not the fact, or in any other manner misrepresent the character, extent, or type of their business. [Rule 19]

§ 67.20 Deceptive use of trade or corporate names, trademarks, etc.

Members of the industry shall not use any trade name, trademark, or other trade designation, which has the capacity and tendency or effect of misleading or receiving purchasers or prospective purchasers as to the name, nature, or origin of any product of the industry, or of any material used therein, or which is false, deceptive, or misleading in any other material respect. [Rule 20]

§ 67.21

Passing off through imitation or simulation of trademarks, trade names, etc.

Members of the industry shall not mislead or deceive purchasers by passing off the products of one industry member as and for those of another through the imitation or simulation of trademarks, trade names, brands, or labels. [Rule 211

§ 67.22 False invoicing.

No industry members shall withold from or insert 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 capacity and tendency or effect of thereby misleading or deceiving purchasers, prospective purchasers, or the consuming public in any material respect. [Rule 22]

§ 67.23 Substitution of products.

No member of the industry shall make an unauthorized substitution of products, where such substitution has the capacity and tendency or effect of misleading or deceiving purchasers, by:

(a) Shipping or delivering industry 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 purchaser of the substitution and obtaining his consent thereto prior to making shipment or delivery; or

(b) Falsely representing the reason for making substitutions. [Rule 231

a product is "guaranteed" without a clear and conspicuous disclosure in close conjunction with such representation of:

(1) The nature and extent of the guarantee; and

(2) Any material conditions or limitations in the guarantee which are imposed by the guarantor; and

(3) The manner in which the guarantor will perform thereunder; and

(4) The identity of the guarantor.

(b) Representations that a product is "guaranteed for life" or has a "lifetime guarantee," in addition to meeting the above requirements, shall contain a conspicuous disclosure of the meaning of "life" or "lifetime" as used (whether that of the purchaser, the product or otherwise).

(c) Guarantees shall not be used which under normal conditions are impractical of fulfillment or which are for such a period of time or are otherwise of such nature as to have the capacity and tendency of misleading purchasers or prospective purchasers into the belief that the product so guaranteed has a greater degree of serviceability, durability or performance capability in actual use than is true in fact.

(d) This section has application not only to "guarantees" but also to "warranties," to purported "guarantees" and "warranties," and to any promise or representation in the nature of a "guarantee" or "warranty." [Rule 24]

§ 67.25 Use of the word "free."

In connection with the sale, offering for sale, or distribution of industry products, industry members shall not 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,

(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

§ 67.26 Deceptive pricing.

Members of the industry shall not represent directly or indirectly in advertising or otherwise that an industry product may be purchased for a specified price, or at a saving, or at a reduced price, when such is not the fact; or otherwise deceive purchasers or prospective purchasers with respect to the price of any product offered for sale; or furnish any means or instrumentality by which others engaged in the sale of industry products may make any such representation.

NOTE: The Commission promulgated Guides Against Deceptive Pricing effective January 8, 1964, superseding the Guides adopted October 2, 1958. The 1964 Guides are appended to these rules for additional guidance with respect to price savings representations.

[Rule 26]

§ 67.27 Misbranding, misrepresentation, and deceptive selling methods. Members of this industry, in the course of the marketing or distribution of industry products, shall not:

(a) Use, or cause or promote the use of, any trade promotional literature, advertising matter, mark, brand, label, designation, depiction, or other type of oral or written representation, however disseminated or published, which directly or by implication, or through failure to disclose material information, has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers with respect to

(1) the type, grade, quality, quantity, use, size, weight, nature, condition, durability, performance, serviceability, origin, manufacture, distribution, or price of any industry product; or,

(2) the identity of a performing artist as to either part or all of a recording, the recorded content of any recording,

(a) Industry member. Any person, firm, corporation, or organization engaged in the manufacture, sale, or distribution of industry products as hereinafter defined.

(b) Industry products. Braided Rugs, Tubular Braided Rugs and Tubular Wrap-A-Round Rugs, made in the following manner, irrespective of composition:

(1) Braided rugs, formed by sewing together flat braids or plaits into desired shapes;

(2) Tubular braided rugs, formed by braiding yarn around a core to form a sheath, or tube, for the core and thereafter sewing the same into desired shapes;

(3) Tubular wrap-a-round rugs, formed by wrapping yarn or thread around a core of filler material in a spiral fashion without interlocking and thereafter sewing such wrapped cores into desired shapes.

(a) It is an unfair trade practice for members of the industry to offer for sale or sell industry products under any representations, description, circumstance, or condition which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers thereof, as to the type, size, kind, grade, quality, weight, durability, serviceability, terms of sale, value, production, method of manufacture, fabrication or distribution of such industry products or which has the capacity and tendency or effect of misleading or deceiving the purchasing or consuming public in any other material respect.

(b) The prohibitions of this section are applicable to all forms of advertising, whether written or oral, in periodicals, on the radio or television, and to any form of marking or labeling of industry products or the packages in which they may be shipped, offered for sale or sold.

(c) Under this section it is an unfair trade practice to represent any industry product as a "braided rug" unless made in the manner described in § 71.0(b) (1).

(d) Rugs made in conformity with § 71.0(b) (2) may be designated as "tubular braided rugs," and rugs of the construction described in § 71.0(b) (3) may be designated as "tubular wrap-a-round rugs", but not as woven or braided. [Rule 1]

§ 71.2

Misrepresentation as to the origin of industry products.

It is an unfair trade practice to represent, directly or by implication, that a product manufactured in a foreign country was made in the United States. Under this section, distinctively American names may not be used to identify products imported from a foreign country unless in close conjunction with any such name clear and conspicuous disclosure is made of the country of origin of the product.

NOTE: The marking of imported articles to show their country of origin is a responsibility of the Bureau of Customs. Department of the Treasury, under the provisions of statutes administered by it. Action may be taken by the Commission under the Federal Trade Commission Act in the case of deceptive nondisclosure of foreign origin in matters within its jurisdiction, when such action is necessary in the public interest. [Rule 21

§ 71.3 Misrepresentation as to the size of industry products.

It is an unfair trade practice in referring to the size of an industry product to use any size representation which does not accurately reflect the actual size of the product.

NOTE: Nothing in this section shall be construed as preventing an industry member from stating the "approximate size" of a group of rugs offered for sale, provided that no rug in the group varies in size from the stated approximate size by more than 11⁄2 percent in any dimension (length or width). [Rule 3]

§ 71.4 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 sale of industry products, to represent directly or indirectly, that he is a manufacturer of industry products, unless he owns and operates or directly controls a factory wherein such products are made, or to represent that he is a wholesaler of industry products when such is not the fact, or in any other manner to misrepresent the character, extent, or type of his business. [Rule 4]

$71.5 Deceptive pricing.

It is an unfair trade practice for any member of the industry to represent directly or indirectly in advertising or otherwise that an industry product may be purchased for a specified price, or at a saving, or at a reduced price, when such is not the fact; or otherwise deceive purchasers or prospective purchasers with respect to the price of any product offered for sale; or furnish any means or instrumentality by which others engaged in the sale of industry products may make any such representation.

NOTE: On December 20, 1963 the Commission adopted Guides Against Deceptive Pricing which became effective on January 8, 1964 and which supersede the Guides on this subject as adopted October 2, 1958. Copies of the Guides will be furnished upon request. [Rule 5]

§ 71.6 Misrepresenting industry products as "Hand Braided" or "Hand Made."

(a) It is an unfair trade practice to represent an industry product as "hand braided" unless such product is composed of strands which were in fact braided by hand.

§ 72.103

Individual price policy.

The knitted outerwear manufacturers hereby affirm their policy of reserving absolute freedom in individually establishing their own prices on their individual products and in changing the same at will.

§ 72.104 Arbitration.

The industry approves the practices of handling disputes 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 arrive at an agreement. If unable to do so they should agree, if possible, upon arbitration under some one of the prevailing codes. § 72.105

Conformance with approved

practices.

It is the opinion of the industry that knitted outerwear manufacturers should use their best efforts to observe these rules of approved practices.

COMMITTEE ON TRADE PRACTICES § 72.201 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]

Sec.

74.0 74.1

PART 74 FRESH FRUIT AND

VEGETABLE INDUSTRY

The industry and its products defined.
Prohibited price discrimination.

74.2 Prohibited brokerage.

AUTHORITY: The provisions of this Part 74 issued under sec. 2, 49 Stat. 1526; sec. 6, 38 Stat. 721; 15 U.S.C. 13, 46.

SOURCE: The provisions of this Part 74 appear at 30 F.R. 5331, Apr. 15, 1965, unless otherwise noted.

§ 74.0 The industry and its products defined.

(a) Members of the industry are persons, firms, corporations and organizations engaged in selling, marketing or distributing in commerce any of the products or goods of the industry as defined in paragraph (b) of this section.

(b) Products or goods of this industry consist of all varieties of fresh fruits and vegetables grown in the United States or imported from other countries.

§ 74.1 Prohibited price discrimination.

(a) It is unlawful 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 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, and are not purchased by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit, as supplies for their own use;

NOTE: Purchases by US Government: In an opinion submitted to the Secretary of War under date of December 26, 1936, the U.S. Attorney General advised that the Robinson-Patman Antidiscrimination Act "is

not applicable to Government contracts for supples." (38 Opinions, Attorney General 539.)

(2) That nothing contained in this paragraph (a) shall prevent differentials which make only due allowance for differences in the cost of production, sale, or delivery resulting from the differing methods or quantities in which industry products are sold or delivered to different purchasers;

NOTE: Cost justification under the above proviso depends upon net savings in cost based on all facts relevant to the transactions under the terms of proviso (a) (2). For example, if a seller regularly grants a discount based upon the purchase of a specified quantity by a single order for a single delivery, and this discount is justified by cost differences, it does not follow that the same discount can be cost justified if granted to a purchaser of the same quantity by multiple orders or for multiple deliveries.

(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 the market for or the marketability of the goods concerned, such as but not limiited to actual or imminent deterioration of perishable goods, obsolescence of seasonal goods, distress sales under court process, or sales in good faith in dicontinuance of business in the goods concerned;

(5) That nothing contained in this section shall prevent the meeting in good faith of an equally low price of a competitor.

NOTE 1: Subsection (b) of section 2 of the Clayton Act, as amended, reads as follows: "Upon proof being made, at any hearing on a complaint under this section, that there has been discrimination in price or services or facilities furnished, the burden of rebutting the prima facie case thus made by showing justification shall be upon the person charged with a violation of this section, 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."