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 preIsented 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 Cominission 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.

a

disclosure

(c) Concluding that 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 accept 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 maketing 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.

(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 admin

istered 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 dis

closure "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 is 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 having 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 Fiber Products Identification Act and/or that part of section 5 of the Federal Trade Commission Act which makes deceptive acts or practices in commerce unlawful.

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

§ 15.352

Stereo tape cartridge club; consumer credit regulations will apply. (a) The Commission issued an advisory opinion in response to an application from a businessman who proposed to organize a stereo tape cartridge club. (b) The Commission wrote the applicant:

(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 personal, 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