tor are impractical of fulfillment; and as also applicable to the use of any guarantee or warranty in respect of which the guarantor or warrantor fails or refuses to scrupulously observe his obligations thereunder.

(c) It is also an unfair trade practice to represent any bedding product as being "guaranteed" unless the nature and extent of the undertaking, and the identity of the guarantor are conjunctively disclosed.

§ 195.8 Deception through failure to differentiate between wholesale and retail transactions.

Where bedding products are sold at wholesale and at retail in the same establishment of a member of the industry, the commingling of the two types of business in such a manner as to have the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers is an unfair trade practice.

§ 195.9

Misuse of word "free."

Use of the word "free," or words of similar import, when employed to describe any product which is not in truth and in fact a gift or gratuity, or which is not given to the recipient thereof without requiring the purchase of other merchandise, or requiring the performance of some service inuring, directly or indirectly, to the benefit of the industry member using such term, is an unfair trade practice.

§ 195.10 False invoicing.

Withholding from or inserting in invoices or sales tickets any statements or information by reason of which omission or insertion a false record is made, wholly or in part, of the transactions represented on the face of such invoices or sales tickets, with the effect of thereby misleading or deceiving purchasers or prospective purchasers, is an unfair trade practice.

§ 195.11 Commercial bribery.

It is an unfair trade practice for a member of the industry, directly or indirectly, to give, or offer to give, or permit or cause to be given, money, or anything of value to agents, employees, or representatives of customers or prospective customers, or to agents, employees, or representatives of competitors' customers or prospective customers, without the knowledge of their employers or prin

cipals, as an inducement to influence their employers or principals to purchase or contract to purchase bedding products manufactured or sold by such industry member or the maker of such gift or offer, or to influence such employers or principals to refrain from dealing in the products of competitors or from dealing or contracting to deal with competitors. § 195.12 Defamation of competitors or disparagement of their products.

The defamation of competitors by falsely imputing to them dishonorable conduct, inability to perform contracts, questionable credit standing, or by other false representations, or the false disparagement of the products of competitors in any respect, or of their business methods, selling prices, values, credit terms, policies, or services, is an unfair trade practice.

§ 195.13 Use of lottery schemes.

The offering or giving of prizes, premiums, or gifts in connection with the sale of industry products, or as an inducement thereto, by any scheme which involves lottery or game of chance, is an unfair trade practice.

§ 195.14 Misrepresentation as to character of business.

It is an unfair trade practice for any member of the industry, in the course of or in connection with the distribution or sale of bedding products, to misrepresent the character, extent, or type of his business.

§ 195.15 Prohibited discrimination.3

(a) Prohibited discriminatory prices, 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

1 As used in this section, the word "commerce" means trade or commerce among the several States and Territories, including the District of Columbia, in accordance with the full scope of the definition of such term found in section 1 of the Clayton Act (38 Stat. 739; 15 USCA, sec. 12).

either or any of the purchases involved therein are in commerce, and where the 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;

(3) That nothing contained in this paragraph 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.

(b) Prohibited brokerage 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 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. 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 which is prohibited by the provisions of paragraphs (a) to (e) of this section.

(f) Exemptions. The inhibitions of this section shall not apply to purchases of their supplies for their own use by schools, colleges, universities, public 11braries, churches, hospitals, and charitable institutions not operated for profit.

(g) Purchases by U. S. Government; applicability of Robinson-Patman Antidiscrimination Act to same. In an opinion submitted to the Secretary of War under date of December 28, 1936, the U. S. Attorney General advised that the Robinson - Patman Antidiscrimination Act "is not applicable to Government contracts for supplies." (38 Opinions Attorney General 539.)

§ 195.16 Discriminatory returns.

It is an unfair trade practice for any member of the industry engaged in com

merce to discriminate in favor of one customer-purchaser against another customer-purchaser of bedding products, bought from such member of the industry for resale, by contracting to furnish, or furnishing in connection therewith, upon terms not accorded to all competing customer-purchasers on proportionately equal terms, the service or facility whereby such favored purchaser is accorded the privilege of returning bedding products so purchased and receiving therefor credit or refund of purchase price: Provided, however, that nothing in this part shall be construed as prohibiting the return of merchandise by purchaser, for credit or refund of purchase price, when and because such merchandise has not been properly tagged, labeled, or marked by the seller in accordance with the requirements of this part, or has been otherwise falsely or deceptively tagged, labeled, or represented, or when and because such merchandise is defective in material, workmanship, or in any other respect is contrary to guarantee, warranty, or purchase contract.

§ 195.17

Combination or coercion to fix prices, suppress competition, or restrain trade.

It is an unfair trade practice for a member of the industry:

(a) To use, directly or indirectly, any form of threat, intimidation, or coercion against any member of the industry or other person to unlawfully fix, maintain, or enhance prices, suppress competition, or restrain trade; or

(b) To enter into or take part in, directly or indirectly, any agreement, un derstanding, combination, conspiracy, or concerted action with one or more members of the industry, or with one or more persons, to unlawfully fix, maintain, or enhance prices, suppress competition, or restrain trade. § 195.18

Imitation or simulation of trade-marks, trade names, etc.

The imitation or simulation of the trade-marks, trade names, brands, or labels of competitors, with the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers, or the consuming public, is an unfair trade practice.

1 See footnote to § 195.15.

§ 195.19 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 §§ 195.1 to 195.18.

§ 195.20 Push money.

It is an unfair trade practice for any industry member to pay or contract to pay anything of value to a salesperson employed by a customer of the industry member, as compensation for, or as an inducement to obtain, special or greater effort or service on the part of the salesperson in promoting the resale of products supplied by the industry member to the customer:

(a) When the agreement or understanding under which the payment or payments are made or are to be made is without the knowledge and consent of the salesperson's employer; or

(b) When the terms and conditions of the agreement or understanding are such that any benefit to the salesperson or customer is dependent on lottery or chance; or

(c) When any provision of the agreement or understanding requires or contemplates practices or a course of conduct unduly and intentionally hampering sales of products of competitors of an industry member; or

or

(d) When, because of the terms and conditions of the understanding agreement, including its duration, or the attendant circumstances, the effect may be to substantially lessen competition or tend to create a monopoly; or

(e) When similar payments are not accorded to salespersons of competing customers on proportionally equal terms in compliance with section 2 (d) and (e) of the Clayton Act, as amended.

NOTE: Payments made by an industry member to a salesperson of a customer under any agreement or understanding that all or any part of such payments is to be transferred by the salesperson to the customer, or is to result in a corresponding decrease in the salesperson's salary, are not to be considered within the purview of this section 20, but are to be considered as subject to the requirements and provisions of section 2(a) of the Clayton Act, as amended. [20 FR. 332, Jan. 14, 1955]

§ 196.1 Misrepresentation.

It is an unfair trade practice to make any statement or representation, by way of advertisement, product demonstration, or otherwise, which is false, misleading, or deceptive, or which, directly or by reason of concealment of material fact, has the capacity and tendency or effect of misleading or deceiving purchasers or users of industry products (a) with respect to the quality, size, capacity, durability, serviceability, life, performance, mode of operation, currency of meter, design, construction, or constituent materials of any product of the industry; or (b) with respect to any service offered, promised, or to be supplied to purchasers of such products; or (c) with respect to the manufacture, distribution, servicing, or terms or conditions of sale, of any industry product; or in any other material respect.

§ 196.2 Defamation of competitors or interfering with or disparaging their products.

(a) The defamation of competitors by falsely imputing to them dishonorable conduct, inability to perform contracts, questionable credit standing, or by other false representations, or the false disparagement of competitors' products in any respect, or the false disparagement of then business methods, selling prices, values, credit terms, policies, or services, is an unfair trade practice.

(b) Likewise, the demonstration of obsolete models of a competitor's product as and for current models, and the deliberate tampering with, damaging, or destroying of competitors' products so as to disparage the products in the eyes of customers or prospective customers, is an unfair trade practice.

(c) Nothing in paragraphs (a) and (b) of this section shall be construed as preventing the full, fair, and nondeceptive comparison, by demonstration or otherwise, of competitors' meters with the meter of another industry member before public officials or other purchasers or prospective purchasers.

§ 196.3 Misrepresentation as to character of business.

It is an unfair trade practice for any industry member, in the course of or in connection with the distribution of industry products, to represent, directly or indirectly, that he is a manufacturer of industry products, or that he owns or controls a factory making such products, when such is nọt the fact, or in any other manner to misrepresent the character, extent, or type of his business.

§ 196.4 Deceptive use of trade or corporate names or trade-marks, etc.

The use of any trade name, corporate name, trade-mark, or other trade designation which has the capacity and tendency or effect of misleading or deceiving purchasers or users as to the character, name, nature, efficacy, or origin of any product of the industry, or any material used therein, or which is false or misleading in any other respect, is an unfair trade practice.

§ 196.5 Imitation of trade-marks, trade names, etc.

The imitation or simulation of the trade-marks, trade names, brands, or labels of competitors, with the capacity and tendency or effect of misleading or deceiving purchasers or users of industry products, is an unfair trade practice. $196.6 Deception as to rebuilt or second-hand products.

(a) It is an unfair trade practice for any member of the industry to sell, offer for sale, advertise, or otherwise represent, any product of the industry as being new when such is not the fact.

(b) In the marketing of rebuilt or second-hand products of the industry, or parts thereof, or in the marketing of products containing rebuilt or secondhand parts, it is an unfair trade practice to conceal, or fail or refuse to fully and nondeceptively disclose by effective means of identification (such as by tag, label, stamp, or mark firmly affixed to the products, or the immediate containers thereof in which sold and delivered to the consumer, or by invoice, bill or delivery slip accompanying the article and delivered to the purchaser therewith), the fact that such products, or all or certain parts contained therein, are not new, or are used, second-hand, rebuilt, repaired, or refinished after use, when such products have the appearance of being new and such concealment

and nondisclosure have the capacity and tendency or effect of misleading the purchaser or the consuming public.

§ 196.7 Commercial bribery.

(a) It is an unfair trade practice for a member of the industry, directly or indirectly, to give, or offer to give, or knowingly permit or cause to be given, money or anything else of value to agents, employees, or representatives of customers or prospective customers, or to agents, employees, or representatives of competitors' customers or prospective customers, without the knowledge of their employers or principals, as an inducement to influence their employers or principals to purchase or contract to purchase industry products manufactured or sold by such industry member or the maker of such gift or offer, or to influence such employers or principals to refrain from dealing in the industry products of competitors or from dealing or contracting to deal with competitors.

(b) For the purpose of §§ 196.1 to 196.18, inclusive, paragraph (a) of this section will be construed to embrace bribery and attempted bribery of elected or appointed public officials and employees or agents of municipal, county, parish, or State governments, or of the Federal Government, or of any branch or division thereof.

§ 196.8 Inducing breach of contract.

(a) It is an unfair trade practice to induce or attempt to induce the breach of existing lawful contracts between competitors and their customers or their suppliers by any false or deceptive means whatsoever, or to interfere with or obstruct the performance of any such contractual duties or services by any such means, with the purpose and effect of hampering, injuring, or prejudicing competitors in their business.

(b) It is an unfair trade practice to instigate, back, or finance harassing taxpayers' suits as a means of engaging in the practices condemned in this section.

(c) For the purposes of this section, an ordinance legally adopted by the council or other legislative body of a municipality or other governmental unit, ordering or authorizing the execution of a contract between such municipality or other governmental unit and a member of the industry, shall be considered in all respects the same as a contract and be entitled to the same protection.