(4) That nothing contained in this paragraph 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 limited to obsolescence of seasonal goods, distress sales under court process, or sales in good faith in discontinuance 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: 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."

NOTE 2: Nothing in this section should be construed as prohibiting the granting of different prices which are not otherwise violative of the foregoing provisions of this section, to customers in different functional categories. For example, a seller may grant a lower price to wholesalers than to retailers to the extent that such wholesalers resell to retailers. If such wholesalers also sell at retail in competition with their customers they may not properly be granted a price lower than the prices granted to competing retailers on that portion of the goods they sell at retail.

(b) Prohibited brokerage and commissions. No member of the industry engaged in commerce, in the course of such commerce, shall pay or grant, or 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.

(c) Prohibited advertising or promotional allowances, etc. No member of the industry engaged in commerce shall 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 sales by such member, unless such payment or consideration is made known to and is available on proportionally equal terms to all other customers competing in the distribution of such products or commodities.

NOTE: Subsection (b) of section 2 of the Clayton Act, as amended, which is set forth in the note concluding paragraph (a) of this section is applicable to this paragraph (c).

(d) Prohibited discriminatory services or facilities. No member of the industry engaged in commerce shall 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 including, but not limited to, displays, exhibits, and promotional material 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: Subsection (b) of section 2 of the Clayton Act, as amended, which is set forth in the note concluding paragraph (a) of this section is applicable to this paragraph (d).

(e) Inducing or receiving an illegal discrimination in price, advertising or promotional allowances, or services or facilities. No member of the industry engaged in commerce, in the course of such commerce, shall knowingly induce or receive a discrimination in price, advertising or promotional allowances, or services or facilities, which is prohibited by the foregoing provisions of this section. [Rule 19]

§ 75.101 Interpretations.

(a) The Federal Trade Commission interprets paragraph (a) and the concluding Note in § 75.3 of the trade practice rules for the Household Furniture Industry as requiring that when a wood name is used in advertising or labeling to describe the grain design and/or color of a stain finish or other type of simulated finish which has been applied to a surface composed of something other than solid wood of the type named, it must be made clear that the wood name used is merely descriptive of the grain design and/or color or other simulated finish.

(b) Under this interpretation, unqualified phrases such as "walnut finish" and "mahogany finish” will not satisfy this requirement. But statements such as "walnut grained plastic top," "walnut color," "walnut stain," "maple stained finish," "mahogany finish on gum" and "walnut finished hardwoods" (or "softwoods," as the case may be) will satisfy this requirement if such statements are factually correct and appear in contexts which are otherwise nondeceptive.

(c) Section 75.2(3) (ii) which relates to similar representations will be interpreted consistently with the foregoing. [31 F.R. 5069, Mar. 29, 1966]

scrap iron and steel according to certain specifications by so arranging the shipments in the cars that the inferior products will not be readily discovered on surface inspection, without the consent of the consumer and/or purchasers to such substitutions and with the effect of receiving or misleading consumers and/or purchasers, is an unfair trade practice.

§ 76.2 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 their goods, with the tendency and capacity to mislead or deceive purchasers or prospective purchasers, is an unfair trade practice.

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 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.

GROUP II

§ 76.101 False billing.

The presentation or use of fictitious bills of lading or other evidence of billing, for the purpose of securing advances of money or other valuable consideration, is condemned by the industry.

§ 76.102

Credit for overweight. Failure of dealers or brokers to give credit for overweight, where credit for overweights has been passed by the consumer, is hereby condemned.

§ 76.103 Repudiation of contracts.

Contracts, either written or oral, are business obligations which should be performed in letter and spirit. The repudiation of contracts by sellers on a rising market, or by buyers on a declining market, is equally reprehensible, and is condemned by the industry.

§ 76.104 False invoicing.

Withholding from or inserting in the invoice statements which make the invoice a false record, wholly or in part, of the transaction represented on the face thereof, is condemned by the industry. § 76.105

Arbitration.

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. § 76.106 Cost accounting.

It is the judgment of the industry that each member should install a proper and accurate method for determining his cost.

COMMITTEE ON TRADE PRACTICES

§ 76.201 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]

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 their goods, with the tendency and capacity to mislead or deceive purchasers or prospective purchasers, and the tendency to injuriously affect the business of such competitors, is an unfair trade practice.

§ 81.3

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 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.

§ 81.4

Inducing breach of contract.

Willfully inducing or attempting to induce the breach of an existing contract, or the interference or attempted interference with the performance of any contractual duty for the purpose and effect of injuring or destroying the patronage, property, or business of a competitor is an unfair trade practice.

§ 81.5 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.

§ 81.101

GROUP II

Misleading price quotations. The issuance of fictitious, inflated, deflated or misleading price quotations or offers for the purchase or sale of waste paper with no purpose to accept proposals received or to make sales at the prices quoted but solely to attract purchasers to his place of business is condemned by the industry.

§ 81.102 Submission of false claims.

The submission of false claims to a supplier when same are not founded on actual mill reports or are not substantiated by authentic debit bills is condemned by the industry.

§ 81.103 False billing.

The issuance of fictitious bills of lading or other documents of title, or the willful inclusion of erroneous weights or other information therein, for the purpose of securing advances of money or full payment when the contract provides otherwise, is condemned by the industry. § 81.104 Negligence in concluding

agreements.

The practice of neglecting or failing to return signed contracts or confirmation of verbal or telephone agreements of purchase and sale with the end in view of later relying on the absence of any signed contract or memorandum as ground for repudiation of the agreement is condemned by the industry.

§ 81.105 Repudiation of contracts.

Contracts, either written or oral, are business obligations which should be performed in letter and spirit. The repudiation of contracts by sellers on a rising market, or by buyers on a declining market, is equally reprehensible, and is condemned by the industry.

§ 81.106 Willful breach of contract.

The intentional failure to fill orders or perform contracts except for act of God or other lawful cause, or the intentional withholding by the purchaser of shipping instructions with the intent of avoiding the contract is condemned by the industry.

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.

COMMITTEE ON TRADE PRACTICES

§ 81.201 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]

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 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.

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.

§ 84.6 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 their goods, with the tendency and capacity to mislead or deceive purchasers or prospective purchasers, is an unfair trade practice.

§ 84.7 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, heating capacity, size, or preparation of any product of the industry having the tendency and capacity to mislead or deceive purchasers or prospective purchasers is an unfair trade practice.

§ 84.8 False representations.

False representations in the sale or offering for sale of any product of the industry with the effect of deceiving purchasers or prospective purchasers, as to the quantity, quality, substance, size, measurement, or heating capacity of such product is an unfair trade practice. § 84.9 Imitation of trade-marks, trade

names, etc.

The imitation of the trade-marks, trade names, slogans, or other marks of identification of competitors having the tendency and capacity to mislead or deceive purchasers or prospective purchasers, is an unfair trade practice.