School Supply And Equipment Industry

16 CFR Part 117 · Trade practice rules · in the Code of Federal Regulations 1959-1978 (13 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1978 CFR · Earliest edition: 1959 CFR

Text (1978 edition, OCR)

§ 114.3

public, is an unfair trade practice. For
purposes of this section:

(a) Products which contain a smaller
proportion of fruit than specified in
the applicable requirements set forth
in § 114.1 (a), (b), (c), (d) and (e), or
which otherwise fail to conform with
the applicable minimum requirements
set forth m such paragraphs, respec-
tively, and which simulate or imitate
preserves, jams, jellies or apple butter
as described in such paragraphs, and
which are used or sold for the same
purpose, except fruit pie filling, fruit
sauce, fruit butter other than apple
butter, mint, wine and calvesfoot jel-
lies, described, represented, labeled
and sold as such, and preserved citrus
fruit products, is understood to be imi-
tation preserve, imitation jam, imita-
tion jelly or imitation apple butter, re-
spectively; and to avoid deception and
confusion of the purchasing public
they should be described, represented,
labeled and sold as such respective
imitation products.

§ 114.3 False invoicing.

Withholding from or inserting in the
invoice statements which make the in-
voice a false record, wholly or in part,
of the transaction represented on the
face thereof, with the purpose or
effect of misleading or deceiving pur-
chasers, prospective purchasers or the
consuming public, is an unfair trade
practice.

PART 117—SCHOOL SUPPLY AND
EQUIPMENT IHDUSTRY

Sec.
117.0 Definitions;
products.

the industry and its

Grour lI

117.1 Misrepresentation and misbranding
in general. :
117.2 Misrepresentation as to character of

‘business.

117.3. Misrepresenting products as con-
forming to standard or specification.

117.4 Deceptive pricing.

117.5 Guarantees, warranties, etc.

117.6 Substitution of products.

117.7 Deceptive use of trade or corporate
names, trade-marks, etc.

117.8 Passing off through imitation or sim-
ulation of trade-marks, trade names, etc.

117.9 Deceptive invoicing.

Title 16—Cammercial Practices

Sec.

117.10 Defamation of competitors or inter-
fering with or disparaging their prod-
ucts.

117.11 Inducing breach of contract.

117.12 Enticing away employees of com-
petitors.

117.13 Commercial bribery.

117.14 Procurement of competitors’ confi-
dential information.

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

117.16 Unfair threats of infringement
suits.

117.17 Prohibited sales below cost.

117.18 Exclusive deals.

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

117.20 Consignment distribution.

117.21 Use of the word “free.”

117.22 Prohibited discrimination.

117.23 Aiding or abetting use of unfair
trade practices.

AUTHORITY: Secs. 6, 5, 38 Stat. 721, 719; 15

U.S.C. 46, 45, unless otherwise noted.

Source: 22 FR 2935, Apr. 26, 1957, unless
otherwise noted.

§ 117.0 Definitions; the industry and its
products.

(a) Products of this industry consist
of equipment and supplies for schools,
colleges, universities, and other educa-
tional institutions or organizations.
Such products include, but are not
limited to, pencils, paper, crayons,
chalk, chalkboards, book covers, desks,
chairs, addressmg and duplicatmg ma-
chines, flags and banners, maps, labo-
ratory and vocational equipment and
supplies, building mamtenance and
sanitary equipment and supplies, and
outdoor and indoor playground equip-
ment. Text books are not included.

(b) Members of the industry are per-
sons, firms, corporations, and organi-
zations engaged in the manufacture,
sale, or distribution of such equipment
and supplies.

Group I

§117.1. Misrepresentation and misbrand-
ing in general.

It is an unfair trade practice to make
or publish, or cause to be made or pub-
lished, by way of advertising, labeling
or otherwise, any statement or repre-
sentation which, directly or by impli-
cation, has the capacity and tendency
or effect of misleading or deceiving

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Chapter I—Federal Trade Cammissian

purchasers or prospective purchasers
concerning the grade, quality, quanti-
ty, weight, use, size, material, ingredi-
ents, finish, character, origin, nature,
design, condition, performance, dura-
bility, resistance to water or weather,
manufacture, distribution, availability,
or delivery dates, of any industry
products, or in any other material re-
spect.

§ 117.2 Misrepresentation as to character
of business.

It is an unfair trade practice for any
member of the industry to represent,
directly or by implication, in his adver-
tising or otherwise, that he is a pro-
ducer or manufacturer of products of
the industry, or that he owns or con-
trols a factory making such products,
when such is not the fact, or in any
other manner to misrepresent the
character, extent, or type of his busi-
ness.

§117.3 Misrepresenting products as con-
forming to standard or specification.

In the sale, offering for sale, or dis-
tribution of any industry products, it
is an unfair trade practice:

(a) To falsely represent or imply
that any industry product conforms to
the requirements of any standard or
specification, whether established or
recognized by a department or unit of
a city or state government, or of the
Federal Government, by trade prac-
tice, or otherwise; or

(b) To claim or imply that any in-
dustry product conforms to any stan-
dard or specification which is inappli-
cable or which has been rescinded, re-
vised, superseded, or amended, and
thereby mislead or deceive purchasers
or prospective purchasers; or

(c) To represent or imply that any
industry product conforms to the re-
quirements of any standard or specifi-
cation without clearly disclosing the
identity of the standard or specifica-
tion to which reference is made. Such
disclosure shall be by reference to the
standard or specification on all labels,
invoices, sales literature, and other ad-
vertising containing such representa-
tion or implication.

§ 117.6

§ 117.4 Deceptive pricing.

(a) It is an unfair trade practice for
any member of the industry to repre-
sent, in advertising or otherwise, that
the price of any industry product has
been reduced from what is in fact a
fictitious price, or that such price is a
reduced or a special price when it is in
fact the regular selling price of such
product, or that the regular price
thereof is higher when such is not the
fact, or otherwise to falsely or decep-
tively represent the past or current
price of an industry product.

(b) It is an unfair trade practice for
any member of the industry, directly
or indirectly, to use or to supply to
dealers, or to aid or assist in the use
of, price tags, labels, or similar devices
which are false or fictitious, or which
such member has reason to believe are
intended to be used or will be used by
dealers or salesmen for the purpose of
misleading or deceiving the purchas-
ing or consuming public in regard to
price, or in any other material respect.

§ 117.5 Guarantees, warranties, etc.

In the sale, offering for-sale, or dis-
tribution of industry products, it is an
unfair trade practice for any industry
member:

(a) To represent, directly or by im-
plication, that any industry product is
gnaranteed or warranted unless the
nature and extent of the guarantee or
warranty, and the manner in which
the guarantor or warrantor will per-
form thereunder, are clearly and con-
spicuously disclosed; or

(bo) To use, or cause to be used, any
guarantee or warranty which does not
clearly and conspicuously disclose the
terms, conditions, and limitations of
such guarantee or warranty and the
obligations of the guarantor or war-
rantor thereunder; and

(c) To represent or imply that an in-
dustry product is guaranteed or war-
ranted, or to use any guarantee or
warranty covering an industry prod-
uct, when the guarantor or warrantor
fails or refuses to observe his obliga-
tions thereunder.

§ 117.6 Substitution of products.

It is an unfair trade practice for a
meinber of the industry to make an
unauthorized substitution of products,

417


§ 117.7

where such substitution has the capac-
ity and tendency or effect of mislead-
ing 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 representa-
tions 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.

Note: Nothing in this section shall be con-
strued as preventing the application of such
tolerances as are agreed upon between
buyer and seller or are otherwise deemed
reasonable and proper and where no misrep-
resentation or deception of purchasers is
practiced or promoted in relation to the
product or its deviation from samples or
specifications.

§ 117.7 Deceptive use of trade or corporate
names, trade-marks, etc.

It is an unfair trade practice for any
meinber of the industry to use any
trade name, corporate name, trade-
mark, 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.

§117.8 Passing off through imitation or
simulation of trade-marks, trade
names, etc.

It is an unfair trade practice for any
member of the industry to 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 trade-
marks, trade names, brands, or labels.

§117.9 Deceptive invoicing.

Withholding from or inserting in in-
voices or sales tickets any statements
or information by reason of which
omission or insertion an inaccurate or
incomplete record is made, wholly or
in part, of the transactions represent-
ed on the face of such invoices or sales

Title 16—Commerciol Proctices

tickets, with the capacity and tenden-
cy or effect of thereby misleading or
deceiving purchasers, prospective pur-
chasers, or the consuming public, is an
unfair trade practice.

§ 117.10 Defamation of competitors or in-
terfering with or disparaging their
products.

It is an unfair trade practice for any
industry member:

(a) To defame competitors by falsely
imputing to them dishonorable con-
duct, 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 distribu-
tion, or in any other respect; or

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

(d) To demonstrate obsolete models
of a competitor’s product as and for
current models, or deliberately to
tamper with, damage, or destroy com-
petitors’ products so as to disparage
the products in the eyes of customers
or prospective customers.

Norte: Nothing in this section shall be con-
strued as preventing the full, fair, and non-
deceptive comparison, by demonstration or
otherwise, of competitors’ products with the
products of another industry member
before public officials or other purchasers
or prospective purchasers.

§ 117.11 Inducing breach of contract.

(a) Knowingly inducing or attempt-
ing to induce the breach of existing
lawful contracts between competitors
and their customers or their suppliers,
or interfering with or obstructing the
performance of any such contractual
duties or services, under any circum-
stance having the capacity and ten-
dency or effect of substantially injur-
ing or lessening present or potential
competition, is an unfair trade prac-
tice.

(b) Nothing in this section is intend-
ed to imply that it is improper for an
industry meinber to solicit the busi-
ness of a customer of a competing in-
dustry member; nor is the section to
be construed as in anywise authorizing
any agreement, understanding, or

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Chapter I—Federal Trade Commission

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.

§117.12 Enticing away employees of com-
petitors.

It is an unfair trade practice for any
member of the industry willfully to
entice away employees or sales repre-
sentatives of competitors with the
intent and effect of thereby unduly
hampering or injuring competitors in
their business and destroying or sub-
stantially lessening competition: Pro-
vided, That nothing in this section
shall be construed as prohibiting em-
ployees from seeking more favorable
employment, or as prohibiting employ-
ers from hiring or offering employ-
ment to employees of competitors in
good faith and not for the purpose of
injuring, destroying, or preventing
competition.

§ 117.13 Commercial hrihery.

It is an unfair trade practice for a
member of the industry to give, or
offer to give, or permit or cause to be
given, directly or indirectly, money or
anything of value to agents, employ-
ees, or representatives of customers or
prospective customers, or to agents,
employees, or representatives of com-
petitors’ customers or prospective cus-
tomers, without the knowledge of
their employers or principais, as an in-
ducement to influence their employers
or principals to purchase or contract
to purchase products manufactured or
sold by such industry member or the
maker of such gift or offer, or to influ-
ence such employers or principals to
refrain from dealing in the products of
competitors or from dealing or con-
tracting to deal with competitors.

Nore: The above section will be construed
to embrace both direct and indirect bribery
of elected or appointed public officials and
empioyees or agents of municipal, county,
parish, or state governments, or of the Fed-
eral Government, or of any branch or divi-
sion thereof, by any industry member in
connection with the sale or offering for sale
of industry products, but it cannot and does
not limit the application of any other perti-
nent Federal or State law.

§ 117.17

§ 117.14 Procurement of competitors’ con-
fidential information.

It is an unfair trade practice for any
member of the industry to obtain in-
formation concerning the business of a
competitor by bribery of an employee
or agent of such competitor, by false
or misleading statements or represen-
tations, by the impersonation of one in
authority, or by any other unfair
means, and to use the information so
obtained so as substantially to injure
competition or unreasonably restrain
trade.

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

The practice of coercing the pur-
chase of one or more products of the
industry as a prerequisite to the pur-
chase of one or more other products,
where the effect may be substantially
to lessen competition or tend to create
a monopoly or unreasonably to re-
strain trade, is an unfair trade prac-
tice.

§117.16 Unfair threats of infringement
suits.

The circulation of threats of suit for
infringement of patents, trade-marks,
or copyrights among customers or pro-
spective customers of competitors, not
made in good faith but for the purpose
or with the effect of thereby harassing
or intimidating such customers or pro-
spective customers, or of unduly ham-
pering, injuring, or prejudicing com-
petitors in their business, is an unfair
trade practice.

§ 117.17 Prohihited sales helow cost.

(a) The practice of selling products
of the industry at a price less than the
cost thereof to the seller, with the
purpose or intent, and where the
effect is, or where there is a reason-
able probability that the effect will be,
to substantially injure, suppress, or
stifle competition or tend to create a
monopoly, is an unfair trade practice.

(b) This section is not to be con-.
strued as prohibiting all sales below
cost, but only such selling below the
seller’s cost as is resorted to and pur-
sued with the wrongful intent or pur-
pose referred to and where the effect
is, or where there is reasonable prob-

419


§ 117.18

ability that the effect will be, to sub-
stantially injure, suppress, or stifle
competition or to create a monopoly.
Among the situations in which the
requisite purpose or intent would ordi-
narily be lacking are cases in which
such sales were: (1) Of seasonal goods
near the conclusion of the season; (2)
of perishable goods in respect to which
deterioration is imminent; (3) of obso-
lescent goods; (4) made under judicial
process; or (5) nade in bona fide dis-
continuance of business in the goods
concerned.

(c) As used in this section, the term
“cost” means the respective seller’s
cost and not an average cost in the in-
dustry 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 in-
volved, and comprises all elements of
cost such as labor, material, depreci-
ation, 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, manu-
facture, processing, preparation for
marketing, sale, and delivery of the
products. Not to be included are divi-
dends or interest on borrowed or in-
vested capital, or nonoperating losses,
such as fire losses and losses from the
sale or exchange of capital assets. Op-
erating cost should not be reduced by
items of nonoperating income, such as
income from investments, and gain on
the sale of capital assets.

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

§ 117.18 Exclusive deals.

It is an unfair trade practice for any
member of the industry to sell or con-
tract for the sale of any industry prod-
ucts, whether patented or unpatented,
for use, consumption, or resale within
the United States or any Territory
thereof or the District of Columbia or
any insular possession or other place
under the jurisdiction of the United
States, or to fix a price charged there-
for, or discount from, or rebate upon,

Title 16—Commercial Practices

such price, on the condition, agree-
ment, or understanding that the pur-
chaser thereof shall not use or deal in
new, used, or rebuilt products of a
competitor or competitors of such in-
dustry member, where the effect of
such sale or contract for sale, or such
condition, agreement, or understand-
ing, may be to substantially lessen
competition or tend to create a mo-
nopoly in any line of commerce.

§ 117.19 Prohihited forms of trade re-
straints (unlawful price fixing, etc.).!

It is an unfair trade practice for any
member of the industry, either direct-
ly or indirectly, to engage in any
planned common course of action, or
to enter into or take part in any un-
derstanding, agreement, combination,
or conspiracy, with one or more mem-
bers of the industry, or with any other
person or persons, to fix or maintain
the price of any goods or otherwise
unlawfully to restrain trade; or to use
any form of threat, intimidation, or
coercion to induce any member of the
industry or other person or persons to
engage in any such planned common
course of action, or to become a party
to any such understanding, agreement,
combination, or conspiracy.

§ 117.20 Consignment distrihution.

(a) It is an unfair trade practice for
any member of the industry to employ

'The inhibitions of this section are sub-

ject to Pub. L. 542, approved July 14, 1952,
66 Stat. 632 (the McGuire Act) which pro-
vides that with respect to a commodity
which bears, or the label or container of
which bears, the trade-mark, brand, or
name of the producer or distributor of such
commodity and which is in free and open
competition with commodities of the same
general class produced or distributed by
others, a seller of such a commodity may
enter into a contract or agreement with a
buyer thereof which establishes a minimum
or stipulated price at which such commodity
may be resold by such buyer when such con-
tract or agreement is lawful as applied to in-
trastate transactions under the laws of the
State, Territory, or territorial jurisdiction in
which the resale is to be made or to which
the commodity is to be transported for such
resale, and when such contract or agree-
ment is not between manufacturers, or be-
tween wholesalers, or between brokers, or
between factors, or between retailers, or be-
tween persons, firms, or corporations in
competition with each other.

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Chapter I—Federal Trade Commission

the practice of shipping industry prod-
ucts on consignment or pretended con-
signment for the purpose and with the
effect of artificially clogging or closing
trade outlets and unduly restricting
competitors’ use of said trade outlets
in getting either products to consum-
ers through regular channels of distri-
bution, thereby injuring, destroying,
or preventing competition, or tending
to create a monopoly or unreasonably
to restrain trade.

(b) Nothing in this section shall be
construed as restricting or preventing
consignment shipping or marketing of
industry products in good faith where
suppression of competition, restraint
of trade, or undue interference with
competitors’ use of the usual channels
of distribution, is not effected; nor
shall anything in this section be con-
strued to authorize any agreement,
understanding, or planned common
course of action by and between indus-
try members mutually to conform or
restrict their practice of shipping
goods on consignment with the intent
or effect of lessening competition.

8117.21 Use of the word “free.”

In connection with the sale, offering
for sale, or distribution of industry
products, it is an unfair trade practice
to use the word “free,”’ or any other
word or words of similar import, in ad-
vertisements or in other offers to the
public, as descriptive of an article of
merchandise, or service, which is not
an unconditional gift, under the fol-
lowing circumstances:

(a) When all the conditions, obliga-
tions, or other prerequisites to the re-
ceipt and retention of the ‘‘free’’ arti-
cle of merchandise or service offered
are not clearly and conspicuously set
forth at the outset so as to leave no
reasonable probability that the terms
of the offer will be misunderstood;
and, regardiess of such disclosure:

(b) When, with respect to any article
of merchandise required to be pur-
chased in order to obtain the “free”
article or service, the offerer (1) in-
creases the ordinary and usual price of
such article of merchandise, or (2) re-
duces its quality, or (3) reduces the
quantity or size thereof.

Nore: The disclosure required by para-
graph (a) of this section shall appear in

§ 117.22

close conjunction with the word “free” (or
other word or words of similar import)
wherever such word first appears in each
advertisement or offer. A disclosure in the
form of a footnote, to which reference is
made by use of an asterisk or other symbol
placed next to the word “free,” will not be
regarded as compliance.

$117.22 Prohihited discrimination. ”

(a) Prohibited discriminatory prices,
rebates, refunds, discounts, credits,
etc., which effect unlawful price dis-
erimination. It ls an unfair trade prac-
tice for any member of the industry
engaged in commerce, in the course of
such commerce, to grant or allow, se-
cretly 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, ef-
fects 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 mo-
nopoly 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, con-
sumption, or resale within any place
under the jurisdiction of the United
States;

(2) That nothing contained in this
paragraph shall prevent differentials
which make only due allowance for
differences in the cost of manufacture,
sale, or delivery resulting from the dif-
fering methods or quantities in which

2As used in this section, the word ‘‘com-
merce” means ‘“‘trade or commerce among
the several States and with foreign nations,
or between the District of Columbia or any
Territory of the United States and any
State, Territory, or foreign nation, or be-
tween any insular possessions or other
places under the jurisdiction of the United
States, or between any such possession or
place and any State or Territory of the
United States or the District of Columbia or
any foreign nation, or within the District of
Columbia or any Territory or any insular
possession or other place under the jurisdic-
tion of the United States.”

421


§ 117.22

such commodities are to such purchas-
ers 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;

(4) That nothing contained in this
paragraph shall prevent price changes
from time to time where made im re-
sponse to changing conditions affect-
ing the market for or the marketabil-
ity of the goods concerned, such as but
not limited to obsolescence of seasonal
goods, actual or imminent deteriora-
tion of perishable 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, or the services or facilities
furnished by a competitor (see para-
graph (d) of this section).

Nore: Cost justification under paragraph
(a2) of this section depends upon net sav-
ings in cost based on all facts relevant to the
transactions under the terms of such sub-
section. For example, if a seller regularly
grants a discount based upon the purchase
of a specified quantity by a single order for
a single delivery, and this discount is justi-
fied by cost differences, it does not follow
that the same discount can be cost justified
if granted to a purchaser of the same quan-
tity by multiple orders or for multiple deliv-
eries.

In complaint proceedings, justification of
price differentials under paragraphs (a) (2),
(4) and (5) of this section is a matter of af-
firmative defense to be established by the
person or concern charged with price dis-
crimination.

(b) Prohibited brokerage and com-
missions. It is an unfair trade practice
for any meinber of the industry en-
gaged 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 dis-
count in lieu thereof, except for ser-
vices 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

Title 16—Commercial Proctices

acting in fact for or in behalf, or is
subject to the direct or indirect con-
trol, of any party to such transaction
other than the person by whom such
compensation is so granted or paid.

(c) Prohibited advertising or promo-
tional 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 adver-
tismg 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 connec-
tion with the processing, handling,
sale, or offering for sale of any prod-
ucts or commodities manufactured,
sold, or offered for sale by such
member, unless such payment or con-
sideration is available on proportional-
ly equal terms to all other customers
competing in the distribution of such
products or commodities.

(d) Prohibited discriminatory ser-
vices or facilities. It is an unfair trade
practice for any member of the indus-
try engaged in commerce to discrimi-
nate 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 furnishmg, or by contribut-
ing to the furnishing of, any services
or facilities connected with the pro-
cessing, handiing, sale, or offering for
sale of such commodity so purchased
upon terms not accorded to all com-
peting 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 fore-
going provisions of this section.

Note: This paragraph is a re-statement 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 vio-
lation, 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 paragraph (a) (2), (4) or (5)

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Chapter i—Federol Trade Commission

of this section. When, in any such proceed-
ings, 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 result-
ing 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 compet-
ing 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 char-
acter specified as to justify the price differ-
ential.

(f) Exemptions. The inhibitions of
this section shall not apply to pur-
chases of their supplies for their own
use by schools, colleges, universities,
public libraries, churches, hospitals,
and charitable institutions not operat-
ed for profit.

$117.23 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, direct-
ly or indirectly, to use or promote the
use of any unfair trade practice speci-
fied in the foregoing sections of this
part.

PART 118—MiIRROR INDUSTRY

Sec.

118.0 Definitions.

118.1 Deception (general).

118.2 Misrepresentation of kind or type of
industry products.

118.3 Disclosure of foreign origin.

118.4 Disclosure of fact that products are
“rejects,” “seconds,” etc.

118.5 Misrepresenting products as con-
forming to standard.

118.6 Deceptive pricing.

118.7 Deceptive use or imitation or simula-
tion of trade or corporate names, trade-
marks, etc.

118.8 False invoicing.

118.9 Guarantees, warranties, etc.

§ 118.1

Sec.

118.10 Substitution of products.

118.11 Commercial bribery.

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

118.13 Unfair threats of infringement
suits.

118.14 Inducing breach of contract.

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

118.16 Prohibited discrimination.

118.17 Aiding or abetting use of unfair
trade practices.

Autnorirty: Secs. 6, 5, 38 Stat. 721, 719; 15
U.S.C. 46, 45, unless otherwise noted.

Source: 27 FR 6213, June 30, 1962, unless
otherwise noted.

$118.0 Definitions.

As used in these rules the terms ‘‘In-
dustry Member’ and “Industry Prod-
ucts” shall have the following mean-

(a) Industry member: Any person,
firm, corporation or organization (in-
cluding manufacturers, wholesalers,
jobbers, importers, retailers, etc.) en-
gaged in the manufacture, sale, offer-
ing for sale, or distribution of industry
products as defined below.

(b) Industry products. All kinds and
types of mirrors both utilitarian and
decorative.

(c) For the purposes of these rules
the following definitions shall apply:

Plate giass: A transparent glass, the two
surfaces of which are flat and parallel so
that they give clear and undistorted vision
and reflection, manufactured either by
floating hot glass in ribbon form upon a
heated liquid of greater density than that of
glass or by grinding and polishing a ribbon
of glass formed between two rolls.

Window glass: A transparent glass which
has been drawn or rolled, has giossy, fire
polished surfaces and a characteristic wavi-
ness of its surfaces which is visible when
viewed at an acute angle or in reflected
light. Window glass is sometimes referred to
in the industry as sbeet or shock glass.

(27 FR 6213, June 30, 1962, as amended at
37 FR 18448, Sept. 12, 1972]

§ 118.1 Deception (general).

It is an unfair trade practice for any
industry member in connection with
the sale, offering for sale, or distribu-
tion of industry products to use any

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