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 provisions of this section.

(f) Purchases by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit. The foregoing provisions of this section relate to practices within the purview of the RobinsonPatman Antidiscrimination Act, which act and the application thereunder of this section are subject to the limitations expressed in the amendment to such Robinson-Patman Antidiscrimination Act, which amendment, passed by Congress, was approved May 26, 1938, and reads as follows:

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That nothing in the Act approved June 19, 1936 (Public, Numbered 692, Seventy-fourth Congress second session), known as the RobinsonPatman Antidiscrimination Act, shall 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.

(Sec. 2, 38 Stat. 730, as amended, secs. 2, 3, 4, 49 Stat. 1527, 1528, ch. 283, 52 Stat. 446; 15 U. S. C. 13, 13a, 13b, 13c, 21a)

COMMITTEE ON TRADE PRACTICES § 162.201 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]

PART 163-BUTTON JOBBING INDUSTRY

Sec.

163.1

163.2

163.3

163.4

163.5

163.6

163.7

163.8

163.9

163.10

163.11 163.12

163.101 163.102

163.103

Repudiation of contracts.

AUTHORITY: The provisions of this Part 163 issued under secs. 6(g), 5, 38 Stat. 722, 719; 15 U.S.C. 46(g), 45, unless otherwise noted.

SOURCE: The provisions of this Part 163 appear at 10 F.R. 7966, June 30, 1945, unless otherwise noted.

GROUP I

§ 163.1 Misrepresentation and deception.

(a) It is an unfair trade practice to use, or cause or promote the use of, any trade promotional literature, advertising matter, mark, brand, label, designation, or representation, however disseminated or published, which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers with respect to the price, grade, quality, quantity, substance, character, nature, size, use, design, preparation, manufacture, or distribution of any product of the industry, or in any other material respect.

(b) It is an unfair trade practice (1) to cause any buttons or other products of the industry of foreign origin to be represented, directly or indirectly, as being

domestic products or as not having been imported from or manufactured in a foreign country; or (2) to conceal the fact that such products are of foreign origin either by failing to clearly mark the country of origin on the display cards or containers, or by other deceptive concealment.

NOTE. Nothing in this section shall be construed as relieving anyone of such further marking as may be required by applicable laws or regulations thereunder.

§ 163.2 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 the products of competitors in any respect, or of their business methods, selling prices, values, credit terms, policies, or services, is an unfair trade practice.

§ 163.3 Enticing away employees of competitors.

Willfully enticing away the employees of competitors, with the purpose and effect of thereby hampering or injuring competitors in their business and destroying or substantially lessening competition, is an unfair trade practice.

or

NOTE: Nothing in this section shall be construed as prohibiting employees agents from seeking more favorable employment.

§ 163.4 Inducing breach of contract.

Inducing or attempting to induce the breach of existing lawful contracts between competitors and their customers or their suppliers by any false or deceptive means whatsoever, or interfering with or obstructing 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, is an unfair trade practice. § 163.5

Selling below cost.

The practice of selling industry products below the seller's cost, when pursued with wrongful intent of thereby injuring a competitor and where the effect of such practice is to unreasonably restrain trade, tend to create a monopoly, or substantially lessen competition, is an unfair trade practice.

This section is not to be construed as prohibiting all sales below cost, but only

such selling below the seller's cost as is resorted to and pursued as a monopolistic practice with the wrongful intent referred to and coupled with the effect of unreasonably restraining trade, tending to create a monopoly, or substantially lessening competition.

All elements recognized by good accounting practice as proper elements of such cost shall be included in determining cost under this section. The costs referred to in the section are actual costs of the respective seller and not some other figure or average costs in the industry, determined by an industry cost survey or otherwise.

§ 163.6 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 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.

(a) In selling or marketing. 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 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 products of competitors or from dealing or contracting to deal with competitors.

(b) In purchasing supplies. It is an unfair trade practice for any member of the industry, directly or indirectly, to bribe an employee or agent of a supplier to induce such supplier to discriminate in favor of such member of the industry over other purchasers from such supplier, with the effect of thereby hampering a competitor of such member in his

business and destroying or substantially lessening competition. (See also § 163.10 (e), relative to procurement of illegal discrimination in price.)

§ 163.8 False invoicing.

Withholding from or inserting in an invoice any statements or information by reason of which omission or insertion a false record is made, wholly or in part, of the transaction represented on the face of such invoice, with the effect of thereby misleading or deceiving purchasers or prospective purchasers, is an unfair trade practice.

§ 163.9 Consignment shipping.

It is an unfair trade practice for any member of the industry to use the practice of shipping goods on consignment or pretended consignment for the purpose and with the effect of artificially clogging trade outlets and unduly restricting competitors' use of said trade outlets in getting their goods to consumers through regular channels of distribution, or with such purpose to entirely close said trade outlets to such competitors so as to substantially lessen competition or tend to create a monopoly or to unreasonably restrain trade: Provided, however, That nothing in this section shall be construed or used as restricting or preventing consignment shipping or marketing of commodities in good faith and without artificial interference with competitors' use of the usual channels of distribution in such manner as thereby to suppress competition or restrain trade.

(a) Prohibited discriminatory prices, or 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 (whether in the guise of samples or otherwise), 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;

(2) That nothing contained in this section 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 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 section shall prevent price changes from time to time where made, in response to changing conditions affecting either (i) the market for the goods concerned, or (ii) the marketability of the goods, 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.

(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 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 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 provisions of this section.

(f) Purchases by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit. The foregoing provisions of this section relate to practices within the purview of the RobinsonPatman Antidiscrimination Act, which act and the application thereunder of this section are subject to the limitations expressed in the amendment to such Robinson-Patman Antidiscrimination Act, which amendment was approved May 26, 1938, and reads as follows:

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That nothing in the Act approved June 19, 1936 (Public, Numbered 692, Seventy-fourth Congress, second session), known as the RobinsonPatman Antidiscrimination Act, shall 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.

(Sec. 2, 38 Stat. 730, as amended, secs. 2, 3, 4, 49 Stat. 1527, 1528, ch. 283, 52 Stat. 446; 15 U. S. C. 13, 13a, 13b, 13c, 21a)

§ 163.11 Imitation of trade-marks, etc. The practice of imitating or causing to be imitated, or directly or in

directly promoting or aiding the imitation of, the trade-marks, trade names, or other exclusively owned symbols or marks of identification of competitors, or the exclusively owned patterns or designs of competitors which have been patented and have not been directly or by operation of law dedicated to the public, with the capacity and tendency or effect of thereby misleading or deceiving purchasers, prospective purchasers, or the consuming public, is an unfair trade practice.

§ 163.12

Combination or coercion to fix prices, suppress competition, or restrain trade.

It is an unfair trade practice for a member of the industry, or any other person:

(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 other persons, to unlawfully fix, maintain, or enhance prices, suppress competition, or restrain trade.

GROUP II

§ 163.101 Giving of samples.

The industry disapproves the giving of samples without charge except only as may be necessary to acquaint purchasers or prospective purchasers with the grade or quality of the product offered for sale, and where the giving of such samples by any member of the industry is not practiced or accomplished in such way or to such extent as to effectuate an illegal discrimination in price contrary to the provisions of § 163.10.

§ 163.102 Arbitration.

The industry approves the practice of handling business disputes between members of the industry and their customers in a fair and reasonable manner, coupled with a spirit of moderation and good will, and every effort should be made by disputants themselves to compose their differences. If unable to do so they should, if possible, submit these disputes to arbitration.

the purchasing or consuming public with respect to the grade, quality, quantity, origin, efficacy, price, ingredients, safety, preparation, manufacture, or distribution of any industry product; or

(b) Which is false, misleading, or deceptive in any other material respect. § 164.2 Deception in respect to “heels.”

It is an unfair trade practice to represent to purchasers or prospective purchasers that refunds will be credited or paid for "heels" when such refunds are not actually made, or when such "heels" do not actually exist, or when such representation is otherwise false, misleading, or deceptive. (For inhibited discriminations in respect of "heels," see § 164.14.) (The term "heels" as used in this part refers to the small residual portion of refrigerant remaining in the cylinder or container and returned therein by the purchaser to the manufacturer, such residual portion however, not being regarded as "heels” if it exceeds 10 percent of the full capacity of the respective container.)

§ 164.3 Deception in respect to refrigerant containers.

It is an unfair trade practice to cause any refrigerant shipped or delivered in a cylinder or container not complying fully with appropriate regulations of the Interstate Commerce Commission to be represented or passed off, directly or indirectly, as and for a refrigerant shipped or delivered in cylinders or containers which do comply with such regulations.

NOTE: Nothing in this section shall be construed as relieving any member of the industry or other party of the necessity of complying with all of the rules and regulations of the Interstate Commerce Commission relative to the shipment or delivery in commerce in cylinders or containers of the various compressed refrigerants used, including requirements as to packing, testing, re-testing, marking, qualification, and maintenance of cylinders, etc.; and no misrepresentation or deception, direct or indirect, shall be practiced in the sale or distribution of industry products respecting any such matters.

§ 164.4 Deceptive use of refrigerant containers.

The use by any member of the industry of the refrigerant cylinder or container of a competitor with the capacity and tendency or effect of thereby misleading or deceiving purchasers or prospective purchasers, or the unauthorized use of a