or conditions of sale, or reports as to production or sales, with the tendency and capacity or effect of misleading or deceiving purchasers, prospective purchasers or the consuming public, is an unfair trade practice. § 110.11 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 scheme of chance, is an unfair trade practice. § 110.12 Prohibited discrimination.1 (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, or credit, or freight or transportation cost or any percentage thereof, or other form of price differential (whether in the guise of samples or otherwise), where such rebate, refund, discount, or credit, or freight or transportation cost or any percentage thereof, 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; 1 As used in this section the word "commerce" means "trade or commerce among the several States and with foreign nations, 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." (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 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 te 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 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 in paragraphs (a) to (d) 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. § 110.13 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 §§ 110.1 to 110.12. § 110.103 Information as to width, Gount and weight to appear on invoices and confirmations of orders. When goods are sold by specifications or construction, in order that accurate information regarding the type of goods sold or offered for sale may be known to purchasers, the industry approves the practice of placing on the confirmation of order and on the invoice the gray construction, i. e., gray width, count and weight, in the case where the goods sold are to be delivered in the gray; and in the case where the goods sold are to be delivered in the finished state, the industry approves the practice of placing on the confirmation of order and invoice the finished construction, i. e., the width, count and weight in such finished state. The omission from the confirmation of order or invoice of any such information required by this section is condemned by the industry. § 110.104 Use 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. However, the furnishing of samples shall not be carried out in a manner involving discrimination contrary to the provisions of § 110.12. 113.14 113.101 113.102 Commercial bribery. Threats of suit. False marking or branding. Imitation of names, etc. trade-marks, trade Coercing purchases. Inducing breach of contract. False invoicing. Aiding or abetting use of unfair trade practices. False price quotations. GROUP II Unwarranted return of merchan dise. Cost accounting. AUTHORITY: The provisions of this Part 113 issued under secs. 6(g), 5, 38 Stat. 722, 719; 15 U.S.C. 46(g), 45. SOURCE: The provisions of this Part 118 contained in trade practice rules. Ladies' Handbag Manufacturing Industry, FTC, Aug. 18, 1936, unless otherwise noted. § 113.1 GROUP I Misrepresentation in general. The making or causing or permitting to be made or published, any false, untrue, or deceptive statements or representation, by way of advertisement or otherwise, concerning the grade, quality, quantity, substance, character, nature, origin, size or preparation of any product of the industry, or concerning credit terms, values, policies, services, or the nature or form of the business conducted, having the tendency or capacity to mislead or deceive purchasers or prospective purchasers, is an unfair trade practice. § 113.2 Defamation of competitors. 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 grade or quality of the goods of competitors, their credit terms, values, policies, services, or the nature or form of the business conducted, with the tendency or capacity to mislead or deceive purchasers or prospective purchasers, is an unfair trade practice. § 113.3 Sales below cost. The practice of selling goods below the seller's cost, with the intent and with the effect of injuring a competitor and where the effect may be to substantially lessen competition or tend to create a monopoly or unreasonably restrain trade, is an unfair trade practice. All elements recognized by good accounting practice as proper elements of such cost shall be included in determining cost under this section. § 113.4 Commercial bribery. principals to refrain from dealing or contracting to deal with competitors, is an unfair trade practice. § 113.5 Threats of suit. The circulation of threats of suit for infringement of patents or trade-marks among customers or prospective customers of a competitor, not made in good faith but for the purpose of harassing or intimidating such customers or prospective customers, or otherwise prejudicing or injuring competitors in their businesses, is an unfair trade practice. § 113.7 False marking or branding. The practice of branding or marking or packing any products, or causing the same to be branded or marked or packed in a manner which is calculated to or does deceive or mislead purchasers, prospective purchasers, or the consuming public, with respect to the brand, grade, quality, value, quantity, origin, size, substance, character, nature, material, content, or preparation of such products, is an unfair trade practice. § 113.9 Imitation of trade-marks, trade names, etc. The imitation of the trade-marks, trade names, or other marks of identification of competitors, having the tendency or capacity to mislead or deceive purchasers or prospective purchasers, is an unfair trade practice. § 113.10 Coercing purchases. The practice of coercing the purchase of one or more products as a prerequisite to the purchase of one or more other products where the effect may be to substantially lessen competition or tend to create a monopoly or to unreasonably restrain trade, is an unfair trade practice. § 113.11 Inducing breach of contract. Willfully inducing or attempting to induce the breach of any lawfully existing contract or contracts between competitors and their customers or their suppliers by any false or deceptive means whatsoever, or willfully interfering with or obstructing the performance of any such contractual duties or services, with the purpose and effect of unduly hampering, injuring or embarrassing competitors in their businesses, is an unfair trade practice. § 113.12 False invoicing. Withholding from or inserting in the invoice, bill of lading, or other document of title, statements which make the invoice, bill of lading, or other document of title a false record, wholly or in part, of the transaction represented on the face thereof, with the purpose or effect of misleading or deceiving purchasers, prospective purchasers, or the consuming public, is an unfair trade practice. § 113.13 Aiding or abetting use of unfair trade practices. For any member of the industry knowingly to aid or abet another in the use of unfair trade practices is an unfair trade practice. § 113.14 False price quotations. The publishing or circulating by any member of the industry of false or misleading price quotations, price lists or terms of sale, having the tendency or capacity to mislead or deceive purchasers, prospective purchasers, or the consuming public, is a unfair trade practice. GROUP II § 113.101 Unwarranted return of merchandise. The industry disapproves of the practice of accepting the return of merchandise after the same has been in the hands of the purchaser for an unreasonable length of time. § 113.102 Cost accounting. It is the judgment of the industry that each member should independently keep proper and accurate records for determining his costs. PART 114-PRESERVE MANUFAC- Sec. 114.1 Falsely advertising, marking or branding preserves. 114.2 Disclosure in respect to imitations. 114.3 False invoicing. AUTHORITY: The provisions of this Part 114 issued under secs. 6(g), 5, 38 Stat. 722, 719; 15 U.S.C. 46 (g), 45. 1 This part does not, in any respect, supplant or relieve anyone of the necessity of complying with the legal requirements of the pure food laws or other provisions of law. They are established under the Federal Trade Commission Act for the purpose of more effectively stamping out unfair competitive practices in the interest of the public, and to assist in general law enforcement to this end. SOURCE: The provisions of this Part 114 contained in trade practice rules, Preserve Manufacturing Industry, FTC, Sept. 12, 1936, unless otherwise noted. § 114.1 Falsely advertising, marking or branding preserves. The practice of selling, advertising, describing, branding, marking, labeling or packing of fruit preserves, fruit jams, fruit jellies or apple butter, or any simulation thereof, in a manner which is calculated to mislead or deceive, or has the tendency and capacity or effect of misleading or deceiving, purchasers, prospective purchasers or the consuming public, with respect to the character, nature, content, grade, quality, quantity, substance, material, preparation or manufacture of such product, or in any other material respect, is an unfair trade practice. For purposes of this section: (a) Preserve, fruit preserve, jam, fruit jam, are understood to mean the clean, sound fruit product possessing definite characteristic flavor of the preserved fruit or fruits named on the label, made by cooking or concentrating to a suitable consistency properly prepared, clean, sound, entire edible portion of fresh fruit, cold-packed fruit, canned fruit, or a mixture of two or all of these, with sugar or with sugar and water, with or without spice or vinegar, or with such harmless organic acids as may be necessary to compensate for natural acid deficiency of the particular fruit used, but excluding acids or acid salts generally recognized as chemical preservatives, and in the preparation of which fruit product there is used not less than fortyfive (45) pounds of actual fruit to each fifty-five (55) pounds of sugar. In the case of fruits deficient in pectin, or whose composition or texture prevent the preparation of preserve or jam as defined herein of the desired consistency, nothing herein shall prevent the addition of small quantities of pectin or pectinous material: Provided, however, That if such pectin or pectinous material is added, the ratio of not less than fortyfive (45) pounds of fruit to each fifty-five (55) pounds of sugar be maintained, and the finished product containing such added pectin shall contain not less than sixty-eight (68) percent water-soluble solids derived from the fruit and sugar used in its manufacture, as determined by refractometer at twenty degrees (20°) centigrade without correction for the insoluble solids present. (b) Jelly, fruit jelly, is understood to mean the clean, sound semisolid, gelatinous fruit product possessing definite characteristic flavor of the fruit or fruits named on the label, made by concentrating to a suitable consistency the strained juice, or the water extract, from fresh fruit, from cold-packed fruit, from canned fruit, or from a mixture of two or all of these, with sugar. In the case of fruits whose composition prevents the preparation of jelly of the proper texture, nothing herein contained shall prevent the use of the small quantity of pectin or pectinous material necessary to produce the proper consistency; and in the use of fruits having a natural acid deficiency, nothing herein shall prevent the use of such harmless organic acids as may be necessary to compensate for natural acid deficiency of the particular fruit used, but excluding acids or acid salts generally recognized as chemical preservatives: Provided, however, That such jelly containing such added pectin or pectinous material or such added acidulants shall contain not less than sixty-five (65) percent water-soluble solids derived from the fruit and sugar used in its manufacture, as determined by refractometer at twenty degrees (20°) centigrade, and its composition shall correspond to a ratio of not less than fifty (50) pounds of actual pure fruit juice, exclusive of added water, to each fifty (50) pounds of sugar in the original batch. (c) Apple butter is understood to mean the clean, sound product made by cooking or concentrating with sugar or apple juice, or both, the properly prepared, clean, sound, edible portion of apples (either fresh, cold-packed, canned, or evaporated) to a homogeneous semisolid consistency with or without vinegar, salt and spice, or with such harmless organic acids as may be necessary to compensate for natural acid deficiency of the fruit used, but excluding acids or acid salts generally recognized as chemical preservatives; and which apple butter contains not less than fortythree (43) percent water-soluble solids as determined by refractometer at twenty degrees (20°) centigrade without correction for the insoluble solids present, and be prepared with not more than twenty (20) pounds of sugar to each fifty (50) pounds of such edible portion of fresh apples, or of their equivalent in cold-packed, canned, or evaporated apples, exclusive of the cores, seeds and skins. (d) Corn syrup preserve, corn syrup jam, corn syrup jelly and corn syrup apple butter are understood to be fruit products conforming respectively to those specified in paragraphs (a), (b) and (c) of this section but in the manufacture of which corn syrup has been substituted wholly for sugar. Corn syrup and sugar preserves, corn syrup and sugar jam, corn syrup and sugar jelly, and corn syrup and sugar apple butter are understood to be fruit products conforming respectively to those specified in paragraphs (a), (b) and (c) of this section, but in the manufacture of which a combination of corn syrup with a substantial amount of sugar has been substituted for all sugar. Advertising, representing, branding or labeling of any such products as preserve, jam, jelly or apple butter without fully disclosing that the product is such corn syrup or corn syrup and sugar preserve, jam, jelly, or apple butter, as the case may be, with the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers or the consuming public, is an unfair trade practice within the meaning of this section. (e) Honey preserve, honey jam, honey jelly, honey apple butter, are understood to mean fruit products conforming respectively to those specified in paragraphs (a), (b), and (c) of this section but in the manufacture of which honey has been substituted wholly for sugar. Advertising, representing, branding or labeling of any such honey product without fully disclosing that the same is honey preserve, honey jam, honey jelly or honey apple butter, as the case may be, or without setting forth the word "honey" as prominently or conspicuously as any other word used as descriptive of the product, with the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers or the consuming public, is an unfair trade practice within the meaning of this section. (f) When advertising, representing. branding or labeling any preserve, jam or jelly containing substantial amounts of two or more fruits, although made in conformity with the applicable requirements of paragraphs marked (a), (b), (d) or (e) of this section, the kinds of fruit so contained in such products should be prominently and conspicuously |