(1) The commerce requirements specified in paragraph (a) of this section are present; and

(2) The price differential has a reasonable probability of substantially lessening competition or tending to create a monopoly in any line of commerce, or of injuring, destroying, or preventing competition with the industry member or with the customer receiving the benefit of the price differential, or with customers of either of them; and

(3) The price differential is not justified by cost savings (see paragraph (a) (2) of this section); and

(4) The price differential is not made in response to changing conditions affecting the market for or the marketability of the goods concerned (see paragraph (a) (4) of this section); and

(5) The lower price was not made to meet in good faith an equally low price of a competitor (see paragraph (a) (5) of this section):

Example No. 1. The granting of a discount on a purchase made by a customer which is not granted on purchases made by all other customers, or which is not granted in the same amount on the purchases of all other customers.

Example No. 2. At the end of a given period an industry member grants a discount to a customer equivalent to a fixed percentage of the total of such customer's purchases during the period and fails to grant a discount of the same percentage to all other customers on their purchases during such period.

Example No. 3. An industry member sells goods to one or more of his customers at a higher price than he charges other customers for like merchandise. It is immaterial whether or not such discrimination is accomplished by misrepresentation as to the grade and quality of the products sold.

Example No. 4. Terms 540 prox. are granted by an industry member to some customers on goods purchased by them from the industry member. Another customer or customers are, nevertheless, allowed to take an additional discount when making payment to the industry member within the time prescribed.

Example No. 5. At the time of price decline, price adjustments upon inventory of customers are granted to some customers and not to other customers.

(c) 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.

(d) 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 customers competing in the distribution of such products or commodities.

(e) 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.

NOTE: See subsection (b) of Section 2 of the Clayton Act, as amended, which is set forth in the note concluding paragraph (a) of this section.

(f) Inducing or receiving an illegal discrimination in price. It is an unfair trade practice for any person 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.

NOTE: Paragraph (f) of this section is a restatement of section 2 (f) of the Clayton Act as amended. In a complaint proceeding under this section, in order to make out a

prima facie violation, the Commission must show that the favored buyer induced or received the lower price knowing, or knowing facts from which he should have known, that such price was violative of section 2 (a) of said Act and not justified under subparagraph (2), (4), or (5) of paragraph (a) of this section. When, in any such proceeding, the issue is limited to the question of whether the price differential involved made only due allowance for differences in cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which the goods were sold and delivered, the Commission may establish a prima facie case in a number of ways, including:

(1) By showing that the buyer paying the lower price knew that the methods by, and quantities in, which the goods were sold and delivered to him by the seller, were the same as in the case of the competing buyer or buyers paying the higher price or prices; or

(2) By showing, when there is a difference in the methods or quantities in which the goods were sold and delivered by the seller to the buyer than in the case of the competing buyer or buyers paying the higher price or prices, that the buyer paying the lower price or prices knew the nature and extent of such differences and knew or should have known that they could not have resulted in sufficient cost savings of the kind and character specified as to justify the price differential.

§ 43.10 Misleading price lists.

It is an unfair trade practice for any industry member, in the course of or in connection with the offering for sale, sale or distribution of industry products, to publish or circulate price lists which have the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers in any material respect.

§ 43.11 Deceptive invoicing, etc.

It is an unfair trade practice for members of the industry to issue invoices, billings, or sales slips which by reason of misstatements therein or omissions therefrom have the capacity and tendency or effect of deceiving purchasers or prospective purchasers in any material respect.

create a monopoly, is an unfair trade practice.

(b) 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 with the wrongful intent or purpose referred to and where the effect is, or where there is reasonable probability that the effect will be, to substantially injure, suppress, or stifle competition or to create a monopoly. Among the situations in which the requisite purpose or intent would ordinarily be lacking are cases in which such sales were: (1) Of obsolescent goods; (2) of perishable goods in respect to which deterioration is imminent; (3) made under judicial process; or (4) made in bona fide discontinuance of business in the goods concerned.

(c) As used in paragraphs (a) and (b) of this section, the term "cost" means the respective seller's cost and not an average cost in the industry whether such average cost be determined by an industry cost survey or some other method. It consists of the total outlay or expenditure by the seller in the acquisition, production, and distribution of the products involved, and comprises all elements of cost such as labor, material, depreciation, taxes (except taxes on net income and such other taxes as are not properly applicable to cost), and general overhead expenses incurred by the seller in the acquisition, manufacture, processing, preparation for marketing, sale, and delivery of the products. Not to be included are dividends or interest on borrowed or invested capital, or nonoperating losses, such as fire losses and losses from the sale or exchange of capital assets. Operating cost should not be reduced by items of nonoperating income such as income from investments, and gain on the sale of capital assets.

(d) Nothing in this section shall be construed as relieving an industry member from compliance with any of the requirements of the Robinson-Patman Act.

§ 43.13 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 this part.

§ 44.1

GROUP I

Inducing breach of contract. Maliciously inducing or attempting to induce the breach of existing contracts between competitors and their customers by any false or deceptive means whatsoever, or interfering with or obstructing the performance of any such contractual duties or services by any such means, with the purpose and effect of unduly hampering, injuring, or embarrassing competitors in their businesses, is an unfair trade practice.

§ 44.2 False marking or branding.

The false marking or branding of products of the industry, with the effect of misleading or deceiving purchasers with respect to the quantity, quality, grade, or substance of the goods purchased, is an unfair trade practice.

§ 44.3 Deceptive selling methods. The sale or offering for sale of any product of the industry by any false means or device which has the tendency and capacity to mislead or deceive customers or prospective customers as to the quantity, quality, substance, or size of such product is an unfair trade practice.

The industry approves the practice 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.

§ 44.104 Further definition.

The industry hereby records its approval of the definition of a qualified manufacturer of sash, doors and millwork, to be one who manufactures and sells sash, doors and millwork.

§ 44.105 Standard form of contract.

It is the judgment of this conference that the industry should adopt in cooperation with buyers a standard form of contract which will thoroughly protect the rights of both buyers and sellers.

§ 44.106 Publication of terms of sale.

The industry approves the practice of making the terms of sale a part of all published price schedules.

PART 46-WORK GLOVE INDUSTRY

Sec.

46.0

46.1

46.2

46.3

46.4

46.5

46.6

46.7

46.8

46.9

46.10

46.11

46.12 46.13

Defamation of competitors or false

disparagement of their products. Inducing breach of contract.

Enticing away employees of competitors.

Consignment distribution.

Prohibited sales below cost.

Tie-in sales; coercing purchase of one product as a prerequisite to the purchase of other products.

46.14 Prohibited forms of trade restraints (unlawful price fixing, etc.).

As used in this part the terms "industry member" and "industry products" shall have the following meaning:

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

(b) Industry products. All kinds and types of gloves and mittens which are designed primarily for use in the performance of work or manual effort (such as, but not limited to, gloves which are in whole or in part of canvas, flannel, jersey, or leather composition which are used in the performance of manual labor; welders', electric linemen's, and industrial gloves and gauntlets of any composition; and surgeons' and household gloves of rubber, plastic, or other composition), as distinguished from gloves and mittens which are designed primarily for dress.

(a) It is an unfair trade practice for members of the industry to offer for sale or sell any industry product under any representation, 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, kind, grade, quality, quantity, size, weight, cut, color, character, substance, durability, serviceability, origin, price, terms of sale, value, preparation, production, manufacture, or distribution of such industry product or components thereof, 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 inhibitions 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 or containers in which they may be shipped, offered for sale or sold.

NOTE 1: On October 2, 1958, the Commission adopted "Guides Against Deceptive Pricing" which appear in the October 15, 1958, issue of the FEDERAL REGISTER as & notice at pages 7965-7966 and which constitute an appendix to these rules. They supply specific guidance respecting pricing representations and are to be considered as supplementing this section.

NOTE 2: Application of the Textile Fiber Products Identification Act. Work gloves falling within the scope of the Textile Fiber Products Identification Act shall, upon the Act's effective date (March 3, 1960), be labeled, invoiced, and advertised in accordance with the provisions of such Act and Commission regulations promulgated thereunder.

§ 46.2 Misrepresentation as to character of business.

It is an unfair trade practice for any member of the industry to represent, directly or indirectly, through the use of any word or term in his corporate or trade name, in his advertising or otherwise, that he is a manufacturer of industry products, or that he is the owner or operator of a factory manufacturing them, when such is not the fact, or in any other manner to misrepresent the character, extent, volume, or type of his business.

§ 46.3 Misrepresenting products as conforming to standard.

In connection with the sale or offering for sale of industry products, it is an unfair trade practice to represent, through advertising or otherwise, that such products conform to any standards recognized in or applicable to the industry when such is not the fact.

§ 46.4 Guarantees, warranties, etc.

(a) In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice for any industry member:

(1) To represent that any industry product is guaranteed unless, in close conjunction with such representation, the identity of the guarantor, the extent and nature of the guarantee, and any material conditions or limitations relating to the liability of the guarantor under the guarantee, are adequately and nondeceptively disclosed; or

(2) To offer or use any guarantee respecting an industry product under which the guarantor fails to observe his obligations; or

(3) To offer or use any guarantee which is otherwise deceptive or unfair. (b) This section shall be applicable 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.

§ 46.5 Substitution of products.

It is an unfair trade practice for a member of the industry to 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 (in bids or otherwise) 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 a substitution.

§ 46.6 Deceptive use or imitation or simulation of trade or corporate names, trademarks, etc.

It is an unfair trade practice for any member of the industry:

(a) To imitate or simulate the trademarks, trade names, brands, or labels of competitors, with the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers; or

(b) To use any trade name, corporate name, trademark, or other trade designation, which has the capacity and tendency or effect of misleading or deceiving 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.

§ 46.7 False invoicing.

It is an unfair trade practice for members of the industry to issue invoices, billings, or sales slips which by reason of misstatements therein or omissions therefrom have the capacity and tendency or effect of deceiving purchasers or prospective purchasers in any material respect.

§ 46.8 Defamation of competitors or false disparagement of their products. It is an unfair trade practice for any industry member:

(a) To defame competitiors by falsely imputing to them dishonorable conduct, inability to perform contracts, questionable credit standing, or by other false representations; or

(b) To falsely disparage competitors' products as to grade, quality, or method of manufacture and distribution, or in any other respect; or

(c) To falsely disparage the business methods, selling prices, values, credit terms, policies, services, or conditions of employment, of competitors.

NOTE: Nothing in this section shall be construed as preventing the full, fair, and nondeceptive comparison, by demonstration or otherwise, of competitors' products with the products of another industry member before purchasers or prospective purchasers.

§ 46.9 Inducing breach of contract.

(a) Knowingly inducing or attempting to induce the breach of existing lawful contracts between competitors and their customers, or between competitors and their suppliers, or interfering with or obstructing the performance of any such contractual duties or services, under any circumstance having the capacity and tendency or effect of substantially injuring or lessening present or potential competition, is an unfair trade practice.

(b) Nothing in this section is intended to imply that it is improper to solicit the business of a customer of a competing industry member; nor is the section to be construed as in anywise authorizing any agreement, understanding, or planned common course of action by two or more industry members not to solicit business from the customers of either of them, or from customers of any other industry member.

§ 46.10 Enticing away employees of competitors.

It is an unfair trade practice wilfully to entice away employees or sales representatives of competitors with the intent and effect of thereby unduly hampering or injuring competitors in their business and destroying or substantially lessening competition: Provided, That nothing in this section shall be construed as prohibiting employees from seeking more favorable employment, or as prohibiting