poration state the purpose of the association to be to promote, represent and develop the industry within the state. In light of the foregoing circumstances, the Commission stated that it had no objection to the signing of the proposed articles of incorporation by the inquiring manufacturer.

[33 F.R. 12647, Sept. 6, 1968]

§ 15.291 Commission refuses to grant blanket approval to small baking company to be acquired by anyone including corporations subject to Commission acquisition-prohibition orders.

(a) The Commission rendered an advisory opinion in response to a premerger clearance request from the owner of a small baking company who wants to sell the business to anyone including corporations subject to Commission cease and desist orders containing provisions prohibiting further acquisitions without prior Commission approval.

(b) The applicant was advised by the Commission that it cannot grant the blanket approval requested. The Commission pointed out that corporations covered by Commission acquisition-prohibition orders are free, of course, to apply for prior approval to acquire the applicant's company in compliance with the order against the particular corporation.

(c) From the data submitted by the applicant, it appears that, while the population has declined in its trading area and its sales have produced reduced revenues, the company has continued to operate profitably. No evidence was presented of any attempts to sell the business to any other independent baker or to anyone presently outside the baking industry.

[33 F.R. 14637, Oct. 1, 1968]

costume jewelry containing a centerpiece consisting of a small inset of paua shell could not be described as "marine opal”. (b) According to the Commission's opinion:

*

opal is a gem which is well known generally among the purchasing public and the trade and has certain well-established characteristics and properties. It is an inorganic mineral found in Australia which is far more expensive and preferable than the paua shell, which is an organic substance found in the ocean. Under these circumstances, therefore, the Commission has concluded that it would be deceptive to label a paua shell as "opal" on the well-established principle that the consumer is prejudiced if, upon giving an order for one thing, he is supplied with something else."

(c) Commenting upon the inadequacy of the word "marine" to remove the deceptive nature of the word "opal," the Commission said that the word "marine" would only serve to enhance that deception. It reached this conclusion because the word "marine" would convey the impression, contrary to fact, that this is a variety of opal found in the ocean, when in fact just the reverse is true, i.e., opal is an inorganic mineral found in the ground.

[33 F.R. 14637, Oct. 1, 1968]

§ 15.293 Commission declines ruling on use of term "humus", and states Peat Industry Trade Practice Rules apply if material comes within certain definitions.

(a) The Commission responded to a request for an advisory opinion (1) concerning the use of the term "humus" in proposed marketing of certain top soil material, and (2) whether there is anything in the proposed operation which is subject to Commission rules or regulations.

(b) The application was made by a company which wants to market certain soil material as humus. The company submitted a partial analysis of the material as follows:

The Commission noted that the analysis presented above does not indicate the amount or degree of decomposition of organic matter that may have taken place, nor the mineral content of the soil.

(c) The Commission invited attention to this definition of humus in Soil: The Yearbook of Agriculture (1957), prepared by the U.S. Department of Agriculture and published by the U.S. Government Printing Office (at page 759): "Humus-The well-decomposed, more or less stable part of the organic matter in mineral soils."

(d) The Commission declined to express an opinion on the marketing of the material as humus because an informed decision on the proposed course of action or its effects could be made only after extensive investigation or testing; requests for opinions in this category are ordinarily considered inappropriate for Commission advice under § 1.1(c) of the Commission's procedures and rules of practice. Applicant also asked whether there is anything in the proposed operation which comes under Commission rules or regulations.

(e) Applicant was advised that the Commission's Trade Practice Rules for the Peat Industry, as promulgated January 13, 1950 (16 CFR 185), apply to proposed operations if the material to be sold comes within the following definitions under such rules: "As used in these rules, the terms "industry product" and "peat" shall be understood as having the following meanings:

Industry Product: Any product marketed for use as a soil conditioner, or for any agricultural or horticultural purpose, which is composed, or is represented as being composed, wholly or in part of peat; also, any product marketed for any such purpose which is composed, or is represented as being composed, wholly or in part of a humus or muck derived from peat.

Peat: Any partly decomposed vegetable matter which is accumulated under water or in a water-saturated environment through decomposition of mosses, sedges, reeds, tule, trees, or other plants. (f) The Commission invited attention to the note appended to Rule 3, calling for the voluntary nondeceptive disclosure of the degree of decomposition.

and principal uses of the product, as well as the acid and ash content, and moisture holding capacity. If this practice is observed, the likelihood of deception should be much reduced, the Commission commented.

(g) With regard to the second question, the Commission again invoked § 1.1(c) of its procedures and rules of practice. An informed decision by the Commission on the presence of any peat, or of any humus or muck derived from peat, could not be made without extensive investigation or testing. Normal advisory opinion procedures do not provide for such testing or investigation. [33 F.R. 14637, Oct. 1, 1968]

§ 15.294 Advertising on food product

wrapper.

(a) The Commission advised a food product manufacturer that it would not object to advertising proposed to be placed on the wrapper for the food product.

(b) The advertising would offer to those who respond a money making opportunity in the form of premiums or payments for the sale of a specified product. An inquirer would incur no obligation upon receipt of the plan, or thereafter, and would be free to accept or reject it at will. Anyone performing under the offer would be recompensed according to a clearly disclosed scale for services rendered. No monetary investment would be required.

[33 F.R. 15020, Oct. 8, 1968]

§ 15.295 Domestic origin marking on product containing foreign made components.

(a) The Commission responded to a request for an advisory opinion in regard to the following two questions:

(1) What percentage of imported components may be used in the finished product (bearings) without the necessity of disclosing the foreign country of origin thereof?

(2) Would it be proper to stamp the two types of bearings, which are partly made in a foreign country, as "Made in USA"?

(b) Because the party seeking the opinion did not know the cost of the imported components in relation to the total cost of the finished product, the Commission said that the first question

appeared to be somewhat hypothetical in that it does not involve a specific proposed course of action. Under these circumstances, the Commission concluded that the question was not the proper subject of an advisory opinion.

(c) With respect to the second question, the Commission concluded as follows: "* ⚫ the 'Made in USA' mark would constitute an affirmative representation that the bearings are made in their entirety in the United States. If the bearings did in fact contain foreign made components of a substantial nature, it would be improper to mark the finished product as 'Made in USA' without a clear and conspicuous disclosure indicating the foreign country of origin of the imported components." [33 F.R. 15020, Oct. 8, 1968]

§ 15.296 "Failing company" theory applied in Commission approval of sale of assets to a competitor.

(a) The Commission issued an advisory opinion granting premerger clearance for a company in imminent danger of dissolution to sell all or part of its assets to a direct competitor.

(b) The selling company's financial affairs were in such state that it obviously would have ceased to be a competitive factor in its market in a matter of days. This being so, the Commission approved a sale to the only purchaser willing to, or in a position to, immediately salvage the assets.

[33 FR. 15021, Oct. 8, 1968]

§ 15.297 Premerger clearance "Failing company"-portion of fixed assets to be sold to keep company in business. The Commission advised an applicant that it has no present intention to take any action if the proposed sale of certain fixed assets to a direct competitor should be made, in view of the information submitted that:

(a) The (applicant) company is in critical financial condition and failing;

(b) Efforts to find other purchasers have been unsuccessful, except that one other purchaser was found who wished to buy a smaller amount of the assets than originally stated but who is not now in any position to buy any of the properties;

(c) The proposed sale is expected to generate sufficient funds to meet out

standing debts and provide necessary working capital to continue the company as a going concern and an active competitor.

[33 F.R. 15021, Oct. 8, 1968]

§ 15.299 Disclosure of origin of imported lenses finished domestically. (a) The Commission rendered an advisory opinion as to whether certain glass filter lenses used on welding helmets could be described as "Made in U.S.A.”

(b) Under the facts presented to the Commission, the glass out of which the lenses are made is imported and upon arrival in the United States it is subject to further processing, such as cutting into special sizes, grinding of the edges, cleaning, polishing, and labeling as to different shades of intensity and

packaging.

*

(c) In denying use of the "Made in U.S.A." mark on such a product, the Commission said: "* * a 'Made in U.S.A.' mark on the finished product would constitute an affirmative representation that the lenses are made in their entirety in the United States. Since the lenses are composed of imported glass, it would be improper to mark the finished product as 'Made in U.S.A.' without a clear and conspicuous disclosure indicating the foreign country of origin of the imported glass."

[33 F.R. 15021, Oct. 8, 1968]

§ 15.299 Disclosure of country of origin of repackaged goods imported in bulk.

The Commission advised a requesting party that a product imported in bulk into the United States and thereafter broken and wrapped into a number or smaller packages and offered for sale to the general public should be clearly and conspicuously marked as to country of origin in such way as to be readily observable to a prospective purchaser on casual inspection.

(38 Stat. 717, as amended; 15 U.S.C. 41-58) [35 F.R. 15199, Oct 11, 1968]

§ 15.300 Contest and its advertising by retailer deemed objectionable.

(a) The Commission was requested to furnish an advisory opinion concerning a proposed contest and advertising pertaining to it.

(b) The Commission observed that the proposed advertising is deceptive. Statements of the nature and value of the prizes are misleading. The proposed advertisement discloses little of the nature of the contest in which readers are invited to participate. The contest might expire at any moment.

(c) On the basis of the facts as presented, the Commission concluded that the proposed advertising, if circulated, would be in violation of section 5 of the Federal Trade Commission Act.

(d) The Commission noted that the proposed contest is so intertwined with the proposed advertising that the plan as a whole, if implemented, would be in violation of law.

[33 F.R. 15200, Oct. 11, 1968] § 15.301

ture.

"Danish" as applied to furni

In amplification of Rule 7-Deception as to Origin-set forth in its Trade Practice Rules for the Household Furniture Industry, the Commission advised the requesting party as follows:

(a) "Danish," "Danish Modern," and like terms should be used only as to furniture produced entirely within the Kingdom of Denmark;

(b) "Danish designed" and like terms should be used only as to furniture entirely designed or styled within the Kingdom of Denmark;

(c) "Danish style," "in the Danish manner," "after the Danish style," and like terms may be used to describe furniture manufactured other than in the Kingdom of Denmark provided such furniture has the characteristics of Danish design as understood by the general public.

[33 F.R. 15588, Oct. 22, 1968]

wholesalers, the coupons will be valid only for the week that the promotion is in effect. Supplying as many demonstrators and coupons as may be necessary to meet the demand therefor, larger stores will have as many as three girl demonstrators giving out coupons in attendance for 3 days and smaller stores will have one or two girls in attendance for 1 or 2 days. Participating manufacturers will pay the promoter a certain sum per each demonstrator, plus the amount of the value of the redeemed coupons. Participating retailers will receive nothing of value other than demonstrator services, except reimbursement for the exact value of the coupons which they have redeemed. In addition to being given out by the demonstrators, the "cents off" coupons will also be attached to the shelf in front of the product that is being promoted.

(c) For those stores which find the basic plan is not suitable or usable in a practical business sense, the promoter will furnish without charge an alternate plan consisting of a prominent bulletin board announcing the plan to consumers. Placed in the most advantageous position in the store by the owner, the bulletin board will also have an adequate supply of "cents off" coupons attached thereto. In addition, coupons will also be attached to the shelf in front of each product being promoted, as in the case of the basic plan involving the use of demonstrators. If the retailer does not wish to use the bulletin board, he will be permitted to hand out the coupons as the customer passes by the cash register.

(d) Notice of the availability of the basic and alternate plans will be made by (1) letter every 6 months to all wholesalers requesting them to notify their retail customers, (2) working with various trade associations on a continuous basis so that the associations will inform their members, (3) publishing ads every 3 months in two newspapers widely circulated among the trade, (4) letters sent to the buying offices of cooperatives and chain stores, and (5) use of the following statement printed on the back of each coupon: "For detailed information about this coupon call (promoter's name and telephone number)".

(e) In the opinion, the Commission stated that the proposed promotional

plan would not be in conformity with the law for the following two reasons:

(1) "First, section 2(e) of the amended Clayton Act requires that promotional services be furnished to all competing purchasers on proportionally equal terms, if a promotional service is furnished to one purchaser. If the length of time for which the service is being furnished varies as between competing customers, the end result will be that some customers will be furnished services in a greater proportion than others. In essence, the law requires that the services which are being furnished must be offered for a specified period of time which is uniformly applicable to all competing customers. Under your proposed plan, some stores may be furnished the services of demonstrators for up to 3 days, whereas some competing stores will be supplied with such services for only 1 or 2 days. Because of this disparity in the amount of time during which demonstrator services will be furnished, the Commission believes that the plan does not comply with the required statutory proportionally equal treatment.

(2) "The second defect in the proposed plan relates to the following statement which appears on the face of 'cents off' coupon: 'Good Today Only-During Demonstration.' According to the terms of the proposed plan, each coupon will be valid for 1 week. Therefore, the aforementioned statement which appears on the face of the coupon is misleading because it misrepresents the period of time during which one may take advantage of the alleged savings."

(f) The opinion then pointed out that if the promoter decided to correct the two above-mentioned deficiencies, the Commission would withdraw its objection to the plan, provided the following two conditions are met.

(1) "First, as the promoter of this plan, you must make it clear to each supplier and each retailer that even though an intermediary is employed, it remains the supplier's responsibility to take all reasonable steps so that each of the supplier's customers who compete with one another in reselling his products is offered either an opportunity to participate in the promotional assistance plan on proportionally equal terms or a suitable alternative if the customer is un

able as a practical matter to participate in the plan; 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.

(2) "Second, with respect to this matter of notification, you have outlined five methods which you expect to utilize. The Commission is withholding judgment as to the adequacy of the fifth method, namely, the use of a statement printed on the back of each coupon. It is doing so because it does not know how the retailer will get possession of this coupon and it believes that the statement itself is not sufficiently informative to apprise prospective retailers about the plan. But regardless of whether the stated methods of notification or others are used, the ultimate test is whether the plan has been effectively communicated to all competing customers at or about the same time within the selected marketing area and to those who, geographically, are located on the periphery of that area and in fact compete with the favored retailers." [33 F.R. 15588, Oct. 22, 1968]

§ 15.303 Commission does not object to program employing data processing equipment to collect and disseminate actual production and sales information.

(a) The Commission issued an advisory opinion telling an applicant it does not object to a proposed program to employ data processing equipment for the collection and dissemination of actual production and sales information rapidly.

(b) The program is to be made available to poultry processors. Individual identity of participants will not be revealed to others except in long-and-short emergencies. It is understood that such a situation exists when a processor finds he has an insufficient supply of chickens (i.e., he is "short") to fill the contractual obligation under a sales contract he has made; another supplier may have a surplus (ie., he is "long"); the proposed program, in these emergencies, would permit the short and long suppliers to communicate with each other through the data processing equipment. Only in such a situation would any participants learn each other's identity.