create a monopoly, or to unreasonably restrain trade, is an unfair trade practice. § 199.21 Selling below cost.

The practice of selling products of the industry at a price less than the cost thereof to the seller, with the purpose or intent, and where the effect may be, to injure, suppress, or stifle competition or tend to create a monopoly in the production or sale of such products, is an unfair trade practice. As used in this section, the term "cost" means the total cost to the seller, including the costs of acquisition, processing, preparation for marketing, sale, and delivery.

§ 199.22

Prohibited discrimination.'

(a) Prohibited discriminatory prices, or rebates, refunds, discounts, credits, etc., which effect unlawful price discrimination. In the marketing in commerce of products of the industry of like grade and quality for use, consumption, or resale within the jurisdiction of the United States, and subject to subparagraphs (1), (2), (3), and (4) of this paragraph, it is an unfair trade practice for any member of the industry engaged therein to discriminate in price between different purchasers 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 such industry member or with any person who knowingly receives the benefit of such discrimination or with their customers.

(1) The inhibitions against such discrimination in price shall be applicable irrespective of whether the discrimination in the price itself is effected in the form, or through the means, of rebates, refunds, discounts, credits, allowances, or other form of price differential.

(2) Nothing, however, contained in this paragraph shall prevent differentials which make only due allowance for differences in the cost of manufacture,

'As used throughout this section, the word "commerce" means "trade or commerce among the several States and with foreign nations, or between the District of Columbia or any Territory of the United States and any State, Territory, or foreign nation, or between any insular possessions or other places under the jurisdiction of the United States, or between any such possession or place and any State or Territory of the United States or the District of Columbia or any foreign nation, or within the District of Columbia or any Territory or any insular possession or other place under the jurisdiction of the United States."

sale, or delivery resulting from the differing methods or quantities in which the products are sold or delivered to said purchasers.

(3) Nor shall anything contained in this paragraph prevent persons engaged in selling products in commerce from selecting their own customers in bona fide transactions and not in restraint of trade.

(4) Nor shall anything contained in this paragraph prevent price changes from time to time where made in response to changing conditions affecting the market for or the marketability of the products concerned, such as but not limited to actual or imminent deterioration of perishable goods, obsolescence of seasonal goods, distress sales under court process, or sales in good faith in discontinuance of business in the products concerned.

(b) Prohibited brokerage or commissions. In the selling of industry products in commerce, it is an unfair trade practice for any member of the industry engaged therein to pay or grant, or to receive or accept, any 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 such products, either to the other party to such transaction or to an agent, representative, or other intermediary therein, where such agent, representative, or other 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. In the selling of industry products in commerce by any member of the industry, and in the course thereof, it is an unfair trade practice for such member to pay or contract for the payment of anything of value to or for the benefit of his customer as compensation or in consideration for certain services or facilities furnished by or through such customer, unless such payment or consideration is available on proportionally equal terms to all other customers of such member competing in the distribution of such products.

(1) As used in this paragraph, the certain services or facilities referred to are such as are furnished by or through the customer in connection with the process

ing, handling, sale, or offering for sale, of such industry member's products.

(d) Prohibited discrimination in services or facilities. In the sale of industry products bought for resale, with or without processing, 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 by furnishing certain services or facilities upon terms not accorded to all competing purchasers on proportionally equal terms.

(1) Said services or facilities referred to in this paragraph are such as are connected with the processing, handling, sale, or offering for sale, of the products purchased, and the term "furnishing" as used in this paragraph shall be construed as including contracting to furnish, and contributing to the furnishing of, the services or facilities.

(e) Inducing or receiving an illegal discrimination in price. It is an unfair trade practice for any member of the industry, in the course of commerce in which he is engaged, knowingly to induce or receive a discrimination in price which is prohibited by the foregoing provisions 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 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 sec. 2 (b), Clayton Act.) § 199.23 Discriminatory returns.

It is an unfair trade practice for any member of the industry engaged in commerce' to discriminate in favor of one customer-purchaser against another customer-purchaser of industry prod

See footnote to 199.22.

ucts, 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 proportionally equal terms, the service or facility whereby such favored purchaser is accorded the privilege of returning industry products so purchased and receiving therefor credit or refund of purchase price: Provided however, That nothing in any of the sections in Group I shall prohibit or be used to prevent the return of merchandise by purchaser, for credit or refund of purchase price, when and because such merchandise has not been properly labeled by the seller in accordance with these rules, or has been otherwise falsely or deceptively labeled or represented, or when and because such merchandise is defective in material, workmanship, or in any other respect is contrary to warranty or purchase contract.

§ 199.24 Aiding or abetting use of unfair trade practices.

§ 199.101 Disclosure of manufacturer's identity.

In order to avoid and prevent deception as to the identity of manufacturers of canvas covers and to aid in fixing responsibility for misrepresentation and deceptive concealment of the true facts concerning such canvas covers, it is the judgment of the industry that every manufacturer should indelibly and legibly stamp or mark on the canvas covers made by it, or on a durable tag or label securely attached to such canvas covers, the name or mark of identification of such manufacturer.

§ 199.102 Return of merchandise.

The practice, by members of the industry, of selling merchandise and later permitting the purchaser to return it for credit or refund of purchase price, without just cause, creates waste and loss, increases the cost of doing business, operates both to the detriment of the industry and the public, and is condemned by the industry.

§ 199.103 Repudiation of contracts. Lawful contracts are business obligations which should be performed in letter and in spirit. The repudiation of contracts by sellers on a rising market, or by buyers on a declining market, is condemned by the industry.

§ 199.104 Manner of disclosure of type of canvas material.

It is the recommendation of the industry that denomination of the type of canvas material of which a canvas cover is made be in accord with the nomenclature and definitions contained in Commercial Standard CS28-46 (Cotton Fabric Tents, Tarpaulins, and Covers) of the National Bureau of Standards.

39-064-75-15

tional literature, advertisement matter, guarantee, mark, brand, label, designation, or other form of representation, however disseminated or published, which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers with respect to the grade, quality, freedom from imperfections, color fastness, washability, fiber or material content, yardage, size, origin, fabrication, type of edge, manufacture, finishing, or distribution of any seam binding, or which is false, misleading, or deceptive in any other material respect.

§ 201.2

Identification and disclosure of fiber or material content.

(a) In the sale, offering for sale, or distribution of seam binding, it is an unfair trade practice to misrepresent or deceptively conceal the fiber or material content of any such product.

(b) Seam binding containing rayon, silk, or linen shall be identified as to its fiber and material content in labels, invoices, and advertisements, in accordance with the requirements of trade practice rules heretofore promulgated by the Commission for the rayon industry, silk industry, and linen industry: Provided, That seam binding containing, purporting to contain, or in any way represented as containing wool, reprocessed wool, or reused wool, shall be labeled in accordance with the requirements of the Wool Products Labeling Act of 1939 and the rules and regulations issued thereunder.

NOTE: A copy of the above-mentioned trade practice rules, and of the Wool Products Labeling Act of 1939 and the rules and regulations issued thereunder, may be obtained from the Commission by any industry member making request therefor.

§ 201.3 Disclosure of yardage.

In order that purchasers may not be deceived as to the yardage of seam binding and that misrepresentation and deceptive concealment in respect thereto may be avoided and prevented, the minimum yardage of the article should be clearly and nondeceptively marked on the product or on the disks, spools, bolts, cards, or other form of immediate packaging of the product; and the sale, offer for sale, or distribution of any seam binding not so marked, with the tendency and capacity or effect of misleading or deceiving purchasers or the consuming public, is an unfair trade practice.

To the end that misunderstanding, confusion, misrepresentation, and deception respecting the type of edge on seam binding may be avoided and prevented, clear, legible, and nondeceptive disclosure of the type of edge on such binding should be made on each disk, spool, bolt, card, or other form of immediate packaging thereof, by tag, label, stamp, or mark so affixed as to ensure that it will remain thereon until such binding reaches the ultimate user; and it is an unfair trade practice to misrepresent the type of edge on seam binding, or to cause any seam binding to be offered for sale, sold, or distributed, without making adequate, nondeceptive disclosure of the type of edge thereon, where failure to make such disclosure has the capacity and tendency or effect of misleading or deceiving purchasers.

The following are illustrative examples of the type of disclosure provided for in this section:

"CUT EDGE SEAM BINDING"

or

"SEAM BINDING, CUT FUSED EDGE"

§ 201.5

or

"WOVEN EDGE SEAM BINDING"

Deception as to origin.

With respect to any seam binding which has been imported from a foreign country into the United States in the greige or other unfinished state, or in a finished or semi-finished state, it is an unfair trade practice:

(a) To offer for sale, sell, or distribute any such seam binding under marks, stamps, brands, labels, or representations which have the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers, or the consuming public into the belief (1) that such seam binding was woven or fabricated in the United States, when such is not the fact; or (2) that it was dyed, finished, redyed, or refinished elsewhere than in the United States, when such is not true; or

(b) To offer for sale, sell, or distribute any such seam binding without the same being marked. stamped, branded, or labeled so as to indicate clearly and non

deceptively (1) the country of origin of the seam binding, or (2) that such seam binding was woven or fabricated in said country and was dyed or finished or redyed or refinished in the United States, as the case may be, where the failure, refusal, or omission to so mark, stamp, brand, or label such seam binding has the capacity and tendency or effect of thereby promoting, abetting, or effectuating the marketing of such products under conditions which are misleading or deceptive to purchasers, prospective purchasers, or the consuming public.

NOTE: Nothing in this section shall be construed as relieving any member of the industry or other party of the necessity of complying with requirements of the customs laws or regulations, or other applicable provisions of law or regulations, relating to the marking of imported articles.

§ 201.6 Selling below cost.

The practice of selling seam binding at a price less than the cost thereof to the seller, with the purpose or intent, and where the effect may be, to injure, suppress, or stifle competition or tend to create a monopoly in the production or sale of such products, is an unfair trade practice. As used in this section, the term "cost" means the total cost to the seller, including the costs of acquisition, processing, preparation for marketing, sale, and delivery.

This section is not to be construed as prohibiting all sales below cost, but only such selling below the seller's cost as is resorted to and pursued as a monopolistic practice with the wrongful intent referred to and where the effect may be unreasonably to restrain trade, tend to create a monopoly, or substantially lessen competition.

All elements recognized by good accounting practice as proper elements of such cost shall be included in determining cost under this section. The costs referred to in the section are actual costs of the respective seller and not some other figure or average costs in the industry determined by an industry cost survey or otherwise.

§ 201.7 False invoicing.

Withholding from or inserting in invoices, or sales slips 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 slips, with the capacity and tend

ency or effect of thereby misleading or deceiving purchasers, prospective purchasers, or the consuming public, is an unfair trade practice.

§201.8 Consignment distribution.

It is an unfair trade practice for any member of the industry to employ the practice of shipping seam binding on consignment or pretended consignment for the purpose and with the effect of artificially clogging or closing trade outlets and unduly restricting competitors' use of said trade outlets in getting their products to consumers through regular channels of distribution, thereby injuring, destroying, or preventing competition, or tending to create a monopoly or unreasonably to restrain trade. Nothing in this section shall be construed as restricting or preventing consignment shipping or marketing of seam binding in good faith where suppression of competition, restraint of trade, or undue interference with competitors' use of the usual channels of distribution, is not effected; nor shall anything in this section be construed to authorize any agreement, understanding, or common course of action by and between industry members to mutually conform or restrict their practice of shipping goods on consignment with the intent or effect of lessening competition.

§201.9 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 unlawfully to fix, maintain, or enhance prices, suppress competition, or restrain trade; or

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

201.10 Prohibited discrimination.'

(a) Prohibited discriminatory prices, or rebates, refunds, discounts, credits,

1As used in this section, the word "commerce" means "trade or commerce among the everal States and with foreign nations, or between the District of Columbia or any

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 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.

Territory of the United States and any State, Territory, or foreign nation, or between any insular possessions or other places under the jurisdiction of the United States, or between any such possession or place and any State or Territory of the United States or the District of Columbia or any foreign nation, or within the District of Columbia or any Territory or any insular possession or other place under the jurisdiction of the United States."