ers 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 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. § 188.11 Imitation of trade-marks, etc. It is an unfair trade practice to imitate or cause to be imitated, or directly or indirectly to promote or aid the imitation of, the trade-marks, trade names, other exclusively owned symbols or marks of identification of competitors, or the exclusively owned designs or patterns of competitors which have not been directly, or by operation of law, dedicated to the public, where such imitation has the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers, or the consuming public. § 188.12 Defamation of competitors or disparagement of their products. It is an unfair trade practice to defame competitors by falsely imputing to them dishonorable conduct, inability to perform contracts, questionable credit standing, or by other false representations; or to falsely disparage the grade, quality, or manufacture of the products of competitors, or their business methods, selling prices, values, credit terms, policies, services, or conditions of employment. § 188.13 Fictitious price lists. It is an unfair trade practice for any member of the industry to publish or circulate false or misleading price quotations, price lists, terms or conditions of sale, or reports as to production or sales, with the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers, suppliers, prospective suppliers, or the consuming public. § 188.14 Prohibited discrimination.1 (a) Prohibited discriminatory prices, or discounts, rebates, refunds, credits, 1 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 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 discount, rebate, refund, credit, freight or other transportation cost or any percentage thereof, or other form of price differential, where such discount, rebate, refund, credit, freight or other transportation cost or any percentage thereof, 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 actual or imminent deteriora 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. tion of perishable goods, 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 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. (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 paragraphs (a) to (d) of this section. (f) Prohibited 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 a tie fabric, 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 all or part of the fabric so purchased and receiving therefor credit or refund of purchase price: Provided, however, Nothing in §§ 188.1 to 188.17 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 been falsely or deceptively labeled or represented, or when and because such merchandise is defective in material, workmanship, or in other respect is contrary to guarantee, warranty, or purchase contract. (g) 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. § 188.15 Combination or coercion to fix prices, suppress competition, or restrain trade. It is an unfair trade practice for a member of the industry, or any other person: (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, understanding, combination, conspiracy, or concerted action with one or more members of the industry, or with one or more other persons, to unlawfully fix, maintain, or enhance prices, suppress competition, or restrain trade. § 188.16 Consignment selling or deliveries "on memorandum.” (a) It is an unfair trade practice for any member of the industry to use the practice of shipping goods on consignment or pretended consignment, or of delivering goods "on memorandum," (1) When such practice is so used, or the terms and conditions thereof so varied or arranged, as to effectuate a discrimination prohibited by the provisions of 188.14; or (2) When such consignment, pretended consignment, or delivery "on memorandum," is used for the purpose and with the effect of artificially clogging trade outlets and unduly restricting competitors' use of said trade outlets in getting their goods to purchasers or consumers through regular channels of distribution, and thereby injuring, preventing, or destroying competition, tending to create a monopoly, or unreasonably restraining trade. (b) Nothing in this section, however, shall be construed or used as preventing or restricting consignment shipping, or marketing “on memorandum,” when carried out in good faith and without the wrongful purposes or effects specified in paragraph (a) (1) and (2) of this section. § 188.17 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 188.1 to 188.16. GROUP II § 188.101 Saturday and Sunday closings. In the interest of the public and of itself, the industry urges all members of the industry to adhere to the practice of not opening their sales offices on Saturdays and Sundays for the transaction of business. § 188.102 Use of written sales contracts. (a) In order to avoid ambiguity and misunderstanding between buyers and sellers, all purchases and sales of products of the industry exceeding one piece, regardless of the total value thereof, should be made by written contract, signed by the buyer and seller. Such written contract should set forth the actual terms and conditions of the sale involved. (b) Wherever practicable, the delivery of all merchandise of any quantity should be made against a written receipt signed by the purchaser or a qualified agent or employee of the purchaser. (c) The provisions of this section shall not be construed as sanctioning or approving any agreement among competitors or any planned common course of action among competitors to agree upon or to fix, specify, or determine the prices, discounts, terms, or conditions of sale to be covered in any sales contract or transaction, but these shall be open to individual negotiation between the seller and buyer, subject to the requirements of §§ 188.1 to 188.17 and applicable provisions of law. § 188.103 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. § 188.104 Use of samples. The industry disapproves the giving of samples without charge in greater quantity than actually necessary to acquaint purchasers or prospective purchasers with the grade or quality of the product offered for sale. However, the furnishing of any samples shall not be carried out in a manner involving discrimination prohibited by the provisions of § 188.14. § 188.105 Arbitration of disputes. The industry approves and recommends the use of commercial arbitration for the speedy and efficient disposition of disputes arising out of the sale, processing, and distribution of products of the industry. § 188.106 Registration of original and novel designs. The industry recommends that all members should register their original and novel designs, not directly or by operation of law dedicated to the public, with an accepted industry design registration bureau to the end that unauthorized copying of designs and the resultant confusion and misunderstanding be eliminated and appropriate information as to design in use be fully available to the industry. § 188.107 Use of uniform standards for examination of finished piece goods. For the visual examination of finished piece goods, the industry recommends that uniform standards, which are equitable as between buyer and seller and fair to the trade and purchasing public, be used in the settlement of disputes concerning the quality of the industry's goods. Nothing in this section, however, shall be construed as warranting classification of any fabric of the industry as a "first" when not fully qualified for such designation; and in this connection, industry members recognize it as their obligation to in nowise contribute to any misrepresentation or deception as to grade, quality, or otherwise, in the further marketing of the fabric or products made therefrom. PART 189-FINE AND WRAPPING PAPER DISTRIBUTING INDUSTRY GROUP I Sec. 189.1 189.2 189.8 189.4 189.5 189.6 189.7 189.8 189.9 189.10 189.11 189.12 189.13 189.14 189.15 189.16 Misrepresentation in general. Deception as to available supply of False and misleading price quota- Misrepresenting products as con- Procurement of competitors' con- Combination or coercion to fix Prohibited discrimination. 189.17 Abetting use of unfair trade practices. Sec. COMMITTEE ON TRADE PRACTICES 189.201 Industry committee. AUTHORITY: The provisions of this Part 189 issued under secs. 6, 5, 38 Stat. 721, 719; 15 U.S.C. 46, 45. SOURCE: The provisions of this Part 189 appear at 15 F.R. 2901, May 16, 1950, unless otherwise noted. § 189.1 GROUP I Misrepresentation in general. It is an unfair trade practice to use, or cause or promote the use of, any trade promotional literature, advertising matter, mark, brand, label, designation, or other 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, quantity, price, value, origin, size, weight, strength, thickness, use, preparation, composition or "furnish", packing, count, finish, manufacture, distribution of any product of the industry, or in any other material respect. 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 industry products, to represent, directly or indirectly, that he is a manufacturer, wholesaler, distributor, or retailer of industry products when such is not the fact, or in any other manner to misrepresent the character, extent, or type of his business. § 189.3 Deception as to available supply of advertised merchandise. The advertising or offering for sale of small and inadequate supplies (whether as closeouts or otherwise) of well-known brands of products at greatly reduced or bargain prices without disclosure of the quantity or of the inadequacy of the supply available at such prices, with the capacity and tendency or effect of thereby misleading or deceiving the purchasing or consuming public, is an unfair trade practice. § 189.4 False invoicing. Withholding from or inserting in an invoice, billing, or statement any mate rial information by reason of which omission or insertion a false record is made, wholly or in part, of the transaction which such invoice, billing, or statement purports to represent, with the purpose and effect of thereby misleading or deceiving purchasers, prospective purchasers, or the consuming public, is an unfair trade practice. § 189.5 False and misleading price quotations, etc. The publishing or circulating by any member of the industry of false or misleading price quotations, price lists, or terms or conditions of sale, with the capacity and tendency or effect of thereby misleading or deceiving purchasers or prospective purchasers, is an unfair trade practice. § 189.6 Misrepresenting products as conforming to standard. Representing, through advertisment or otherwise, that any products of the industry conform to a standard recognized in or applicable to the industry when such is not the fact, with the capacity and tendency or effect of misleading or deceiving the purchasing or consuming public, is an unfair trade practice. § 189.7 Imitation or simulation of trademarks, 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 the purchasing or consuming public, is an unfair trade practice. § 189.8 Deceptive use of trade or corporate names, 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 the purchasing or consuming public as to the name, nature, or origin of any product of the industry or of any material used therein, or which is false or misleading in any other respect, is an unfair trade practice. the capacity and tendency or effect of misleading or deceiving the purchasing or consuming public, is an unfair trade practice. NOTE: Nothing in this section shall be construed as preventing the application of such tolerances as are agreed upon between buyer and seller or are otherwise deemed reasonable and proper and where no misrepresentation or deception of the purchasing public is practiced or promoted in relation to the product or its deviation from sample or specifications. § 189.10 Enticing away employees of competitors. It is an unfair trade practice for any member of the industry wilfully to entice away employees of competitors with the intent and effect of thereby unduly hampering or injuring competitors in their business and destroying or substantially lessening competition: Provided, That nothing in this section shall be construed as prohibiting employees or agents from seeking or obtaining more favorable employment. § 189.11 Procurement of competitors' confidential information by unfair means and wrongful use thereof. It is an unfair trade practice for any member of the industry to obtain information concerning the business of a competitor by bribery of any employee or agent of such competitor, by false or misleading statements or representations, by the impersonation of one in authority, or by any other unfair means, and to use the information so obtained in such manner as to injure said competitor in his business or to suppress competition or unreasonably restrain trade. ! ་་ 2 |