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, understanding, 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.

§ 195.19 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

(d) When, because of the terms and conditions of the understanding or 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 their 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 not 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.

(d) Nothing in this section shall be construed to prevent an industry member, acting in good faith, from filing suit in the capacity of taxpayer, or otherwise, under his own name.

§ 196.9 False invoicing.

It is an unfair trade practice to withhold from or insert in invoices any statement or information, including but not limited to the total number of parking meters, parts, and extras actually supplied, 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 of industry products, or others.

§ 196.10 Fictitious prices.

The offering of industry products for sale at prices purported to be reduced from what are in fact fictitious prices, or the offering of such products for sale at a purported reduction in price when such purported reduction is in fact fictitious, with the capacity and tendency or effect of misleading or deceiving purchasers, is an unfair trade practice.

§ 196.11

Guarantees, warranties, etc.

(a) Guarantees which afford purchasers or users substantial and adequate protection, and are fully and fairly stated or disclosed and scrupulously adhered to by the guarantor, are desirable and recommended. It is an unfair trade practice to use or cause to be used any guarantee which is false, misleading, deceptive, or unfair to the purchasing or consuming public.

(b) Under this section guarantees of the following type or character shall not be used:

(1) Guarantees containing statements, representations, or assertions which have the capacity and tendency or effect of misleading and deceiving in any respect; or

(2) Guarantees which are so used or are of such form, text, or character as to import, imply, or represent that the guarantee is broader than is in fact true, or that the guarantee covers an entire parking meter or particular parts thereof which are not in fact covered, or will afford more protection to purchasers or users than is in fact true; or

(3) Guarantees in which any condition, qualification, or contingency applied by the guarantor thereto is not

fully and nondeceptively stated therein, or is stated in such manner or form as to be deceptively minimized, obscured, or concealed, wholly or in part; or

(4) Guarantees which are stated, phrased, or set forth in such manner that although the statements contained therein are literally and technically true. the whole is misleading in that purchasers or users are not made sufficiently aware of certain contingencies or conditions applicable to such guarantee which materially lessen the value or protection thereof as a guarantee to purchasers or users; or

(5) Guarantees which purportedly extend for such an indefinite or unlimited period of time or for such a long period of years as to have the capacity and tendency or effect of thereby misleading or deceiving purchasers or users into the belief that the product has, or is definitely known to have, greater degree of serviceability or durability in actual use than is in fact true; or

(6) Guarantees which have the capacity and tendency or effect of otherwise misrepresenting the performance, serviceability, durability, or lasting qualities of the product, such as, for example, a guarantee extending for a certain number of years or other long period of time when the ability of the product to last, endure, or remain serviceable for such period of time has not been established by actual experience or by competent and adequate tests definitely showing in either case that the product has such lasting qualities under the conditions encountered or to be encountered in the respective locality where the product is sold and used under the guarantee; or

(7) Purported guarantees in the form of documents, promises, representations or other form which are represented or held out to be guarantees when such is not the fact, or when they are service contracts of the type which are not guarantees, or when they involve any deceptive or misleading use of the word "guarantee" or term of similar import; or (8) Guarantees issued, or directly or indirectly caused to be used, by any member of the industry when or under which the guarantor fails or refuses to scrupulously observe his obligations thereunder or fails or refuses to make good on claims coming reasonably within the terms of the guarantee; or

(9) Guarantees which in themselves or in the manner of their use are otherwise false, misleading, or deceptive.

(c) This section shall be applicable not only to guarantees, but also to warranties, to purported warranties and guarantees, and to any promise or representation in the nature of or purporting to be a guarantee or warranty.

§ 196.12

2

Prohibited discrimination.1

(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) (i), (ii), and (iii) 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.

(i) Nothing, however, 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 the products are sold or delivered to said purchasers.

1 The provisions of this section in relation to the Robinson-Patman Act apply thereunder only insofar as that act is applicable to the operations of this industry.

2 As used throughout 196.12, 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."

(ii) 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.

(iii) 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 goods concerned, such as but not limited to distress sales under court process, or sales in good faith in discontinuance of business in the goods 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 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 processing, handling, sale, or offering for sale. of such industry member's products.

(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