chases 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 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, 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 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 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.

(g) Purchases by U. S. Government; applicability of Robinson-Patman Antidiscrimination Act to same. In an opinion submitted to the Secretary of War under date of December 28, 1936, the U. S. Attorney General advised that the Robinson-Patman Antidiscrimination Act "is not applicable to Government contracts for supplies." (38 Opinions Attorney General 539.)

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 per

son 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 section 2 (b), Clayton Act. § 222.11 Prohibited forms of trade restraints (unlawful price fixing, etc.).3 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.

§ 222.12 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 the

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.

§ 223.1

Deception (general).

(a) It is an unfair trade practice to sell, offer for sale, or distribute any industry product, or promote the sale or distribution thereof, by any method or under any circumstance or condition which has the capacity and tendency or effect of deceiving purchasers or prospective purchasers as to the construction, composition, design, model, origin, manufacture, value, quality, weight, absence of noise in operation, strength, durability, life expectancy, appearance, fit, comfort, alignment, utility, ease of operation, or safety to wearer, of such product, or in any other material respect; or to mislead purchasers or prospective purchasers with respect to the need for repair, maintenance, or replacement of parts of such product after its purchase and use, or with respect to any service offered concerning maintenance of product or training of purchaser in the use thereof.

(b) The inhibitions of this section shall apply to every species of advertisement or form of representation, whether in newspaper, periodical, telephone directory, sales catalog, sales promotional literature, by radio or television, or otherwise.

§ 223.2 Representation or promise that product will “fit.”

It is an unfair trade practice for any member of the industry to represent, promise or guarantee that any industry product will be made to fit any individual purchaser or prospective purchaser thereof, when such representation, promise, or guarantee is not made in good faith, or the industry member is not possessed of the requisite skill, knowledge, and equipment to assure of his ability to fulfill such representation, promise, or guarantee.

NOTE: It is the consensus of the industry that the term "perfect fit" should not be used by members, as perfection is not attainable.

§ 223.3 Protection of public with respect to apparent agency.

(a) It is an unfair trade practice for any member of the industry to aid or abet any person in effecting a deception of purchasers or prospective purchasers as to his or her authority to represent and make commitments in behalf of such industry member.

(b) For an industry member to supply any person, not his agent, with samples, sales literature, guarantees of such industry member, or any indices of agency, and accept orders secured by such person and then refuse to fulfill the commitments implied to such purchaser by the use of such samples, sales literature, etc., is an unfair trade practice.

§ 223.4 Deceptive testimonials or depictions.

It is an unfair trade practice for a member of the industry to use any testimonial of a user of any orthopedic appliance, or of any other person, or to use any picture or depiction thereof, which is false or which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers.

§ 223.5

Deceptive demonstrations.

In the sale, offering for sale, or distribution of industry products, or in promoting the sale or distribution thereof, it is an unfair trade practice to demonstrate any such products in a manner or under circumstances having the capacity and tendency or effect of creating a false impression as to the actual benefits from the use thereof that reasonably may be expected to be had by a purchaser or prospective purchaser of such or similar industry products.

§ 223.6 Misuse of terms "custommade," "custom-built," etc.

In the sale, offering for sale, or distribution of orthopedic appliances, it is an unfair trade practice for an industry member to use the terms "custom-made," "custom-built," "made-to-order," or any other word or term of similar import, as descriptive of any orthopedic applicance which has not been made in accordance with specifications as to size, fit, quality, etc., supplied by or on behalf of the consumer-purchaser prior to the manu

facture or assembly of the orthopedic appliance, as distinguished from a product which is a ready-made or stock orthopedic appliance.

§ 223.7 Guarantees, warranties, etc.

(a) It is an unfair trade practice to use any guarantee respecting an industry product which does not make reasonable disclosure of the conditions or limitations of such guarantee, or which contains statements, representations or assertions which have the capacity and tendency or effect of misleading or deceiving in any respect, or which are of such form, text, or character as to represent or imply that the guarantee is broader than is in fact true.

(b) It is an unfair trade practice for the guarantor to fail to observe scrupulously his obligation under the guarantee by him used or caused to be used.

(c) This section shall be applicable also to warranties or any writing purported to be a guarantee or warranty. § 223.8 Mispresenting 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 capacity and tendency or effect of misleading or deceiving the purchasing or consuming public, is an unfair trade practice. § 223.9 Deception as to being "new."

In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice to represent any of such products as being new or unused, or as containing all new or unused parts, when such is not the fact, or deceptively to conceal the fact that any of such products have been used or contain a used part or parts.

§ 223.10 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 advising the purchasers as to said substitution and obtaining their consent thereto at or before the time of shipment or delivery, and with the capacity and tendency or effect of misleading or deceiving the purchasing or consuming public, is an unfair trade practice.

It is an unfair trade practice to withhold from or insert 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 tendency or effect of thereby misleading or deceiving the purchasing or consuming public.

§ 223.12 Misrepresentation as to installment sales contracts, their terms, conditions, etc.

It is an unfair trade practice to make or publish, or cause to be made or published, directly or indirectly, any false, misleading, or deceptive statement or representation, through advertising or otherwise, concerning installment sales contracts used or their terms and conditions, including down payments, interest, carrying charges, etc., or respecting any other matters relative to such contracts or their terms and conditions.

§ 223.13 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. § 223.14

Defamation of competitors or false disparagement of their prod

ucts.

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.

§ 223.15 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 an employee or agent of such competitor, by false or misleading statements or representa

The circulation of threats of suit for infringement of patents or trade-marks among customers or prospective customers of competitors, not made in good faith but for the purpose or with the effect of thereby harassing or intimidating such customers or prospective customers, or of unduly hampering, injuring, or prejudicing competitors in their business, is an unfair trade practice.

§ 223.17 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 character, name, nature, 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.

§ 223.18 Use of the word "free."

In connection with the sale, offering for sale, or distribution of industry products, it is an unfair trade practice to use the word "free," or any other word or words of similar import, in advertisements or in other offers to the public, as descriptive of an article of merchandise, or service, which is not an unconditional gift, under the following circumstances:

(a) When all the conditions, obligations, or other prerequisites to the receipt and retention of the "free" article of merchandise or service offered are not clearly and conspicuously set forth at the outset so as to leave no reasonable probability that the terms of the offer will be misunderstood; and, regardless of such disclosure:

(b) When, with respect to any article of merchandise required to be purchased in order to obtain the "free" article or service, the offerer (1) increases the ordinary and usual price of such article of merchandise, or (2) reduces its quality,

or

(3) reduces the quantity or size

close conjunction with the word "free" (or other word or words of similar import) wherever such word first appears in each advertisement or offer. A disclosure in the form of a footnote, to which reference is made by use of an asterisk or other symbol placed next to the word "free," will not be regarded as compliance.

§ 223.19 Coercing purchase of one product as a prerequisite to the purchase of other products.

The practice of coercing the purchase of one or more products as a prequisite to the purchase of one or more other products, where the effect may be substantially to lessen competition or tend to create a monopoly or unreasonably to restrain trade, is an unfair trade practice.

§ 223.20 Fictitious prices.

It is an unfair trade practice to sell or offer for sale industry products at prices purported to be reduced from what are in fact fictitious prices, or to sell or offer for sale such products at a purported reduction in price when such purported reduction is in fact fictitious or is otherwise misleading or deceptive.

§ 223.21 Prohibited allowances or commissions to doctors.

It is an unfair trade practice for any industry member to pay or contract to pay anything of value to any doctor prescribing or recommending the use by any of his patients of an orthopedic appliance in consideration of, or for the purpose of inducing or obtaining, a referral of the patient by the doctor to the industry member for the purchase of any such appliance, or a recommendation by the doctor of the industry member to the patient for the purchase of any such appliance.

§ 223.22 Inducing breach of contract.

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, 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 unduly hampering, injuring, or prejudicing competitors in their business.

§ 223.23 Enticing away employees of competitors.

Knowingly enticing away employees or sales representatives of competitors under any circumstance having the ca