trade regulation rule its determination that in connection with the sale of general service incandescent electric lamps (light bulbs) in commerce, as "commerce" is defined in the Federal Trade Commission Act, it constitutes an unfair method of competition and an unfair and deceptive act or practice to:

(a) Fail to disclose clearly and conspicuously the following information for such lamps on the sleeves or paper containers in which they are packaged:

(1) The electrical power consumed expressed in average initial wattage;

(2) The light output expressed in average initial lumens;

(3) The average laboratory life expressed in hours;

Provided, however, Whenever lamps are sold in universal or interchangeable sleeves where no wattage, lumen, life, or voltage ratings are shown thereon, the disclosures required by paragraphs (a) and (b) of this section must be clearly and conspicuously made on the lamps themselves in a manner visible at point of sale in lieu of the disclosures on the sleeves.

(b) Fail to disclose clearly and conspicuously on the lamps themselves the average initial wattage and the design voltage for such lamps: Provided, however, Whenever lamps are sold out of the sleeves or paper containers the lumen and life disclosures required by paragraph (a) above shall in addition be clearly and conspicuously made on the lamps themselves.

(c) Represent or imply in any manner that savings either in lamp cost or cost of light will result from the use of certain lamps because of the lamps' life or light output (e.g., "Same light for less money", "Outlasts ordinary bulbs", "Save dollars for more light") unless in computing such savings the following factors are taken into account and clearly and conspicuously disclosed for the lamps with which comparison is being made and the lamps being offered for sale: Lamp cost, electrical power cost (wattage and electric rate), labor cost for lamp replacement (if any), actual light output in terms of average initial lumens, and average laboratory life: Provided, however, That when two lamps of identical average initial wattage, average initial lumens, and average laboratory life are being compared, and cost savings represented or implied apply only to initial purchase price, then the disclosures de

scribed in this paragraph for the lamp which is used for comparison need not be made.

(d) Represent or imply in any manner that certain lamps will give more light, maintain brightness longer or furnish longer life by the use of terms such as "long life", "extended life", "medium life", "brighter light", "better light", "stays brighter longer", or any other words or terms of similar meaning or import without clearly and conspicuously disclosing the light output in average initial lumens, the laboratory life in average hours and the average initial wattage of the lamps with which the comparison is being made and the lamps being offered for sale. In the case of claims that lamps "maintain brightness longer", there shall be, in addition to the lumen, life, and wattage disclosures required above, a clear and conspicuous disclosure of the light output after an interval equal to 70 percent of rated life (maintained average lumens) for the lamps being compared and those being offered for sale.

NOTE 1: The average initial wattage, average initial lumen and average laboratory life disclosures required by this section shall be in accordance with the requirements of interim Federal Specification, Lamp, Incandescent (Electric, Large, Tungsten-Filament), W-L-00101G and shall be based upon generally accepted and approved test methods and procedures. The lumen and life disclosures shall be expressed as averages, i.e., "average" lumens and "average" life. Lamps in shapes which are generally comparable to the "A" bulb shapes listed in this Federal specification should be measured by the criteria which are applicable to lamps in the nearest comparable shape of the same wattage and voltage even though such lamps may not be covered precisely by the specification. The calculation of average initial wattage, average initial lumen and average laboratory life ratings shall be determined on the basis of operation of the lamp at the stated design voltage. This, however, shall not preclude lumen disclosures for various voltage ratings of any specific lamp type of the same wattage and life from being represented as 120volt rated information, thereby recognizing a slight variation which, of necessity, must exist from one voltage rating to another if life and wattage are to remain constant.

Since multiple filament lamps (three-way bulbs) are not covered by the Federal specification; wattage, lumen and life ratings based on tests conducted by each industry member will be sufficient: Provided, Such tests are based upon generally accepted and approved test methods and procedures: And provided further, That the life rating is based on the life of the first filament which fails and that

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the specific method used to determine the life rating is disclosed, i.e., lamp being burned on all three positions equally; based on life of major filament (medium light level) of lamp, etc.

NOTE 2: For a period of one (1) year from the effective date of this section, except on the bulb itself, wherever the term "lumens" is used, there shall be a brief explanation of the term such as "light output".

NOTE 3: The term "general service in. candescent electric lamps" as used in this section includes all medium screw base, incandescent electric lamps, 15-watt through 150-watt, 115-volt through 130-volt. The term includes not only such lamps in the customary "A" type and other bulb shapes included in Interim Federal Specification W-L-00101G, but also such lamps which are produced

in generally comparable bulb shapes for sale in competition with other general service incandescent lamps. Specifically excluded, however, are lamps designed and promoted primarily for decorative applications, appliances, traffic signals, showcases, projectors, airport equipment, trains, and lamps such as color, flood, reflector, rough service, and vibration service.

NOTE 4: For purposes of paragraph (a) of this section, the requirement of clear and conspicuous disclosure means that the reF quired disclosures shall appear on at least two panels of the outer sleeve or container in which bulbs are displayed and additionally on all panels of the inner and the outer sleeve which contain any reference to wattage, lumens, life, or voltage. In addition, in order to be considered clear and conspicuous, the lumen and life disclosures shall be in immediate conjunction with the wattage rating on each panel in bold or medium faced type which is at least two-fifths (%) the height of the wattage rating figures (on the same panel) or three-sixteenths of an inch (16'') in height, whichever is larger.

In the case of multiple filament lamps (three-way bulbs); the lumen and life disclosures shall meet the above criteria except for the type size which shall, in this case, be medium faced type which is at least twofifths (%) the height of the wattage rating figures or one-eighth of an inch (%'') in height, whichever is larger.

(38 Stat. 717, as amended; 15 U.S.C. 41-58) [85 F.R. 11784, July 23, 1970]

method of competition and an unfair and deceptive act or practice to use any figure or size designation to refer to the size of the picture shown by a television receiving set or the picture tube contained therein unless such indicated size is the actual size of the viewable picture area measured on a single plane basis. If the indicated size is other than the horizontal dimension of the actual viewable picture area such size designation shall be accompanied by a statement, in close connection and conjunction therewith, clearly and conspicuously showing the manner of measurement.

NOTE 1: For the purposes of this part, measurement of the picture area on a single plane basis refers to a measurement of the distance between the outer extremities (sides) of the picture area which does not take into account the curvature of the tube.

NOTE 2: Any referenced or footnote disclosure of the manner of measurement by means of the asterisk or some similar symbol does not satisfy the "close connection and conjunction" requirement of this part. Examples of proper size descriptions when a television receiving set shows a 20-inch picture measured diagonally, a 19-inch picture measured horizontally, a 15-inch picture measured vertically, and a picture area of 262 square inches include:

"20 inch picture measured diagonally" or
"19 inch x 15 inch picture" or
"19 inch picture" or
"19 inch" or

"262 square inch picture."

Examples of improper size descriptions of a television set showing a picture of the size described above include:

§ 412.1

Basis of the proceeding.

(a) The Commission focused its attention on the wearing apparel industry after having received numerous complaints from small apparel retailers, small manufacturers and apparel salesmen. These complainants asserted that many manufacturers of apparel, particularly in the outerwear categories of women's and misses' dresses, suits, coats, sweaters and blouses, and men's and boys' suits, coats, slacks, shirts and sweaters, had discriminated in the granting of advertising allowances to their competing customers, in violation of section 2(d) of the Clayton Act, as amended. In order to obtain further information concerning the practices alleged in these complaints, the Commission in 1961 issued orders requiring approximately 230 of the leading buying offices, including the large department store chains, to file special reports, pursuant to section 6(b) of the Federal Trade Commission Act. Subsequently, additional orders were issued requiring over 400 sellers or suppliers of apparel, including approximately 35 suppliers of men's and boys' tailored clothing, to file similar reports. An examination of the data furnished in these reports indicated that violations of section 2(d) of the amended Clayton Act were widespread in the wearing apparel industry.1 Moreover, it appeared that such violations usually occurred in situations where sellers failed to furnish competing customers with written promotional plans.

(b) On the basis of the information developed by this inquiry, the Commission afforded those manufacturers or suppliers which it had reason to believe were engaged in practices violative of section 2(d) of the amended Clayton Act opportunity to enter into consent agree

1 Rabiner & Jontow, Inc., Docket No. 8629 (Sept. 19, 1966) p. 3.

ments which included orders to cease and desist from engaging in such unlawful practices. Of the more than 300 manufacturers or suppliers of apparel which were the subject of cease and desist orders subsequently issued, approximately 25 were manufacturers of men's and boys' tailored clothing.

(c) The Men's and Boys' Tailored Clothing Industry, a sizable segment of the apparel trade, comprised some 635 establishments according to the 1963 Census of Manufacturers published by the Bureau of the Census. In 1964 the net value of shipments by manufacturers amounted to almost two billion dollars. Representatives of this industry petitioned the Commission to initiate an informal enforcement program for obtaining industrywide compliance with section 2 (d) and (e) of the amended Clayton Act. In connection with this petition a preliminary inquiry into industry practices was conducted in the course of which interviews were had with knowledgeable sources, including other government agencies, trade associations and retail organizations. After giving consideration to the industry petition in the light of the information developed in this inquiry, together with that obtained in the earlier investigations, the Commission initiated a Trade Regulation Rule proceeding in the Men's and Boys' Tailored Clothing Industry. Before deciding upon this course of action, the Commission considered alternative methods of obtaining correction of the practices in question, including the caseby-case approach. It was concluded, however, that this purpose could be accomplished most expeditiously and equitably through the initiation of a Trade Regulation Rule proceeding. § 412.2 The Trade Regulation Rule proceeding.

(a) A notice of proposed rule making, including a proposed rule, was published in the FEDERAL REGISTER on November 9, 1966, affording all interested or affected parties an opportunity to submit data, views or arguments concerning the proposed rule, in writing or orally at a public hearing which was held on January 18, 1967. The proposed rule provided in sub

2 Abby Kent Co., Inc., et al., Docket No. C-328 et al. (Aug. 9, 1967).

3 Subsecs. (d) and (e) of sec. 2 of the Clayton Act, as amended, are set forth in an appendix to the rule.

stance that the granting or furnishing of advertising allowances or special services or facilities would be presumed to be unlawful unless made pursuant to a written plan furnished by the supplier to all of his competing customers.

(b) In the course of the public hearing, industry representatives asserted that violations of section 2 (d) and (e) of the amended Clayton Act were widespread in the industry and attributed this primarily to the absence of written promotional plans. In support of this assertion a representative of a men's and boys' clothing manufacturers association who estimated that considerably more than 60 percent of this industry's production is covered by cooperative advertising plans, introduced a summary of a survey conducted among some of its members representing a cross-section of the industry. This survey showed that out of 48 manufacturers, 36 believed that their competitors deviated from their oral plans and granted discriminatory allowances, whereas significantly fewer manufacturers felt that their competitors discriminated when written plans were involved. Of the manufacturers polled, approximately 77 percent were of the opinion that retailers pressured manufacturers to deviate from their

plans.

(c) Another association representing retail establishments selling men's wear referred to a survey made among its members which showed that of approximately 100 retailers of apparel polled, half believed that their suppliers discriminated among their customers in granting advertising allowances. Thirty expressed no opinion and 20 did not believe that manufacturers discriminated. It was stated that the ratio 50 believed yes and 20 no-fairly reflected the opinion of the entire membership of more than 3,000 members of the retail organization.

(d) According to both written and oral statements received in the proceeding many retailers, especially the larger ones, exert pressure on their suppliers for special treatment and even in the absence of such pressure oral arrangements by their nature are subject to deviations in an industry where many salesmen serve numerous customers. Industry representatives also expressed the opinion that the use of written plans supplied to all competing customers would enable a manufacturer to resist more successfully pressures for preferred treatment

66-034-72-32

brought by retailers, and thus better assure lawful treatment to all of the seller's competing customers.

(e) In summary, information received during the proceeding from attorneys, businessmen and association executives representing the manufacturing segment of the Men's and Boys' Tailored Clothing Industry fully supports the conclusion that the granting or furnishing of discriminatory advertising allowances or services in violation of section 2(d) of the amended Clayton Act is widespread in the Men's and Boys' Tailored Clothing Industry, and the further conclusion that such violations have occurred usually when sellers have failed to furnish their competing customers with written promotional plans.

(f) The information developed in this Trade Regulation Rule proceeding accords with the Commission's experience in the enforcement of section 2 (d) and (e) of the Clayton Act, as amended, particularly in the application of these statutory provisions to practices in the wearing apparel industry. It is not by coincidence that oral plans were involved in all of the litigated cases arising out of the 1961 investigation of the apparel industry and in all but one of the cases in the Men's and Boys' Tailored Clothing Industry disposed of by consent orders. On the basis of this information and experience, the Commission believes that written notification of promotional plans appears to be the most-and perhaps the only-completely reliable and fair method of assuring compliance with the law."

Rabiner & Jontow, Inc., Docket No. 8629 (Sept. 19, 1966), Gladstone-Arcuni, Inc., Initial Decision, Docket No. 8664 (Feb. 10, 1967), House of Lord's, Inc., Docket No. 8631 (Jan. 18, 1966), and Best & Co., Inc., Docket No. 8669 (Sept. 7, 1967).

5 House of Lord's, Inc., supra at p. 18; see also: Vanity Fair Paper Mills, Inc. v. Federal Trade Commission, 311 F. 2d 480, 485-486 (2d Cir. 1962).

For the purpose of this rule the following definitions apply:

(a) Products. Men's youths' and boys' suits, coats, overcoats, topcoats, jackets, dress trousers and uniforms.

(b) Seller. Any person, firm, corporation or organization engaged in the sale of products for resale with or without further processing.

(c) Customer or purchaser. Persons, firms, corporations or organizations engaged in the purchase of products for resale.

(d) Customers competing in the resale and competing customers. Mean those customers who compete with each other in the distribution of a seller's products. § 412.6 The Rule.

The Commission hereby promulgates as a Trade Regulation Rule its conclusions and determination that the granting or furnishing, in whole or in part, of any advertising payment or promotional allowance, service or facility, by any seller of men's, youths' and boys' suits, coats, overcoats, topcoats, jackets, dress trousers and uniforms to a customer engaged in the resale of such products, will be presumed not to have been made available on proportionally equal terms to all the seller's customers competing in the resale of such products within the purview of section 2 (d) and (e) of the amended Clayton Act, unless such payments or allowances, services or facilities. have been made available pursuant to and in accordance with all the terms and

conditions of a written plan supplied to all such competing customers.

APPENDIX

Set forth below are subsections (d) and (e) of section 2 of the Clayton Act, as amended: "(d) That it shall be unlawful for any person engaged in commerce to pay or contract for the payment of anything of value to or for the benefit of a customer of such person 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 person, unless such payment or consideration is available on proportionally equal terms to all other customers competing in the distribution of such products or commodities.

"(e) That it shall be unlawful for any person 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 purchasers on proportionally equal terms."