pacity and tendency or effect of substantially injuring or lessening present or potential competition is an unfair trade practice: Provided, That nothing in this section shall be construed as prohibiting employees from seeking more favorable employment, or as prohibiting employers from hiring or offering employment to employees of competitors in good faith and not for the purpose of injuring, destroying, or preventing competition. § 223.24 Prohibited forms of trade restraints (unlawful price fixing, etc.).1

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

1 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.

'As used in this section, the word "commerce" means "trade or commerce among the several States and with foreign nations,

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 the 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;

NOTE: This proviso shall not be construed as permitting an industry member to allow a price differential to a customer, whether in the form of a quantity price discount, rebate, or other form, through billing as a single order an aggregate of the amount of two or more orders of such customer on which the industry member makes separate deliveries, when the price differential allowed is not based on a net savings in cost of manufacture, sale, or delivery of the products to said customer resulting from the different method and quantity in which the products are sold and delivered to said customer, or is more than due allowance for such net savings; nor is this proviso to be construed as permitting an industry member

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."

to allow a price differential to a customer, whether in the form of a quantity price discount, rebate, or other form, when, pursuant to agreement or understanding by the industry member and the customer, delivery of the products purchased is to be delayed or made in installments so as to involve storage cost to the industry member, and when as a result of such cost or otherwise, the price differential allowed is not based on a net savings in cost of manufacture, sale, or delivery of the products to said customer resulting from the different method and quantity in which the products are sold and delivered to said customer, or is more than due allowance for such net savings.

(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 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 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.

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 person charged; and unless justification shall be affirmatively shown, the Commission is authorized to issue an order terminating the discrimination: Provided, however, That nothing contained in this section 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.

§ 223.26 Aiding or abetting use of unfair trade practices.

It is an unfair trade practice for any person to aid, abet, coerce, or induce another, directly or indirectly, to use or promote the use of any unfair trade practice specified in this part.

GROUP II

§ 223.101 Disapproval of solicitation when benefits unlikely.

The industry condemns the practice of soliciting or promoting the sale of any of its products to persons who, by reason of their physical state, age, or infirmity, cannot be expected to obtain reasonable use and benefit from such products. This section shall not be regarded as condemning the sale of an industry product to any person furnishing a prescription from a doctor.

§ 223.102

Cooperation with doctors.

(a) The industry fully realizes that the interest of the orthopedically handicapped is best promoted by the cooperation of the doctor and industry member concerning the type and fitting of industry products.

(b) The industry pledges its members to give every assistance to doctors and to do everything possible to promote mutual trust and confidence between the industry and members of the medical profession and the general public.

(c) It is recommended that an industry product not be sold, or any particular type recommended, without the benefit of a prescription or consultation with the doctor except when the patient wishes a duplicate appliance of one which has been prescribed by a doctor.

(d) Any major change in adjustment, shape, or construction should be made only on the prescription of the doctor. § 223.103 Importance of personal fitting.

(a) The industry disapproves the practice of undertaking to supply an orthopedic appliance by mail-order specification and without personal fitting thereof.

(b) The exception to this section is when the appliance is ordered by a doctor who assumes full responsibility for the accuracy of fit; or when duplicating an appliance originally prescribed by a doctor.

§ 223.104 Sharing of improved techniques.

Believing that the interest of the orthopedically handicapped is its first concern, the industry favors making available to all of its members and the general public any improved technique that may be used or developed by any of its members in respect to the making, fitting, aligning, or servicing of industry

fire apparatuses are not considered products of the industry.

GROUP I

§ 224.1 Misrepresentation and deception in the sale of industry products.

It is an unfair trade practice for any industry member to make or publish, directly or indirectly, any false, misleading, or deceptive statement or representation concerning the size, grade, quality, quantity, substance, origin, capacity, performance, durability, safety, or preparation of any fire extinguishing appliance, or any other statement or representation concerning fire extinguishing appliances, which is false or misleading in any material respect or which has the capacity and tendency or effect of misleading purchasers or prospective purchasers. Among the practices inhibited by this section are:

(a) Representing or implying that an industry product will extinguish all types of fires when such is not the fact.

(b) Representing or implying that any industry product incorporates exceptional or exclusive or unique features when such is not the fact.

(c) Representing or implying that the industry member's fire extinguishing apparatus is the only equipment used or approved by the United States Army, Navy, or Air Force, or any other organization, either civilian or military, when such is not the fact.

(d) Representing or implying that an industry product may be used with absolute safety when such is not the fact. § 224.2 Disclosure of limitations and warning of hazards.

(a) When the effectiveness of an industry product is limited to the extinguishing of only small or incipient fires and/or fires involving only combustion of a certain kind or type of substance or substances (such as small or incipient fires involving combustion of other than oil or inflammable liquids), or when the effectiveness of the product is dependent upon periodic replacement of fluids or other substances contained therein, or when the maintenance, handling, or use of the product involves, or may normally involve, a hazard of personal injury to the person maintaining or using such product, it is an unfair trade practice for any member of the industry to sell, offer for sale, lease, or rent such industry product unless adequate disclosure of such limitations and adequate warning

of such hazards has been permanently stamped on an exposed surface of the product, or appears as a permanent stamping on a durable tag securely affixed to the product: Provided, That such disclosure and/or warning shall be of such size print and of such conspicuousness as to be read easily by maintainers and users, and prospective maintainers and users, of the product: And provided further, That when not permanently stamped on the product itself but on a tag attached thereto, the disclosure or warning on the tag shall be accompanied by conspicuous instructions to not remove such tag from the product.

(b) Such disclosures and/or warning, in addition to being on or attached to the product in accordance with the above requirement, shall appear conspicuously in all advertising and sales presentations relating to the product.

§ 224.3 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 thereof.

or size

NOTE: The disclosure required by paragraph (a) of this section shall appear in 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.

§ 224.4

False and misleading price quotations, etc.

The publishing or circulating to purchasers or prospective purchasers 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.

[24 F.R. 4327, May 29, 1959]

§ 224.5 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, is an unfair trade practice.

§ 224.6 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 material respect, is an unfair trade practice.

§ 224.7 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.

§ 224.8 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 capacity and tendency or effect of misleading or deceiving the purchasing or consuming public, is an unfair trade practice.

§ 224.9 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. § 224.10 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 in such manner as to injure said competitor in his business or to suppress competition or unreasonably restrain trade. § 224.11 Enticing away employees of competitors.

It is an unfair trade practice for any member of the industry wilfully to entice away employees or sales representatives 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 from seeking more favorable employment, or as prohibiting employers from hiring or offering employment to employees of competitors in good faith and not for the purpose of injuring, destroying, or preventing competition. § 224.12 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.

§ 224.13 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 repre