§ 216.7 Prohibited forms of trade restraints (unlawful price-fixing, etc.).' It is an unfair trade practice for any member of the industry, either directly or indirectly, to engage in any planned common course of action, or to enter into or take part in any understanding, agreement, combination, or conspiracy, with one or more members of the industry, or with any other person or persons, to fix or maintain the price of any goods or otherwise unlawfully to restrain trade; or to use any form of threat, intimidation, or coercion to induce any member of the industry or other person or persons to engage in any such planned common course of action, or to become a party to any such understanding, agreement, combination, or conspiracy. § 216.8 Prohibited discrimination.' (a) Prohibited discriminatory prices, or rebates, refunds, discounts, credits, The inhibitions of this section are subject to Public Law 542, approved July 14, 1952, 66 Stat. 632 (the McGuire Act) which provides that with respect to a commodity which bears, or the label or container of which bears, the trade-mark, brand, or name of the producer or distributor of such commodity and which is in free and open competition with commodities of the same general class produced or distributed by others, a seller of such a commodity may enter into a contract or agreement with a buyer thereof which establishes a minimum or stipulated price at which such commodity may be resold by such buyer when such contract or agreement is lawful as applied to intrastate transactions under the laws of the State, Territory, or territorial jurisdiction in which the resale is to be made or to which the commodity is to be transported for such resale, and when such contract or agreement is not between manufacturers, or between wholesalers, or between brokers, or between factors, or between retailers, or between persons, firms, or corporations in competition with each other. The term "commerce," as used in this section, is to be construed as it is defined in section 1 of the Clayton Act, which definition is as follows: "Commerce" means trade or com merce 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, 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, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce, where such commodities are sold for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, and where the effect of such discrimination 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, That nothing contained in this paragraph prevent: shall (1) 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; or (2) Price changes from time to tine where 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 deterioration 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; or (3) 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. (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 be half, 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, in the course of such 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 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, in the course of such commerce, to discriminate in favor of one purchaser against another pur chaser 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 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 § 216.101 Disclosure of terms and conditions of sale. by individual members of the industry of The industry disapproves the practice issuing orders or invoices which do not accurately and completely set forth the conditions of sale, including the quantity and price of goods sold, the discount, and all other pertinent terms. The use of such terms as "as had" in the invoice is not considered to be in accord with the provisions of this section. § 216.102 Arbitration. The industry approves the practice of handling business disputes between members of the industry, or between members of the industry and their customers or suppliers, in a fair and reasonable manner, coupled with a spirit of moderation and good will, and every effort should be made by the disputants themselves to compose their differences. If unable to do so they should, if possible, submit these disputes to impartial arbitration. § 216.103 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 to the detriment of both the industry and the public, and is condemned by the industry. If merchandise is returnable for just cause, such return should be made promptly. COMMITTEE ON TRADE PRACTICES § 216.201 Industry committee. The provisions of § 16.1 of this subchapter shall be applicable to an industry committee established under this part. [21 F. R. 1174, Feb. 21, 1956] GROUP I § 217.1 Misrepresentation in general. The practice of selling, advertising, describing, or otherwise representing industry products in a manner which is false or which has the capacity and tendency or effect of misleading or deceiving the purchasing or consuming public in respect to the grade, quality, or quantity of the product, its price, value, efficacy, moth-killing or moth-repelling properties, composition, nature, use, preparation, manufacture, or distribution, or in any other material respect, is an unfair trade practice. (a) In the sale, offering for sale. or distribution of an industry product. it is an unfair trade practice to designate any such product as a "cedar chest", "cedar wardrobe", etc., unless 70 percent or more of the body proper of the product is composed of panels made from red cedar (Juniperus Virginiana) of a uniform thickness of not less than threefourths of an inch and the product is aroma tight: Provided, however, That if the exterior of such product is of wood other than cedar, a disclosure of such fact shall be made conspicuously and in close conjunction with the designation. (b) In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice to designate any such products as "cedar lined", "cedar veneered", etc., unless such products are so lined or veneered, as the case may be, and the designation is closely accompanied by (1) an affirmative and conspicuous disclaimer as to affording protection from moth larvae damage and (2) a conspicuous disclosure as to the presence of woods other than cedar in the industry product. NOTE: Nothing in this section is to be regarded as warranting representations by industry members that industry products which fulfill the requirements set forth in paragraph (a) of this section conform to "recommendations" of the Federal Trade Commission. § 217.3 Claims and representations of affording protection from moth larvae damage. (a) In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice to make or publish any false, misleading, or deceptive statement or representation, by way of advertisement, label, brand, or otherwise, concerning the moth-killing or moth-repelling qualities of such products or as to any protection against moth larvae damage afforded by such products to articles stored therein, or to make or publish any claim or representation with respect to the toxicity of said products to insects which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers. (b) Under the rules in this part, when industry products do not afford complete, absolute, and lasting protection against moth larvae damage with respect to products stored therein which are made, wholly or in part, of animal fiber (wool, fur, hair, or feathers), or when affording such protection only when the products stored therein have been completely ridded of all stages of moth development and life (by cleaning, airing, brushing, combing, beating, or otherwise), they shall not be represented as "mothproof", as "guaranteed mothproof", or as "affording protection from moth damage", or have applied thereto any other term or phrase denoting or implying complete, absolute, and/or unconditional protection against moth damage to clothing and property stored therein: Provided, however, That when the composition and construction of any industry product is such as to fulfill the composition and construction requirements specified in § 217.2 (a), it may be unqualifiedly described and represented as being "moth resistant" or "moth repellent": And provided further, That when any such product fulfills the composition and construction requirements specified in § 217.2 (a), it may also be represented as "affording protection against moth damage" when in close conjunction and with reasonably adequate conspicuousness with such representation there is an adequate and nondeceptive disclosure of the fact that clothing and other articles which are stored in the industry product must first be ridded of any and all forms of moth life. (c) Nothing in this section, in § 217.4, or in any of the other sections, is to be construed as inhibiting manufacturers of industry products who do not sell directly to consumer-buyers from representing in advertisements of their prod ucts that they will make available to each consumer-buyer of such products a written guarantee against moth damage, when: (1) Such a guarantee is in fact made available to each consumer-purchaser within a reasonable time after consummation of purchase; and (2) The guarantee does not contain any unusual conditions or limitations, and the terms and conditions thereof are clearly and nondeceptively stated therein; and (3) The obligations of the guarantor with respect to the guarantee are scrupulously fulfilled by the guarantor; and (4) Written instructions as to conditioning of clothing and other property for storage in the product (cleaning, airing, brushing, combing, beating, etc.) are attached to each industry product in such a manner as reasonably to assure of remaining thereon until consummation of consumer sale and are so placed on the product and are of such conspicuousness as likely to be noticed by prospective purchasers of the product; and (5) Mention is made in the advertisement and in close conjunction with the said representation that instructions as to cleaning or other conditioning of clothing and other property for storage in industry products are attached to such products; and (6) The construction and composition of the products advertised are such as to fulfill the construction and composition requirements specified in § 217.2 (a). (d) Nothing in this section, in § 217.4, or any of the other sections, is to be construed as inhibiting manufacturers of industry products who do not sell directly to consumer-buyers from advertising that such products will afford protection from moth damage when there is compliance with requirements of subparagraphs (4), (5) and (6) of paragraph (c) of this section. § 217.4 Guarantees, warranties, etc. (a) In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice: (1) To make or offer any guarantee respecting an industry product unless the nature and extent of the undertaking, and any and all material conditions and limitations applicable thereto, are clearly and conspicuously stated in immediate conjunction, and unless the obligations of the guarantor with respect to the guarantee are scrupulously fulfilled; or (2) To make or offer any guarantee to the effect that an industry product will afford protection from moth damage with respect to clothing and other products stored therein when such protection is dependent on the stored products being free of all moth life before storage and when the guarantee is not immediately accompanied by an adequate and nondeceptive disclosure of such fact. (b) Nothing in the rules in this part is to be construed as inhibiting an industry member from representing that an industry product is guaranteed to afford protection from moth damage when the product fulfills the construction and composition requirements specified in § 217.2 (a) and when the nature and extent of the guarantee, and any and all material conditions and limitations applicable thereto, are clearly and conspicuously stated in conjunction. (c) Nothing in this section is to be construed as limiting or otherwise affecting the provisions of § 217.3 (c). (d) The inhibitions of this section shall also be applicable to warranties. § 217.5 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, 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. § 217.6 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 producer or manufacturer of industry products when such is not the fact, or in any other manner to misrepresent the character, extent, or type of his business. § 217.7 Misrepresenting products as conforming to standard. Representing, through advertisement 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 ca pacity and tendency or effect of misleading or deceiving the purchasing or consuming public, is an unfair trade practice. § 217.8 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 the purchasing or consuming public, is an unfair trade practice. § 217.9 Substitution of products. The practice of shipping or delivering products which do not conform to samples submitted, to specifications upon which the sale is consummated, or to representations made prior to securing the order, without the consent of the purchasers to such substitutions and with the capacity and tendency or effect of misleading or deceiving the purchasing or consuming public, is an unfair trade practice. § 217.10 Procurement of competitors' confidential information. It is an unfair trade practice for any member of the industry to obtain information concerning the business of a competitor by bribery of an 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 so as substantially to injure competition or unreasonably restrain trade. § 217.11 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 competitors' products in any respect, or of their business methods, selling prices, values, credit terms, policies, or services, is an unfair trade practice. § 217.12 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' custom |