monophonic recording if a clear and conspicuous disclosure is made, in immediate conjunction therewith, that the recording has been altered, changed, or re-recorded to simulate stereophonic reproduction.

(b) No industry member shall use the words "true" or "genuine," or any other word or phrase of like meaning, in conjunction with the word "stereo" or "stereophonic," or any other word or phrase of like meaning, to describe or refer to a recording that was not derived from an original live recording in which a minimum of two separate channels were employed. [Rule 16]

§ 67.17 Cancellation of membership in commercial club or membership organizations.

In the operation or management of any commercial phonograph record club or membership organization, industry members shall not:

(a) Represent, directly or by implication, that persons may cancel membership if, in fact, cancellation is not always permitted without any conditions or limitations, unless a full and clear disclosure of all conditions, limitations or prerequisites to cancellation are made in immediate conjunction with all such representations; or

(b) Ship merchandise and attempt to collect the price of such merchandise when the right of cancellation of membership has been exercised and proper notification of cancellation has been given. [Rule 17]

§ 67.18 Misrepresenting products as conforming to standard.

In the sale, offering for sale, or distribution of any industry products, members of the industry shall not represent or imply, through advertising or otherwise, that such products conform to any standards recognized in or applicable to the industry when such is not the fact. [Rule 18]

§ 67.19 Misrepresentation as to character of business.

Members of the industry shall not represent, directly or by implication, in advertising, by trade or corporate name, or otherwise, that they produce or manufacture products of the industry, or that they own or control a plant making such products, when such is not the fact, or that they are a manufacturer, wholesale distributor, or a wholesaler when such is

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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 23] § 67.24 Guarantees, warranties, etc.

(a) Industry members shall not represent in advertising or otherwise that

71.1 Deception (general).

71.2 Misrepresentation as to the origin of industry products.

71.3 Misrepresentation as to the size of industry products.

71.4 Misrepresentation as to character of business

71.5 Deceptive pricing. 71.6 Misrepresenting industry products as "Hand Braided" or "Hand Made."

AUTHORITY: The provisions of this Part 71 issued under secs. 6, 5, 38 Stat. 721, 719; 15 U.S.C. 46, 45.

SOURCE: The provisions of this Part 71 appear at 29 F.R. 7927, June 23, 1964, unless otherwise noted.

§ 71.0 Definitions.

(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 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 12 percent in any dimension (length or width). [Rule 31

§ 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.

§ 72.2

Misrepresentation in general.

The making or causing or permitting to be made or published any false, untrue, or deceptive statement, by way of advertisement or otherwise, concerning the grade, quality, quantity, substance, character, nature, origin, size, or preparation of any product of the industry, and having the tendency and capacity to mislead or deceive purchasers or prospective purchasers, is an unfair trade practice.

§ 72.4 Sales below cost.

The selling of goods below 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 to unreasonably restrain trade is an unfair trade practice.

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