbols and names laving fur-bearing animal connotations in labeling textile fiber products. (a) The Commission was requested to render an opinion with respect to the labeling of textile fiber products manufactured so as to simulate a fur or fur product.

(b) The requesting party proposed to use a word closely resembling the name of a fur-bearing animal, the fur from which is commonly used in the manufacture of garments, in association with a fabric simulating that fur.

(c) In the Commission's view, the use of the proposed term to describe such a fabric would probably violate the Textile

(1) "You state that the idea of the club is to allow club members to exchange ten tape cartridges per month. A membership will cost $480, to be paid in 30 monthly installments of $16 each. That meets the definition of consumer credit which is credit offered or extended to a person primarily for personnel, family, household, or agricultural purposes and for which a finance charge is imposed or which is repayable in more than four installments.

(2) "Enclosed for your guidance is a copy of the Federal Reserve press release of February 7, 1969, containing Regulation Z issued under the Truth In Lending Act. With some exceptions, the Federal Trade Commission has the principal enforcement duties. The Commission points out that all relevant provisions must be complied with by anyone extending or arranging for consumer credit. A potential club member in your program is entitled to full disclosure of all financial arrangements, including the fact that a third party may hold the promissory note for collection.

(3) "In addition to your straight retail memberships, you contemplate a 'cooperative' membership to be offered in return for certain promotional cooperation. The Commission invites your attention to the enclosed copy of the Commission's Guides Against Deceptive Pricing, effective since January 8, 1964. You will note that it might be an actionable deceptive practice prohibited by law to identify a commodity as having a certain retail value unless that is a price at which identical commodities have in fact been sold in substantial quantities. No conclusion of legality or illegality is possible in the instant matter on the basis of the brief information you have submitted.

(4) "Further, you are advised that it might also be an actionable deceptive

practice prohibited by law to fail to fully inform a potential club member not only about all financial arrangements and the accurate retail value of the cartridge player but also about the nature and function of the player; e.g., is the player a self-contained playing machine or does it need an amplifier and speakers to render performance?

(5) "For postal regulations, you should consult your local postmaster."

[34 F.R. 11199, July 3, 1969]

§ 15.353

Use of the term "hand carved" to describe furniture.

(a) The Commission issued an advisory opinion with respect to the use of the term "hand carved" to describe certain furniture.

(b) The manufacturing procedure for the furniture calls for a prototype to be completely constructed and carved by hand. Then, the prototype becomes a pattern for an intricate machine which "rough cuts" the carvings on subsequent pieces for assembly production. Each piece so manufactured then has intricate hand detailing, carving and finishing to the extent that each piece is, in fact, different in artistic detail from the one which follows it. Each piece is numbered and signed by the craftsman who completes it.

(c) The Commission expressed the view that using the term "hand carved" to describe furniture manufactured in the manner described would probably violate the Federal Trade Commission Act, section 5.

[34 F.R. 11418, July 10, 1969]

§ 15.354 Tripartite promotional plan in the grocery field.

(a) The Commission issued an advisory opinion with respect to a proposed tripartite promotional plan in the grocery field.

(b) The applicant proposed to lease space at a fixed fee in each of all competing food stores in the top 50 markets in the country. On this leased space the applicant will install a display of 15 stillcolor illustrations of special food dishes. The applicant would sell advertising space to food packagers. The applicant would advertise the availability of his plan in the trade press and notify each store in a direct-mail program. Real estate brokers would also be used in an effort to secure participation by all competing retailers. Retailers with no floor space available for applicant's proposed

display could participate by permitting the applicant to install 15 single modular units on shelves for which the retailers would receive the same compensation as retailers having applicant's displays.

(c) The Commission advised the applicant that were the plan implemented as proposed, the Commission would have no objection to it. The Commission pointed out that were the plan implemented in a different manner, the promoter, the supplier, and the retailer might be acting in violation of section 2 (d) or (e) of the Clayton Act, as amended, and/or section 5 of the Federal Trade Commission Act. The Commission also told the applicant: "The promoter must make it clear to each supplier and each retailer that even though an intermediary is employed in this plan, it remains the supplier's responsibility to take all reasonable steps so that each of the supplier's customers, including those who do not purchase directly from the supplier, who compete with one another in reselling his products is offered an opportunity to participate in the promotional assistance plan on proportionally equal terms, which plan should include suitable alternatives if there are customers who may be unable as a practical matter to participate in the primary program; if not, the supplier, the retailer and the promoter participating in the plan may be acting in violation of section 2 (d) or (e) of the Clayton Act and/or section 5 of the Federal Trade Commission Act."

[34 F.R. 11418, July 10, 1969]

§ 15.355 Disclosure of origin of partly foreign-made textile products.

(a) The Commission advised a manufacturer of men's and boys' slacks that it would not be necessary to disclose the fact that certain assembly and sewing operations are performed in a specified foreign country.

(b) Under the facts presented to the Commission, the slacks consist of cotton and synthetic woven fabrics and threads, and steel hooks and eye enclosures, all of which are made in the United States. Said materials are inspected and cut to pattern in the United States and certain assembly steps, such as the sewing of belt loops and the attachment of zipper chains, are also performed domestically. Thereafter, they are shipped to the company's plant in a foreign country where they are further

assembled and sewn. Finally, they are returned to the United States where the buttonholes are sewn, the buttons attached, and the pants are pressed, inspected, cured, and prepared for shipment to customers.

(c) the cost of the foreign assembly and sewing operations is approximately 13.5 percent of total production costs, and the company wanted to know whether it would be necessary to disclose the nature and extent of the foreign operations either under section 5 of the FPC Act or section 4(b) (4) of the Textile Fiber Products Identification Act. It was further understood that the company does not intend to label the slacks as "Made in U.S.A." or use any other words of similar import.

[34 F.R. 11418, July 10, 1969]

§ 15.356 Tripartite promotional plan in the grocery industry.

(a) The Commission issued an advisory opinion with respect to a triparite promotional plan in the grocery field.

(b) The applicant proposed to rent space to advertisers on a mechanical device containing a moving message, the purpose of which is to advertise products at the shelf level in retail grocery stores. The applicant would offer retail stores having weekly gross sales of $30,000 or more $3 per 2-week period per device for at least five devices (with an option to install up to 20 devices) as rent for the area necessary for the installation of the advertising devices. Stores having weekly gross sales of less than $30,000 would be furnished signs for them to attach to their shelves or other suitable pointof-sale area of similar size to the mechanical device offered to the larger stores. Stores with weekly gross sales of less than $30,000 would also be furnished display materials such as aisle indicators and generic product ads. Stores with weekly gross sales of $20,000 to $30,000 would be paid $1.50 per 2-week period per sign; stores with weekly gross sales of less than $20,000 would be paid 19 cents per 2-week period per sign.

(c) The Commission expressed the view that were the proposed promotional assistance plan implemented, the Clayton Act, section 2 (d) and/or (e), as amended, and/or the Federal Trade Commission Act, section 5 would probably be violated because neither the payments nor the services under the plan are offered on proportionally equal terms

and the "alternatives" are not all made available to each competing customer. [34 F.R. 11492, July 11, 1969]

§ 15.357

Supplier services furnished through third party.

(a) The Commission advised a requesting party that his proposed plan would be governed by the provisions of section 2(e) of the amended Clayton Act, as interpreted by the Commission's recently issued Guides for Advertising Allowances and Other Merchandising Payments and Services.

(b) In return for chain officials' time in considering supplier proposals, a third party intermediary proposed to provide merchandising advice of a perhaps general nature. The requesting party considered his proposed action to be outside the scope of section 2(e).

(c) The Commission concluded that implementation of the plan would be likely to result in a violation of section 2(e) if the plan were to be offered only to chains and if usable and suitable alternatives were not offered to those competing customers who could not use the basic plan.

[34 F.R. 11492, July 11, 1969]

§ 15.358

Disclosure of foreign country where textile products are assembled. (a) The Commission advised two manufacturers of textile fiber products that it would not be necessary to disclose the name of the foreign country where certain finishing operations are performed.

(b) In both cases, the fabric is of domestic origin. In one case, the company will ship its American-made fabric and findings to the Dominican Republic where the fabric will be cut, sewn, finished, and returned for resale to the industrial rental laundry industry. Labor services performed in the foreign country will represent approximately 30 percent of total production costs.

(c) The other company, which is engaged in the manufacture and sale of ladies' undergarments, will cut the material in the United States and then ship it to Haiti where it will be sewn and finished. The company's foreign labor costs will represent approximately 20 percent of total production costs.

(d) Both companies were advised by the Commission that it would not be necessary to disclose in the labeling the nature and extent of the foreign operations performed on the textile products either under section 5 of the FTC Act or

section 4(b) (4) of the Textile Fiber Products Identification Act. [34 F.R. 11492, July 11, 1969]

§ 15.359 Trade association's proposed compilation and publication of certain financial data.

(a) The Commission issued an advisory opinion in response to a request from a trade association concerning a proposed survey to be conducted among its members.

(b) The proposed survey seeks industry data for 1966, 1967, and 1968 confined solely to the following items:

(1) Percent return on total investment;

(2) Percent net profits (after taxes) to total sales;

(3) Percent advertising cost to gross sales;

(4) Percent direct labor cost to gross sales;

(5) Ratio current assets to current liabilities;

(6) Ratio net sales to inventory; and (7) Ratio net sales to net working capital.

(c) The association proposes to obtain the information from its members on a confidential basis, to tabulate the data without identifying any company, and then to publish the results.

(d) The Commission advised the applicant that it does not object to the proposed survey, compilation, and publication of industry financial data as outlined above and on the basis stated i.e., that there will be no disclosure of the name of any company participating. It is to be understood that this advisory opinion is necessarily limited to this particular program. However, the Commission invites submittal of any other proposed financial surveys in definite form for Commission advisory opinions. [34 F.R. 11492, July 11, 1969]

§ 15.360 Use of descriptive phrase to describe furniture.

(a) The Commission issued an advisory opinion with respect to the use of a descriptive phrase such as "[Trade Name] furniture combines modern production methods with hand-carving and finishing" to refer to certain furniture.

(b) The manufacturing procedure for the furniture calls for a prototype to be completely constructed and carved by hand. Then, the prototype becomes a pattern for an intricate machine which