by tag or label attached to the products and in all advertising and trade promotional literature, of the fact that such products are not new but consist, in whole or in part, of second-hand materials or parts, such failure or refusal to disclose having the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers, or the consuming public.

(c) Nothing in this section shall be construed as permitting the sale or distribution of bedding products which contain any unsanitary material.

$195.2

Other deception through misrepresentation or concealment.

(a) It is an unfair trade practice for any industry member to sell, offer for sale, or distribute any mattress or other bedding product, or to promote the sale or distribution thereof, by any method, or under any circumstance or condition, which has the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers, or the consuming public as to the material content, composition, construction, manufacture, design, utility, durability, resilience, sag resistance, or health or therapeutic properties, of any mattress or other bedding product, or which is false, misleading, or deceptive in any other material respect.

(b) The provisions of this section shall apply to advertising representations, labeling, or selling promotions which are misleading or deceptive to the purchasing or consuming public by reason of the concealment or nondisclosure of a material fact, as well as to representations, advertisements, or sales promotional methods which are false, misleading, or deceptive for any other reason.

(c) The inhibitions of this section shall apply specifically to the deceptive concealment or nondisclosure of the kind or kinds of materials used in the filling and cover of mattresses or other bedding products.

(d) Nothing in this section shall be construed as relieving any member of the industry of the necessity of complying with other applicable provisions of laws or regulations relating to mattresses or other bedding products, including fiber content disclosure identification.

or

195.3 Misuse of the terms "felt," "felting," and "felted."

It is an unfair trade practice to use the term "felt," "felting," or "felted" as de

scriptive of the filling of a mattress or other bedding product unless such filling is a compact layer of fibers which have been specially processed and interlaced to form a mat of substantially uniform thickness suitable for use as a filling for a mattress or other bedding product: Provided, That when the filling is of other than cotton or wool fibers, the term shall be immediately accompanied by the fiber identification (as, for example, "felted kapok," "sisal felting," etc.). § 195.4 Misuse of the terms "latex," "foam rubber," "latex foam rubber," etc.

(a) It is an unfair trade practice to use the term "latex," "foam rubber," "latex foam rubber," or any term of similar import, as descriptive of a bedding product or of any filling thereof, under any circumstance or condition having the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers, or the consuming public.

(b) Under paragraph (a) of this section, the terms "latex," "foam rubber." "latex foam rubber," or other terms of similar import, shall not be used to describe a bedding product unless the filling material thereof is of latex which has been foamed and molded into one homogeneous pad: Provided, however, That when the filling of any bedding product is in part a homogeneous layer of latex which is of substantial thickness, such terms may be used as descriptive thereof if in conjunction therewith nondeceptive disclosure is made of the fact that only a part of such filling consists of latex: And provided further, That when the filling is composed, in whole or in part, of latex which has been shredded, flaked, or ground, full and nondeceptive disclosure is made of such fact, irrespective of whether the pieces or shreds are in loose form or are held together by glue or other adhesive agent.

§ 195.5 Misuse of terms "Rx," "posture," "posturized," "posturite," "custom built," "orthepedic," "germproof," and "waterproof."

In the sale, offering for sale, or distribution of bedding products, it is an unfair trade practice:

(a) To use the term "Rx," or any term of similar import, as descriptive of any bedding product which has not been specially designed and constructed to meet the requirements of a prescription

by a member of the medical profession for the use of a particular individual;

(b) To use the term "posture," "posturized," or "posturite," or any term of similar import, as descriptive of any bedding product which has not been specially designed and constructed to afford correct posture during sleep, or which, although so designed and constructed for such purpose, is not in fact capable of affording correct posture during sleep, or which is not capable of preventing or correcting, or of contributing materially to the prevention or correction of, posture defects;

(c) To use the term "custom built," or any term of similar import, as descriptive of any bedding product which has not in fact been made in accordance with specifications furnished prior to manufacture by the individual purchaser and user of such product;

(d) To use the term "orthopedic," or any term of similar import, as descriptive of any bedding product unless such product has been specially designed and constructed so as to prevent, correct, or afford substantial relief with respect to a specific body deformity or deformities and accords with recommendations of orthopedic authorities respecting design and construction for such deformity or deformities: Provided, That the term shall in all cases be accompanied by specification of the kind or kinds of body deformities for which the product has been so designed and constructed;

(e) To use the term "germ proof," or any term of similar import, as descriptive of any bedding product, unless such product is, and will remain throughout its expected life, entirely free of germs: Provided, That nothing in this section shall be construed as prohibiting a representation that a bedding product is sterile if the product at the time of consumer purchase is completely free of living germs and is packaged in such manner as to assure maintenance of its sterile condition until after delivery of the product to the ultimate consumer-purchaser: And provided further, That the representation is not supplemented or made in any manner which implies that the sterile condition will continue after removal of the product from its packaging and regardless of its use and exposure;

(f) To use the term "waterproof," or any term of similar import, as descriptive of any bedding product the outer covering of which is not such as to be

impervious to the entry of water or moisture throughout the life of such bedding product; or

(g) To cause any bedding product to be represented, directly or by implication, as being a product which is used in any hospital or clinic or is recommended by members of the medical profession or by a medical organization when such is not the fact, or as having been designed or made so as to afford special health, orthopedic, or therapeutic values, when such is not the fact. § 195.6 Deceptive pricing.

(a) It is an unfair trade practice for any member of the industry to represent, in advertising or otherwise, that the price of any industry product has been reduced from what is in fact a fictitious price, or that such price is a reduced or a special price when it is in fact the regular selling price of such product, or that the regular price thereof is higher when such is not the fact, or otherwise to falsely or deceptively represent the past or current price of an industry product.

(b) It is an unfair trade practice for any member of the industry, directly or indirectly, to use or to supply to dealers, or to aid or assist in the use of, price tags, labels, or similar devices which are false or fictitious, or which such member has reason to believe are intended to be used or will be used by dealers or salesmen for the purpose of misleading or deceiving the purchasing or consuming public in regard to price, or in any other material respect.

(c) It is an unfair trade practice for any member of the industry to falsely represent that the price of any bedding product is a "wholesale price" or a "factory price."

§ 195.7 Guarantees, warranties, etc.

(a) It is an unfair trade practice to use, or cause to be used, any guarantee or warranty which is false, misleading, deceptive, or unfair to the purchasing or consuming public, whether in respect to the quality, construction, serviceability, wearing quality, method of manufacture, or in any other respect.

(b) The inhibitions in paragraph (a) of this section are to be considered as applicable with respect to any guarantee or warranty in which the terms and conditions relating to the obligation of the guarantor or warrantor are deceptively minimized or stated, or in which the obligations of the guarantor or warran

tor are impractical of fulfillment; and as also applicable to the use of any guarantee or warranty in respect of which the guarantor or warrantor fails or refuses to scrupulously observe his obligations thereunder.

(c) It is also an unfair trade practice to represent any bedding product as being "guaranteed" unless the nature and extent of the undertaking, and the identity of the guarantor are conjunctively disclosed.

§ 195.8 Deception through failure to differentiate between wholesale and retail transactions.

Where bedding products are sold at wholesale and at retail in the same establishment of a member of the industry, the commingling of the two types of business in such a manner as to have the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers is an unfair trade practice.

Withholding from or inserting in invoices or sales tickets 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 tickets, with the effect of thereby misleading or deceiving purchasers or prospective purchasers, is an unfair trade practice.

§ 195.11 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' customers or prospective customers, without the knowledge of their employers or prin

cipals, as an inducement to influence their employers or principals to purchase or contract to purchase bedding 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. § 195.12 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.

§ 195.13

Use of lottery schemes.

The offering or giving of prizes, premiums, or gifts in connection with the sale of industry products, or as an inducement thereto, by any scheme which involves lottery or game of chance, is an unfair trade practice.

§ 195.14 Misrepresentation as to character of business.

It is an unfair trade practice for any member of the industry, in the course of or in connection with the distribution or sale of bedding products, to misrepresent the character, extent, or type of his business.

§ 195.15

Prohibited discrimination.1

(a) Prohibited discriminatory prices, 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, 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

1 As used in this section, the word "commerce" means trade or commerce among the several States and Territories, including the District of Columbia, in accordance with the full scope of the definition of such term found in section 1 of the Clayton Act (38 Stat. 739; 15 USCA, sec. 12).

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 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 made 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 provisions of paragraphs (a) to (e) 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 Hibraries, 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.)

§ 195.16 Discriminatory returns.

It is an unfair trade practice for any member of the industry engaged in com

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.

§ 195.18 Imitation or simulation 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, prospective purchasers, or the consuming public, is an unfair trade practice.

1 See footnote to § 195.15.

§ 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 SS 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]