Wholesale Drug Industry

16 CFR Part 104 · Trade practice rules · in the Code of Federal Regulations 1938-1959 (4 annual editions)

Scanned CFR pages, OCR text may contain errors; the linked Library of Congress PDF is the authority. Not legal advice; not affiliated with the FTC. These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.

Latest edition: Library of Congress, 1959 CFR · Earliest edition: 1938 CFR

Text (1959 edition, OCR)

Chapter |[—Federal Trade Commission

other than the person by whom such
compensation is so granted or paid.

(ec) Prohibited advertising or pro-
motional allowances, etc. It is an un-
fair trade practice for any member of
the industry engaged in commerce to
pay or contract for the payment of ad-
vertising 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 compen-
sation or in consideration for any serv-
ices or facilities furnished by or through
such custoiner in connection with the
processing, handling, sale, or offering for
sale of any products or commodities
manufactured, sold, or offered for sale
by such meinber, unless such payment
or consideration is available on propor-
tionally equal terms to all other cus-
tomers competing in the distribution of
such products or comunodities.

(d) Prohibited discriminatory serv-
ices or facilities. It is an unfair trade
practice for any meinber of the industry
engaged in commerce to discrim:nate in
favor of one purchaser against another
purchaser or purchasers of a commodity
bought for resale, with or without proc-
essing, 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 coin-
modity so purchased upon terms not
accorded to all competing purchasers on
proportionally equal terms.

Nore: See subsection (b) of section 2 of
the Clayton Act as amended, which is set
forth in the note following paragraph (e)
of this section.

(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 fore-
going provisions of this section.

Note: This paragraph is a restatement of
section 2 (f) of the Clayton Act as amended.
In a complaint proceeding under this sec-
tion, 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 subparagraphs (2), (4),
or (5) of paragraph (a) of this section.
When, in any such proceeding, the issue is

81017-5919

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§ 103.9

limited to the question of whether the price
differential involved made only due allow-
ance for differences in cost of manufactur-
ing, sale, or delivery resulting from the dif-
fering methods or quantities in which the
goods were sold and delivered, the Commis-
sion 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 com-
peting 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 re-
sulted in sufficient cost savings of the kind
and character specified as to justify the price
differential.

Nore: This section is based on the pro-
visions of section 2 of the Clayton Act as
amended by the Robinson-Patman Act.

Subsection (b) of section 2 of the Clayton
Act, as amended, to which reference is made
in the note to subparagraph (5) of para-
graph (a) of this section and in the note to
paragraph (d) of this section reads as fol-
lows:

“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 re-
butting the prima facie case thus made by
showing justification shall be upon the per-
son 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 con-
tained shall prevent a seller rebutting the
prima facic 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.”

§ 103.9 Aiding or abetting use of un-
fair trade practices. It is an unfair trade
practice for any person, firin, or corpora-
tion to aid, abet, coerce, or induce an-
other, directly or indirectly, to use or
promote the use of any unfair trade
practice specified in this part.

Part 104——-Wholesale Drug
Industry [Revoked]

CODIFICATION: Part 104 was revoked, 20 F. R,
487, Jan. 21, 1955.

Page 273


§ 105.201

Part 1 05—Wholesale Tobacco
, Trade

COMMITTEE ON TRADE PRACTICES [ADDED]

Sec.
105.201 Industry committee.

§ 105.201 Industry committee. The
provisions of § 16.1 of this subchapter
shall be applicable to an industry com-
mittee established under this part.
(Sec. 6, 38 Stat. 721; 15 U.S.C.46) [21 F. R.
1174, Feb. 21, 1956]

Part 106—Fire Extinguishing Ap-
pliance Manufacturing Indus-
try [Superseded]

CopiFIcaATION: Part 106 was superseded by
Part 224 of this chapter, 19 F. R. 8654, Dec.
17, 1954.

Part 107—Vegetable Ivory
Button Industry [Revoked]

CopiIricaTIon: Part 107 was revoked, 18
F. R. 7494, Nov. 24, 1953. .

Part 109—Buff and Polishing
Wheel Manufacturing Industry
[Revised]

Sec.

109.0 Definitions.

109.1 Misrepresentation and deception
(general).

109.2 Misrepresentation as to character of
business.

109.3 Misrepresenting products as con-
forming to standard.

109.4 False and misleading price quota-
tions, etc.

109.5 Deceptive invoicing.

109.6 Substitution of products.

109.7 Prohibited sales below cost.

109.8 Inducing breach of contract.

109.9 Defamation of competitors or false
disparagement of their products.

109.10 Procurement of competitors’ confi-
dential information by unfair
means and wrongful use thereof.

109.11 Commercial bribery.

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

109.18 Prohibited discrimination.

109.14 Aiding or abetting use of unfair

trade practices.
COMMITTEE ON TRADE PRACTICES
109.201 Industry committee.

AutHoRITY: §§ 109.0 to 109.201 issued un-
der sec. 6, 38 Stat. 721; 15 U.S. C. 46. In-
terpret or apply sec. 5, 38 Stat. 719, as amend-
ed; 15 U. S. C. 45.

Page 274

Title 14—Commercial Practices

Source: §§ 109.0 to 109.201 appear at 22
F. R. 4497, June 27, 1957. ‘

Prior Amendments
1956: 21 F. R. 1174, Feb. 21.

§ 109.0 Definitions—(a) Industry
members. Persons, firms, corporations,
and organizations engaged in the manu-
facture and sale of industry products as
defined in paragraph (b) of this section:

(b) Industry products. Buffs and
contact and polishing wheels which are
constructed substantially of any textile
or other nonrigid material and used for
wiping, cleaning, oiling, or, with or with-
out abrasives, for surface finishing.

§ 109.1 Misrepresentation and decep-
tion (general). It is an unfair trade
practice for any industry member, in
connection with the offering for sale, sale,
or distribution of industry products, to
use, or cause or promote the use of, any’
trade promotional literature, advertising
matter, guarantee, warranty, mark,
brand, label, trade name, picture, design
or device, designation, or other type of
oral or written representation, however
disseminated or published, or to fail to
disclose any material fact, when such
representation or failure to disclose has

the capacity and tendency or effect of

misleading or deceiving purchasers or
prospective purchasers with respect to
the type, grade, quality, quantity, use,
size or size symbol, material, finish,
strength, thickness, composition, origin,
preparation, manufacture, or distribu-
tion of any product of the industry, or in
any other material respect.

$109.2 Misrepresentation as to char-
acter of business. It is an unfair trade
practice for any industry member, in the
course of or in connection with the offer-
ing for sale, sale, or distribution of in-
dustry products, to misrepresent the
character, extent, volume, or type of his
busimess.

§ 109.3 Misrepresenting products as
conforming to standard. 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 represent, through
advertising, personal solicitation, or
otherwise, that such products conform to
any standard or standards recognized in
or applicable to the industry when such
is not the fact.

§ 109.4 False and misleading price
quotations, etc. It is an unfair trade