tional and undisclosed charge is made for processing and fitting services that are necessary and made evident after first use by the buyer and during the period required for his adjustment to the use of such lenses;

(e) Representing or implying in idvertising that products may be purchased on credit for the same price that is applicable to cash sales; that no down payment is required in the case of credit sales; that no finance charge or interest is required when products are sold on credit or an installment payment plan; or that a finance or interest charge in the case of sales on credit will not exceed a specified amount or rate; when such are not the facts.

NOTE: On December 20, 1963, the Commission adopted Guides Against Deceptive Pricing which became effective January 8, 1964. Copies thereof will be furnished upon request.

[Rule 61

[31 F.R. 10667, Aug. 11, 1966]

8 192.7 Prohibited payments by dispensers to doctors: prohibited tying of refractions with dispensing, etc. (a) As used in this section, the word "doctor" makes reference to any ophthalmologist, oculist, physician, or optometrist, who makes ophthalmic refractions for a patient and prescribes eyeglasses or contact lenses for the correction or improvement of the vision of such patient, and the word "dispenser" makes reference to any party who supplies eyeglasses or contact lenses, so prescribed, to any such patient. The terms are to be understood as embracing any agent, representative, or employee of the doctor or dispenser, and any employer, principal, or associate, corporate or otherwise, for which either acts or purports to act.

(b) It is an unfair trade practice for any dispenser to make or give directly or indirectly, to any doctor (whether such dispenser acts or purports to act as an agent of the doctor or otherwise), any payment arising out of or connected with his (the dispenser's) sale or dispensing of eyeglasses or contact lenses to a patient of such doctor, whether such payment be in the form of, or is described or regarded as, a rebate, credit, credit balance, gift, dividend, participation in or share in profits, or otherwise; or for a dispenser to enter into or participate in any agreement, understanding, scheme, plan, or concert of action, with

any doctor, or with any other party or parties, which provides for, or facilitates, any such payments.

NOTE 1: It is to be understood that paragraph (b) of this section does not have application to the dispensing of eyeglasses or contact lenses by a doctor (either himself or through a bona fide employee) in his own professional offices. Such dispensing is, however, to be considered as among the practices which are subject to the prohibitions of paragraph (c) of this section.

NOTE 2: In 1951, in actions instituted by the Department of Justice, decrees were entered in the United States District Court for the Northern District of Illinois, Eastern Division, which have application to oculists and ophthalmologists as a class, as well as other defendants, including ophthalmic dispensers. These decrees perpetually enjoin such doctors:

"(a) From accepting, directly or indirectly, or designating any person to thus accept, from any dispenser (whether such dispenser acts or purports to act as an agent of the doctor, or otherwise), any payment arising out of or connected with dispensing to any patient of such defendant doctor, whether such payment is in the form of, or is described or regarded as, a rebate, credit, credit balance, gift, dividend, participation in or share in profits, or otherwise;

(b) Entering into or participating in any plan, arrangement, or scheme whereby said defendant doctor receives from any dispenser (whether such dispenser acts or purports to act as agent of the doctor, or otherwise) directly or indirectly in any form (including any of the forms and methods referred to above) any payment arising out of or connected with dispensing to any patient of such defendant doctor."

with explanation that the term "dispenser," as so used, does not have application “to a refractionist who engages in dispensing in his own professional offices (either himself or through a bona fide employee) to his own patients only." These decrees remain in force and effect, and nothing in this section, or any of the other sections, is to be construed as relieving any industry member or other party subject to such decrees from complying with the requirements and provisions thereof. In the interest of clarifying certain of the requirements of these decrees the Department has issued opinions in the form of three letters bearing dates of May 28, 1951, September 10, 1951, and September 24, 1951, which are set forth in an appendix to this part.

(c) It is an unfair trade practice to tie in or condition eye refraction service for a patient with the dispensing of the prescribed eyeglasses or contact lenses to the patient, when such practice effects, or has a reasonable probability of effecting, substantial injury to competi

tion, or creates or tends to create a monopoly, at any competitive level in the trade area or areas where the practice is employed.

NOTE: To be considered as subject to the prohibitions of paragraph (c) of this section, when effecting, or having a reasonable probability of effecting, substantial injury to competition at any competitive level in the trade area or areas where the practice is employed, are tyings of dispensing with refractions which are accomplished by:

(1) Refusal of the doctor to perform refractions, or to supply prescriptions based thereon, when and because the patient desires to have the dispensing of the product done by another party lawfully qualified to dispense same.

(2) The doctor requiring a higher fee for his refraction service when he does not dispense the products he prescribes than when he does dispense such products.

(3) The doctor falsely disparaging the competency or workmanship of others competing with him in the dispensing of the products.

See also § 192.15 of this part, entitled "False Disparagement of Competitors or Their Products," § 192.16 of this part, entitled "Coercing Purchase of One Product as a Prerequisite to the Purchase of Another or Other Products," § 192.20 of this part, entitled "Prohibited Forms of Trade Restraints (Unlawful Price Fixing, Etc.)" and § 192.21 of this part, entitled "Exclusive Dealing," which are applicable to all industry members. [Rule 7]

§ 192.8

Prohibited discrimination.

(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 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, and are not purchased by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit, as supplies for their own use;

(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;

NOTE 1: Cost justification to be based on net savings in cost of manufacture, sale or delivery. Cost justification under the above proviso depends upon net savings in cost based on all facts relevant to the transactions under the terms of subparagraph (2) of this paragraph. For example, if a seller regularly grants a discount based upon the purchase of a specified quantity by a single order for a single delivery, and this discount is justified by cost differences, it does not follow that the same discount can be cost Justified if granted to a purchaser of the same quantity by multiple orders or for multiple deliveries.

NOTE 2: Credit or refund for returned goods. In determining whether a price differential based on cost savings under the above proviso is warranted there shall be taken into account any portion of the goods involved which are returned by the customer-purchaser to the seller for credit or refund. See also Note under paragraph (e) of this section.

(3) That nothing contained in this section 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;

(5) That nothing contained in this section shall prevent the meeting in good faith of an equally low price of a competitor.

NOTE 1: In complaint proceedings, justification of price differentials under subparagraphs (2), (4) and (5) of this paragraph

is a matter of affirmative defense to be established by the person or concern charged with price discrimination.

NOTE 2: Subsection (b) of section 2 of the Clayton Act, as amended, reads as follows: "Upon proof being made, at any hearing on a complaint under this section, that there has been discrimination in price or services or facilities furnished, the burden of rebutting the prima facie case thus made by showing justification shall be upon the person charged with a violation of this section, 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."

(b) The following are examples of some of the price differential practices which are to be considered as subject to the prohibitions of paragraph (a) of this section when:

(1) The commerce requirements specified in paragraph (a) of this section are present; and

(2) The goods involved are of like grade and quality and are sold for use, consumption, or resale within any place under the jurisdiction of the United States, and are not purchased by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit, as supplies for their own use; and

(3) The price differential has a reasonable probability of substantially lessening competition or tending to create a monopoly in any line of commerce, or of injuring, destroying, or preventing competition with the industry member or with the customer knowingly receiving the benefit of the price differential, or with customers of either of them; and

(4) The price differential is not justified by cost savings (see paragraph (a) (2) of this section); and

(5) The price differential is not made in response to changing conditions affecting the market for or the marketability of the goods concerned (see paragraph (a) (4) of this section); and

(6) The lower price was not made to meet in good faith an equally low price of a competitor (see paragraph (a) (5) of this section).

EXAMPLE 1: Payment terms of 2/10th prox. are granted by an industry member to

some customers on goods purchased by them from the industry member. Another customer or customers are, nevertheless, allowed to take a 5% instead of a 2% discount when making payment to the industry member within the time prescribed.

EXAMPLE 2: An industry member sells goods to one or more of his customers at a lower price than he charges other customers therefor, basing his justification for the price difference solely on the fact that the goods sold at the lower price bear the private brand name of customers.

EXAMPLE 3: An industry member sells goods to one or more of his customers at a higher price than he charges other customers for like merchandise. It is immaterial whether the goods sold at the lower price are classified by the industry member as "seconds," "secondary line," "rejects," or are otherwise represented by the industry member as inferior, if in fact of like grade and quality as the goods sold at the higher price.

EXAMPLE 4: An industry member sells, to a customer, which operates as both a wholesaler and a retailer, industry products which the customer resells in its capacity as a retailer, and the industry member charges such customer a lower price therefor than such industry member charges other retailers for like products.

(c) Prohibited brokerage and commission: 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.

(d) 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 service 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 made known to and is available on proportionally equal terms to all other customers competing in the distribution of such products or commodities.

NOTE 1: Industry members giving allowances for advertising or sales promotion must, in addition to according same to all competing customers on proportionally equal terms, exercise precaution and diligence in seeing that all such allowances are used by the customers for such purpose. Customers receiving such allowances must not use same for any other purpose.

When an allowance is made ostensibly for advertising or sales promotion of products and is not in fact used for that purpose the practice may constitute a price discrimination. In such case, the party giving the allowance may violate paragraph (a) of this section and the party receiving same may violate paragraph (f) of this section.

NOTE 2: When an industry member gives allowances to competing customers for advertising in a newspaper or periodical, the fact that a lower advertising rate for equivalent space is available to one or more, but not all, such customers, is not to be regarded by the industry member as warranting the retention by such customer or customers of any portion of the allowance for his or their personal use or benefit.

(e) Prohibited discriminatory services of 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 made known to and accorded to all competing purchasers on proportionally equal terms.

NOTE NO. 1: Subsection (b) of section 2 of the Clayton Act, as amended, which is set forth in the note concluding paragraph (a) of this section is applicable to paragraph (e) of this section.

NOTE No. 2: Among the practices prohibited by paragraph (e) of this section is that of an industry member according to one or more customers the privilege of returning for credit or refund any or all of the goods purchased by them and failing to accord the same privilege to another or other competing customers on proportionally equal terms. In this connection see also Note No. 2 under cost justification proviso (paragraph (a)(2) of this section).

(a) In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice:

(1) To misrepresent the origin or place of manufacture of an industry product or any part thereof; or

(2) Subject to the exemptions hereinafter specified, to fail to adequately disclose that an industry product, or any substantial part thereof, is of foreign origin, or has been manufactured, processed, or assembled in a foreign country, when the failure to make such disclosure has the capacity and tendency or effect of deceiving purchasers or prospective purchasers.

(b) The disclosure required by paragraph (a) (2) of this section shall be in the form of a legible marking or stamping on the industry product, or on a label or tag which is affixed thereto with such degree of permanency as to remain on or attached to the product, in legible form, until consummation of the consumer sale thereof, and shall be of such conspicuousness as to be likely observed by purchasers and prospective purchasers making casual inspection of the product. The disclosure shall name the foreign country of origin or manufacture, and when not applicable to the entire product, shall specify the part or parts to which it has applicability. If such disclosure on the product is concealed or obscured by reason of packaging or manner in which it is mounted in a container or on a display card, and is displayed and offered for consumer sale in such form, then the disclosure shall also appear on such packaging, container, or display card with such conspicuousness as to be likely observed by consumer purchasers and prospective consumer purchasers before consummation of their purchase of the product.

EXEMPTIONS: To be regarded as exempt from the disclosure requirements of paragraph (a)(2) of this section are:

Sheet, wire, tubing, and similar basic material, whether of plastic, metal, or other substance, when imported in that form; and

Rivets, springs, screws, bolts, brads, washers and similar small parts of eyeglass frames, when imported in an unassembled state and thereafter used in the manufacture of eyeglass frames;

Small and basically decorative and nonfunctional imported parts; and

Imported parts, which because of substantial domestic processing or merger with other parts after importation, no longer retain the appearance and essential characteristics possessed by them at the time of their importation.

Norz: In this connection it is to be understood that the installation of lenses into frames in this country, though involving cutting, edging, and beveling of the lenses, and boring of holes in the frames or edges of the lenses, does not exempt from the requirements of paragraph (a)(2) of this section when either the lenses or frames so assembled, or both such parts, have been imported from a foreign country.

NOTE: Nothing in this section is to be construed as relieving any industry member from compliance with the requirements of custom laws of the U.S. having application to industry products and parts imported from a foreign country.

[Rule 9]

8 192.10 Misrepresenting products as conforming to a standard.

In the sale, offering for sale or distribution of industry products, it is an unfair trade practice to represent, directly or indirectly, that any such product, or any part thereof, has been designed or constructed 30 as to conform to a standard when:

(a) No disclosure is made of the identity of the standard (whether private, official, or otherwise); or

(b) The standard to which reference is made has been rescinded, amended, or superseded, and no disclosure is made of such fact; or

(c) The product or part does not fully conform to the requirements of the standard. [Rule 101

192.11 Misrepresentation as to character of business.

It is an unfair trade practice for any industry member, in connection with his sale, offering for sale, or distribution of industry products, to misrepresent the character, extent, or type of his business. [Rule 11]

§ 192.12 False invoicing.

(a) It is an unfair trade practice to withhold from or insert in invoices 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, with the capacity and tendency or effect of thereby misleading or deceiving purchasers, prospective purchasers, or the buying public in any material respect.

(b) In order to prevent misunderstanding, confusion, or deception, the invoice or billing should disclose that the products of the industry covered thereby are seconds, defective, or other than first-quality merchandise, when such is the fact. [Rule 12]

§ 192.13 Consignment distribution.

(a) It is an unfair trade practice for any member of the industry to employ the practice of shipping industry products on consignment without the express request or prior consent of the purchasers.

(b) Nothing in this section shall be construed as authorizing any understanding or agreement, combination or conspiracy, or planned common course of action, by and between industry members, mutually to conform or restrict their practice of shipping goods on consignment. [Rule 13]

§ 192.14 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 principals, as an inducement to influence their employers or principals to purchase or contract to purchase products sold or offered for sale by such industry member, 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. [Rule 14]

§ 192.15 False disparagement of competitors or their products.

It is an unfair trade practice for any industry member to represent or imply that a competitor is incompetent or not qualified to make, process, or fit industry products, or certain kinds or types of industry products, or that a competi