cealment or nondisclosure of the fact that such ribbon products are "cut-edge," with the deceptive capacity and tendency or effect mentioned.

NOTE: To promote and facilitate observance of this section, it is deemed proper practice for manufacturers and others marketing "cut-edge" ribbon products for resale in retall stores to supply their customers with counter markers and signs clearly indicating that the ribbon products displayed at such counters are "cut-edge" and to otherwise assist in making such disclosure and segregation as is necessary to avoid deception and to fully inform the purchasing public.

GROUP II

§ 138.101 Unwarranted return of merchandise.

The practice, by members of the industry, of selling ribbons and later permitting the purchaser to return the same for credit or refund of purchase price, without just cause, creates waste and loss, increases the cost of doing business to the detriment of both the industry and the public, and is condemned by the industry, subject, however, to requirements and limitations set forth in the provisions of Rule 14 (§ 138.14) of Group I, and subject also to the general limitation that members of the industry shall not engage in any combination or conspiracy in restraint of trade or use any other illegal methods in the regulation, control or prevention of the return of merchandise.

§ 138.102 Maintainence of accurate records.

It is the judgment of the industry that each member should independently keep proper and accurate records for determining his costs.

COMMITTEE ON TRADE PRACTICES

§ 138.201 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]

§ 139.1 Misrepresentation as to character of business.

It is an unfair trade practice for any person, firm or corporation to represent, directly or indirectly, that he or it is a manufacturer, producer or importer of wines or that he or it owns or controls a vineyard or vineyards wherein are grown the fruits from which his or its wines are produced, when such is not the fact, or in any other manner to misrepresent the character, extent or type of his or its business.

§ 139.2 False invoicing.

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

§ 139.3 Substitution of products.

The practice of shipping or delivering products which do not conform to specifications provided for in the contract or order or to representations made concerning such products, without the consent of the purchasers to such changes or substitutions and with the tendency and capacity or effect of misleading or de

ceiving purchasers, prospective purchasers or the consuming public, is an unfair trade practice.

§ 139.4 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 grade, quality or manufacture of the products of competitiors or of their business methods, selling prices, values, credit terms, policies or services, is an unfair trade practice.

139.5 Imitation of trade-marks, etc. The imitation or simulation of the trade-marks, trade names, brands or labels of competitors, with the tendency and capacity or effect of misleading or deceiving purchasers, prospective purchasers or the consuming public, is an unfair trade practice.

§ 139.6 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 a manner as to injure said competitor in his business or to suppress competition or unreasonably restrain trade.

§ 139.7 Threats of suit.

The circulation of threats of suit for infringement of patents or trade-marks among customers or prospective customers of competitors, not made in good faith but for the purpose or with the effect of harrassing or intimidating such customers or prospective customers or of unduly hampering, injuring or prejudicing competitors in their businesses, is an unfair trade practice.

§ 139.8 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

(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, 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;

1 Paragraph (a) of § 139.10 shall not be construed as embracing practices prohibited by paragraphs (b), (c) and (d) of this section.

(4) That nothing contained in this section shall prevent price changes from time to time where made in response to changing conditions affecting either (1) 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 wherein such intermediary is acting in fact 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 by furnishing, or by contributing to the furnishing of, any services or facilities con

nected 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 foregoing provisions of this section. (Sec. 2, 38 Stat. 730, as amended, secs. 2, 3, 4, 49 Stat. 1527, 1528; 15 U. S. C. 13, 13a, 13b, 21a)

§ 139.11

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

It is an unfair trade practice for any person, firm, partnership, corporation or association:

(a) To use, directly or indirectly, any form of threat, intimidation or coercion against any member of the industry 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 concert of action with one or more persons, firms, partnership, corporations or associations to fix, maintain or enhance prices, suppress competition or restrain trade.

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. Sales below cost by a competitor not in a sufficiently strong competitive position to produce, and not actually producing, the monopolistic or restraining effect mentioned, do not fall within the inhibitions of this section.

Making, or causing to be made or published, any false, misleading or deceptive statement or representation, by way of advertisement or otherwise, concerning the grade, quality, quantity, substance, character, size, material, content, origin, preparation, manufacture or distribution of any industry product, or in any other material respect, is an unfair trade practice.

§ 140.2 Deceptive marking, branding, or devices.

The sale or offering for sale of any product of the industry by any false or deceptive means or device, or the false or deceptive marking or branding of products of the industry, with respect to the grade, quality, quantity, use, material, content, preparation, manufacture or distribution of such products, or in any other material respect, is an unfair trade practice.

§ 140.3 Misrepresentation of vehicle.

The marking, branding, advertising or representing of any industry product as "Pure Putty," "Pure Linseed Putty," "Linseed Oil Putty," or by words, signs, abbreviations or other representations of similar import or meaning, as descriptive of putty the vehicle of which is not composed wholly of pure linseed oil, is an unfair trade practice. Nothing in this section, however, shall be construed as prohibiting the use in such putty of necessary or desirable amounts of drier: Provided, The presence of such drier is fully and nondeceptively disclosed on the label and purchasers of the putty are informed of such content of drier.

§ 140.4 Deceptive concealment.

(a) In the case of wood sash putty, in which mineral or other oils are used in the vehicle as an adulterant or as a substitute for linseed oil, in whole or in part, it is an unfair trade practice to conceal or fail or refuse to disclose the presence of such adulterant or substitute oils, with the capacity and tendency or effect of thereby misleading or deceiving the purchasing or consuming public.

(b) Nondisclosure, or concealment from purchasers, of any ingredient of a product offered for sale or sold as or for putty where such nondisclosure or concealment is practiced by the seller with

the tendency and capacity or effect of thereby misleading or deceiving the purchasing or consuming public, is an unfair trade practice.

§ 140.5 Misrepresentation of pigment.

The marking, branding, advertising or representing of any industry product as "Chalk Putty," "Chalk Whiting Putty" or "True Chalk Whiting Putty," or by words, signs, abbreviations or other representations of similar import or meaning, as descriptive of putty the pigment of which is not composed wholly of pure chalk whiting, is an unfair trade practice. § 140.6 Misrepresentation of white lead.

It is an unfair trade practice, directly or by implication, to advertise, describe, mark, brand, label or otherwise represent any putty (a) as containing white lead when such is not the fact; or (b) as containing more white lead than is in fact present in the product; or (c) as being white lead putty when the same in fact contains no white lead or when the putty does not contain white lead in sufficient proportion to impart to the product substantial and effectual white lead characteristics or properties; or (d) to advertise, describe, mark, brand, label or represent putty in any other manner which has the capacity and tendency or effect of misleading or deceiving the purchasing or consuming public as to the presence of lead or as to the kind, character or percentage thereof contained in the products.1

1 In respect to putty marketed through dealer-channels of trade to the consuming public, represented or sold as containing lead or as being white lead putty, disclosure shall be made on the label or container of the kind or type of lead, whether carbonate or sulphate, and the total percentage of lead contained in the product, to the end that misrepresentation or deceptive concealment as to the lead content of the product may be avoided and prevented. And the failure or refusal to make such disclosure with the capacity and tendency or effect of thereby misleading or deceiving the purchasing or consuming public is an unfair trade practice.

tendency or effect of misleading or deceiving the purchasing or consuming public, is an unfair trade practice. § 140.8 Defamation of competitors or disparagement of their products.

The defamation of competitors by falsely imputing to them dishonorable conducts, inability to perform contracts, questionable credit standing, or by other false representations, or the false disparagement of the grade, quality or manufacture of the products of competitors, or of their business methods, selling prices, values, credit terms, policies or services, or conditions of employment, is an unfair trade practice.

§ 140.9 Commercial bribery.

Directly or indirectly to give, or permit to be given, or offer to give, 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 any industry products from the maker of such gift or offer, or to influence such employers or principals to refrain from dealing or contracting to deal with competitors, is an unfair trade practice.

§ 140.10 False invoicing.

Withholding from or inserting in invoices, bills of lading, delivery receipts or other documents of title 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, bills of lading, delivery receipts or other documents of title, with the effect of thereby misleading or deceiving the purchasing or consuming public, is an unfair trade practice.

§ 140.11 Use of short-weight containers.

The selling or offering for sale of putty in so-called short-weight containers or packed in odd-size or oddshaped containers or packages simulating in size or shape standard size or shaped containers or packages which are known to the public as standard containers of definite capacity, with the tendency and capacity or effect of misleading or deceiving the purchasing or consuming public as to the contents of

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