§ 57.24 Prohibited forms of trade restraints (unlawful price fixing, etc.).1 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 industry, or with any other person or persons, to fix or maintain the price of any goods 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. [Rule 24] § 57.25 Prohibited discrimination. (a) Prohibited discriminatory prices, or rebates, refunds, discounts, credits, etc., which effect unlawful price discrimination. It is an unfair trade practice for any member 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 differential, effects a discrimination in price between different purchasers of goods of like grade and quality, where either or any of the purchases involved therein are in commerce, and where the 1 The prohibitions of this rule are subject to Public Law 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 establishes a minimum or stipulated price at which such commodity may be resold by such buyer when such contract or agreement is lawful as applied to intrastate transactions under the laws of the State, Territory, or territorial jurisdiction 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 between persons, firms, or corporations in competition with each other. 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 discrimination, or with customers of either of them: Provided, however: (1) That the goods involved in any such transaction are sold for use, consumption, 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 differing methods or quantities in which such commodities are to such purchasers 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 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 products are to such purchasers sold or delivered. (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 response to changing conditions affecting the market for or the marketability of the goods concerned, such as but not limited to obsolescence 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. (b) Prohibited brokage and commissions. It is an unfair trade practice for any member of the industry engaged 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 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 intermediary therein where such intermediary is acting in fact for or in behalf, or is subject to the direct or indirect control, of any party to such transaction other than the person by whom such compensation is so granted or paid. (c) Prohibited advertising or promotional 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 advertising or promotional allowances or any other thing of value to or for the benefit of a customer of such member in the course of such commerce as compensation or in consideration for any services or facilities furnished by or through such customer 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 made known to and is available on proportionally equal terms to all other customers competing in the distribution of such products or commodities. (d) Prohibited discriminatory services or facilities. It is an unfair trade practice for any member of the industry engaged in commerce to discriminate in favor of one purchaser against another purchaser or purchasers of a commodity bought for resale, with or without processing, by contracting to furnish or furnishing, or by contributing to the furnishing of, any services or facilities connected with the processing, handling, sale, or offering for sale of such commodity so purchased upon terms not accorded to all competing 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 engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price, advertising 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 purchases of their supplies for their own use by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit. NOTE: In complaint proceedings charging discrimination in price or services or facilities 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 Commission is authorized to issue an order terminating the discrimination: Provided, however, That nothing herein contained shall prevent 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 good faith to meet an equally low price of a competitor, or the services or facilities furnished 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, directly or indirectly, to use or promote the use of any unfair trade practice specified in this part. [Rule 26] PART 58-GOLF, BASEBALL, AND ATHLETIC GOODS INDUSTRIES GROUP I Sec. 58.1 58.2 58.3 58.4 58.5 58.7 58.8 Commercial bribery. Commercial bribery; continued. Misrepresentation as to endorsement, Appropriating names used by com- Inducing breach of contract. COMMITTEE ON TRADE PRACTICES 58.201 Industry committee. AUTHORITY: The provisions of this Part 58 issued under secs. 6(g), 5, 38 Stat. 722, 719; 15 U.S.C. 46(g), 45, unless otherwise noted. SOURCE: The provisions of this Part 58 contained in trade practice rules, Golf, Baseball, and Athletic Goods Industries, FTC, Oct. 29, 1931, unless otherwise noted. principals as an inducement to influence their employers or principals to purchase or contract to purchase industry products from the maker of such gift or offer, or to influence such employers or principals to refrain from dealing or contracting to deal with competitors, with the tendency to injuriously affect the business of competitors, is an unfair trade practice. § 58.2 Commercial bribery; continued. For any person, firm, or corporation to give anything of value to those employed in any capacity involving special trust (such as instructor, director of athletics, or advisor in any particular line of sports), without the knowledge of their employers, upon the condition or understanding, express or implied, that its goods be recommended or used by such person, in preference to the athletic goods or equipment of a competitor or competitors of that person, firm, or corporation, with the tendency to injuriously affect the business of competitors, is an unfair trade practice: Provided, That nothing in this section shall prevent any person, firm, or corporation from selling its goods to anyone upon whatsoever terms it sees fit but without any condition or understanding, express or implied, as to the recommendation or use of said athletic goods or equipment. § 58.3 Misuse of prominent names. The use of the names of prominent athletes on athletic goods or equipment used in the particular branch of athletics engaged in by said athletes when said athletes did not design or do not bona fide endorse or do not themselves bona fide use said athletic goods or equipment, and where from the use of said name there is a tendency and capacity to induce purchasers of said athletic goods or equipment to purchase said athletic goods or equipment in the belief that the same are bona fide used or endorsed or were designed by said athletes, with the tendency to injuriously affect the business of competitors, is an unfair trade practice. § 58.4 Misrepresentation as to endorsement, etc., of industry products. Falsely advertising or falsely representing that an athlete prominent in a particular line of sports or athletics designed or uses or endorses certain athletic goods or equipment, with the tendency and capacity to deceive purchasers For any person, firm, or corporation to lease or make a sale or contract for sale of athletic goods or equipment, whether patented or unpatented, for use, consumption, or resale within the United States, or to 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 athletic goods or equipment 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 understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce, is an unfair trade practice. (Sec. 3, 38 Stat. 731, 15 U.S.C. 14) § 58.7 Appropriating names used by competitor. It is an unfair trade practice for any person, firm, or corporation to use on, or in any way in connection with the sale of any of, its athletic goods or equipment the name, nickname, or initials of any athlete or person prominent in any line of sport, when a competitor has previously acquired of the said athlete or person, and with his approval, the exclusive right and good will in and to said name, nickname, or initials for use on the same line of goods, and where the effect of the use by the said person, firm, or corporation of the said name, nickname, or initials is to deceive or tend to deceive the purchasing public as to the source or make of the said line of goods, and where the tendency is to injuriously affect the business of competitors. § 58.8 Inducing breach of contract. Maliciously inducing or attempting to induce the breach of existing contracts between competitors and any athletes or persons prominent in any line of sport relative to the use of said athletes' or persons' name, nickname, or initials, or maliciously interfering with or obstructing the performance of any such contractual duties or services with the purpose and effect of unduly injuring or hampering such competitors in their businesses, is an unfair trade practice. COMMITTEE ON TRADE PRACTICES § 58.201 Industry committee. The provisions of § 16.1 of this subchapter shall be applicable to an industry committee established under this part. [21 F.R. 1174, Feb. 21, 1956] PART 60-METALLIC WATCH BAND Sec. 60.0 60.1 60.2 60.3 60.4 60.5 60.6 60.7 60.8 60.9 60.10 INDUSTRY The industry and its products defined. Deception as to metallic content. Misrepresentation as to character of Deception as to identity of manufac- Misrepresenting products as conforming to standard. Guarantees, warranties, etc. Prohibited forms of trade restraints (unlawful price fixing, etc.) 60.11 Defamation of competitors or false disparagement of their products. 60.12 Prohibited discrimination. AUTHORITY: The provisions of this Part 60 issued under secs. 6, 5, 38 Stat. 721, 719; 15 U.S.C. 46, 45, unless otherwise noted. SOURCE: The provisions of this Part 60 appear at 27 F.R. 6205, June 30, 1962, unless otherwise noted. § 60.0 The industry and its products defined. (a) Members of this industry are persons, firms, corporations, or organizations which engage in the manufacture, sale, offering for sale or distribution 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 permanently attached to the cases of wrist 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 subject to the rules promulgated by the Commission for the Watch Case Industry 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 tendency or effect of deceiving purchasers or prospective purchasers in any material respect. (b) The prohibitions of this section are applicable to all forms of advertising, whether in periodicals, on the radio or television, and whether written or oral, and to any form of marking or labeling of the products, or their containers or display cards. [Rule 1] § 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 nondeceptively disclose the metallic composition 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.1 (3) Use the words "gold," "karat," "carat," "silver," "solid silver," "sterling," "sterling silver," "coin," "coin silver," "platinum," "iridium," "palladium," "ruthenium," "rhodium," or "osmium," or any abbreviation thereof, either alone or in conjunction with the words "plated," "plate," "filled," "overlay," 1 Such disclosure shall be in the form of a legible and permanent marking on the product which is so positioned, and of such conspicuousness, as to conform with the requirements 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 identification of the kind of base metal present (such as, "Anodized Aluminum"; "Brass"; etc.). When of a base metal having a surface plating or coating of gold alloy, a marking of "Gold Filled", "Gold Plated", "Gold Plate”, “Gold Overlay", "Rolled Gold Plated", "Rolled Gold Plate", "Gold Electroplated", "Gold Electroplate", "Heavy Gold Electroplated", or "Heavy Gold Electroplate", will be considered adequate when the use of such term is in full accord with the respective requirements and provisions relating thereto which are set forth in paragraphs (d), (e), (f), and (g), of this section. "electroplate," "electroplated" or any abbreviation thereof, except in accord with the requirements and provisions relating thereto which are hereinafter set forth. (b) Use of "Silver," "Solid Silver," "Sterling," "Sterling Silver," "Coin," and "Coin Silver": Industry products or parts thereof shall not be marked, described, or otherwise represented as being "silver," "solid silver," "sterling," or "sterling silver," unless they are throughout of silver of not less than 925/1000ths fineness. Nor shall they be marked, described, or otherwise represented as being "coin" or "coin silver" unless they are throughout of silver of not less than 900/1000ths fineness. The terms "sterling" and "coin" shall not be used as a marking on, or as descriptive of, products or parts which are of base metal on a surface or surfaces of which there has been applied a plating or coating of silver. When an industry product or part is marked or described as "silver plated" or "silver plate," all significant surfaces thereof shall have a plating or coating of silver of a high degree of fineness, and such plating or coating shall be of substantial thickness. Abbreviations of any of the mentioned terms are to be regarded as subject to the same requirements. (Additional requirements for use of these terms as markings on products are set forth in paragraph (g) of this section.) (c) Use of "Platinum," "Iridium," "Palladium," "Rhodium," "Ruthenium," and "Osmium": These words, and their abbreviations, shall not be used in any manner, or under any circumstance or condition, having the capacity and tendency or effect of deceiving purchasers or prospective purchasers as to the true metallic composition of an industry product or part thereof. NOTE: Commercial Standard, CS66-38, issued by the National Bureau of Standards of the U.S. Department of Commerce, covers the marking of articles made wholly or in part of platinum, and markings on industry products which are in compliance with applicable provisions of said CS66-38, and the additional requirements of paragraph (g) of this section, will be considered as proper. (d) Use of "Gold," "Karat," "Carat," "Gold Filled," "Gold Plated," "Gold Plate," "Gold Overlay," "Rolled Gold Plated," "Rolled Gold Plate," "Gold Electroplated," "Gold Electroplate," "Heavy Gold Electroplated," and "Heavy Gold Electroplate": Industry members shall 425 not use any of these words or terms, or any abbreviations thereof, under any circumstances or condition, or in any manner, which has the capacity and tendency or effect of deceiving purchasers or prospective purchasers as to presence of gold or gold alloy in any industry product or part thereof, or as to the extent or fineness of gold or gold alloy in any industry product or part thereof, and shall regard, as among the practices prohibited, the following: (1) Use of the unqualified word "Gold," or any abbreviation thereof, as descriptive of any industry product, or part thereof, which is not composed throughout of fine (24 karat) gold. (2) Use of the word "Gold," or any abbreviation thereof, as descriptive of any industry product, or part thereof, which is composed throughout of an alloy of gold, unless a correct designation of the karat fineness of the alloy immediately precedes the word "Gold," or abbreviation thereof, and such fineness designation is of at least equal conspicuousness therewith. (3) Use of the word "Gold," or any abbreviation thereof, as descriptive of any industry product, or part thereof, which is not composed throughout of gold or gold alloy, but is surface-plated or coated with gold alloy, unless the word "Gold," or abbreviation thereof, is so qualified as adequately and nondeceptively to disclose that the product or part is but surface-plated or coated with an alloy of gold; and, when such plating has been mechanically applied, unless such word "Gold," or abbreviation thereof, is immediately preceded by a correct designation of the karat fineness of the alloy and such fineness designation is of at least equal conspicuousness therewith. NOTE: See acceptable forms of markings and descriptions for such products set out in paragraph (e) (2) of this section. (4) Use of the terms "Gold Filled," "Rolled Gold Plate," "Rolled Gold plated," "Gold Overlay," "Gold Plated," or "Gold Plate," as descriptive of an industry product or part thereof, unless such product or part contains a surfaceplating of gold alloy applied by a mechanical process which is of such thickness and extent of surface coverage that use of the term as descriptive of the product or part will not have the capacity and tendency of deceiving purchasers or prospective purchasers, and unless the term is immediately preceded by a correct designation of the karat fineness |