Office Machine Marketing Industry
16 CFR Part 175 · Trade practice rules · in the Code of Federal Regulations 1949-1978 (14 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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: 1949 CFR
Text (1978 edition, OCR)
§ 175.0
alining, or servicing of industry prod-
ucts. Further, the industry desires to
be an active and cooperative factor in
all progressive developments of im-
proved techniques that will contribute
to the welfare and comfort of all am-
putees.
PART 175—OFFICE MACHINE
MARKETING INDUSTRY
Grovr I
Sec.
175.0 Definitions.
175.1 Deception (general).
1752 Deceptive concealment of fact that
machine is not new.
175.3 Misuse of the terms “new,” ‘“demon-
strator,” “factory rebuilt,” ‘rebuilt,”
“remanufactured,” ‘‘reconditioned,” and
“overhauled” as applied to office ma-
chines.
175.4 Typewriters; deception as to being
“new.”
175.5 Typewriters; misuse of the terms
“demonstrator,” “factory rebuilt,” “re-
built,” “remanufactured,” ‘recondi-
tioned,” and “overhauled” as applied to
typewriters.
175.6 Alteration or removal of serial num-
bers.
175.7 Deception as to “discontinued” or
“obsolete” modeis.
175.8 Misrepresentation as to character of
business.
175.9 Misrepresenting products as con-
forming to standard.
175.10 Substitution of products.
175.11 Guarantees, warranties, etc.
175.12 Misrepresentation as to installment
sales contracts, their terms, conditions,
etc.
175.13 False invoicing.
175.14 Misuse of the terms ‘“‘special,”’ ‘‘bar-
gain,” ‘‘close-outs,” ‘discontinued Lines,’’
etc.
175.15 Fictitious prices.
175.16 False and misleading price quota-
tions.
178.17 Inducing breach of contract.
175.18 Enticing away employees.
175.19 Defamation of competitors or dis-
paragement of their products.
175.20 Commercial bribery.
175.21 Procurement of competiters’ confi-
dential information by unfair means and
wrongful use thereof.
175.22 Unfair threats of infringement
sults.
175.23 Coercing purehase of one product as
@ prerequisite to the purchase of one or
more other products.
175.24 Exclusive or preemptive deals to
eliminate or suppress competition.
Title 16—Commerciai Practices
Sec.
175.25 Prohibited discrimination.
175.26 Aiding or abetting use of unfair
trade practices.
Grovp IT
175.101 Record keeping.
COMMITTEE ON TRADE PRACTICES
175.201 Industry committee.
Avruoniry: Secs. 6(g), 5, 38 Stat. 722, 719;
15 U.S.C. 46(g), 45, unless otherwise noted.
Source: 13 FR 856, Feb. 26, 1948, unless
otherwise noted.
Grovur I
8175.0 Definitions.
“Office machines’: As used in this
part the term “office machines” shall
include all machines and mechanical
devices which have for their principal
function the performance, or alding in
the performance, of office work, or the
training or schooling for office work;
also, parts and accessories for such
machines and devices. The term
“office machines” shall embrace both
power-driven and manually-operated
machines and devices of the character
‘mentioned, whether new or not new,
and without exception shall include,
but not be limited to, typewriters,
stenotype machines, bookkeeping ma-
chines, adding machines, addressing
machines, calculating machines, dupli-
cating machines, autograph registers,
and dictating machines, of all kinds,
wherever used and whether station-
ary, portable, or other type.
Products of the industry embrace all
such office machines as above defined,
including parts and accessories there-
or.
§ 175.1 Deception (general).
It is an unfair trade practice to make
or cause to be made, directly or indi-
rectly, verbally or through advertising,
pictorial representation, invoice, tag,
label, mark, or writing upon the prod-
uct itself, or otherwise, any false, mis-
leading, or deceptive statement or rep-
resentation concerning the construc-
tion, composition, utility, perfor-
mance, condition, age, name, serial
number, model, durability, life expec-
tancy, speed, ease of operation, manu-
facture, distribution, price, or terms or
condition of sale, lease, or rental, of
52
Chopter |—Federal Trade Commission
any office machine; or concerning any
service or training offered in connec-
tion with the sale, lease, or rental of
any such machine; or concerning the
repair and replacing of parts of any
consumer’s machine; or which is false
or misleading in any other respect.
$175.2 Deceptive concealment of fact that
machine is not new.
(a) Office machines which have been
rebuilt, remanufactured, recondi-
tioned, overhauled, repaired, refin-
ished, or otherwise made to have the
appearance of not being secondhand
machines, or of not having been used,
shall be permanently and clearly
marked so as to disclose that such
products are not new, or that they are
secondhand, used repaired, etc., as the
case may be. Such permanent mark
may be placed on the back of the ma-
chine, provided it is cleariy visible.
Unless such permanent mark is con-
spicuously placed, the machine shall
also carry a tag, prominentiy placed,
showing the facts required to be dis-
closed by the permanent mark.
(b) It is an unfair trade practice to
offer for sale, sell, or distribute any
such office machine without being so
marked and/or tagged, such omission
having the capacity and tendency or
effect of causing purchasers or pro-
spective purchasers to be misled or de-
ceived.
(c) It is also an unfair trade practice
to offer for sale, sell, or distribute by
any other means any secondhand or
used office machine as and for a new
machine, subject, however, to the pro-
visions of §§ 175.3 and 175.4 of this
part relating to the use of the word
“new” in respect to typewriters.
§ 175.3 Misuse of the terms “new,” “dem-
onstrator,” “factory rehuilt,” “rebuilt,”
“remanufactured,” “reconditioned,”
and “overhauled” as applied to office
machines.
It is an unfair trade practice, by use
of the terms “new,” “demonstrator,”
“factory rebuilt,” “rebuilt,” “remanu-
factured,” “reconditioned,” ‘“‘over-
hauled,” or any other word or term of
similar import, to misrepresent any
office machine or to use any such
words or terms under conditions
§ 175.4
having the capacity and tendency or
effect of misleading or deceiving.
§175.4 Typewriters; deception as to being
“new.”
Suhject to the provisos stated below
in this section, it is an unfair trade
practice, directly or indirectly, to
cause any typewriter to be represented
or sold as “new” unless such machine
meets all of the following require-
ments:
(a) Is made throughout of new mate-
rial and parts; and
(b) Is of a model of current manufac-
turer (or of the last model made by a
manufacturer who has discontinued
manufacturing typewriters); and
(c) Is unimpaired in appearance and
operating condition; and
(d) Has not been subjected to any
use since completion of original manu-
facture;
Provided, That nothing in this section,
however, shall be construed as inhibit-
ing use of the designation “new” as de-
scriptive of a typewriter which meets
the requirements set forth in para-
graphs (a), (b) and (c) of this section
and has been subjected to no other use
since completion of its original manu-
facture than:
(1) That necessary for the seller to
inspect and determine that it is in
proper operating condition; and
(2) That incident to brief tryouts by
prospective purchasers, which are re-
stricted to a sampling of the machine’s
performance and its suitability, and
are so limited in duration and number
as not to result in any appreciable
wear to, or impairment of the new ap-
pearance of, the machine or any part
or parts thereof (see note below); and
Provided also, That no deception is
practiced in connection with the sale
or offering for sale of such typewriter,
and no accompanying or accentuating
claim or representation is made im-
porting or implying that the machine
has not been subjected to tryout by
prospective purchasers, or by others,
when such is not the fact.
Nore: Such tryouts by prospective pur-
chasers mentioned above in subparagraph
(2) of this paragraph are not only to be of
the character specified and of brief dura-
tion, but are also to be limited in number as
opposed to extended or repeated use,
53
§ 175.5
whether as tryout or otherwise. Tryout op-
erations of the machine aggregating more
than a day may necessitate classification of
such typewriter either as a demonstrator or
used machine, or as one coming within the
further provision of this sectlon under
which disclosure of the amount of service to
which the machine has been subjected is
necessary when describing it as a “new” ma-
chine, in order to assure against misleading
or deceiving purchasers or prospective pur-
chasers.
Provided further, That when the
typewriter is not of a model of current
manufacture, or not of last model
made by a manufacturer who has dis-
continued manufacturing typewriters,
but meets the other requirements
specified in paragraphs (a), (c), and (d)
of this seetion, nothing in this seetion
shall be construed as prohibiting the
description of such typewriter as
“new”; Provided, That, in immediate
conjunction and with at least equal
conspicuousness or prominence, clear
and nondeceptive disclosure of such
fact is made.
Provided further, That when the
typewriter meets all requirements of
paragraphs (a), (b), and (c) of this sec-
tion, but has been subjected to use in
inspections or in tryouts by prospee-
tive purchasers or purchasers for a
total period of not exceeding 10 days
and has been subjected to no other use
or service, nothing in this section shall
be construed as prohibiting the de-
scription of such typewriters as “new”:
provided, such word “new,” and repre-
sentations of similar import, are ac-
companied, in immediate conjunction
and at least with equal conspicuous-
ness and prominence, by a statement
nondeceptively disciosing the fact that
the machine has been subjected to
such tryout use for a period not ex-
ceeding ten days, as for example,
This is a new typewriter which has been
in trial use for a total of not more than 10
days.
or
With the exception of having been used
on trial for a total period of 7 days, this
typewriter is a new machine.
54
Titie 16—Commorciol Practicas
§175.5 Typewriters; misuse of the terms
“demonstrator,” “factory rebuilt,” “re-
built,” “remanufactured,” “recondi-
tioned,” and “overhauled” as applied to
typewriters.
(a) It is an unfair trade practice, by
use of the terms “demonstrator,” “‘fac-
tory rebuilt,” “rebuilt,” ‘“remanufac-
tured,” “reconditioned,” ‘‘overhauled,”
or any other word or term of similar
import, to misrepresent any typewriter
or to use any such words or terms
under conditions having the capacity
and tendency or effect of misleading
or deceiving.
(b) In the application of this section
respecting typewriters, the following
provisions and definitions of the terms
mentioned shall apply:
(1) Demonstrator. A ‘““demonstrator’’
typewriter is a typewriter which is of
the model last made by the manufac-
turer and which has never been sold or
rented or subjected to any use except
by prospective purchasers for the pur-
pose of determining their preference
for such machine, or its sultability for
their use and need; Provided, however,
That when a typewriter is not of the
iatest model but meets all other re-
quirements specified for a demonstra-
tor, it may also be described as a ‘‘dem-
onstrator” if accompanied by a clear
and nondeceptive disclosure of the
fact that the machine so described is
not the latest model.
(2) Factory rebuilt. A “factory re-
built” typewriter is one which has
been stripped down to its base, or com-
pletely dismantled, and reconstructed
in a factory of the original manufac-
turer, so as to meet the following re-
quirements:
All internal and external parts made
clean and free from rust and corrosion
and all impaired, defective, or missing
parts, and all worn parts, replaced
with new parts; all frames to be unbro-
ken and unbent and to be free from
nicks; all frames, cover-plates and
nickel to have new finish; type face to
be new and to be accurately aligned;
all rubber parts to be new; all working
mechanism lubricated and properly
adjusted; and the machine to be in ex-
cellent working order; Provided, how-
ever, That when any machine is recon-
structed so as to meet such require-
ments in a factory other than that of
Chaptor |—Federal Trade Commission
the original manufacturer, nothing
herein shall be construed as prohibit-
ing the description of such machine as
a “factory rebuilt” when the term is
accompanied by a statement clearly
indicating that the work was not done
by the original manufacturer, as for
example:
Pactory Rebuilt—
By John Jones & Co.
(3) Remanufactured. Application of
the term “remanufactured” to type-
writers is not recommended, but if so
used it shall be applied only to a type-
writer which has been stripped down
to its base, or completely dismantled
and reconstructed in a factory so as to
meet the following requirements:
All internal and external parts made
clean and free from rust and corrosion
and all impaired, defective, or missing
parts, and all worn parts, replaced
with new parts; all frames to be unbro-
Ken and unbent and to be free from
nicks; all frames, cover-plates and
nickel to have new finish; type face to
be new and to be accurately aligned;
all rubber parts to be new; all working
mechanism lubricated and properly
adjusted; and the machine to be in ex-
cellent working order; and Provided
further, That the term “remanufac-
tured” when so used shall also be ac-
companied by a statement showing
the name of the remanufacturer, as
for example:
Remanvfactured—
By XYZ Typewriter Co.
(Name of original manufacturer)
or
Remanufactured—
By Doe Typewriter Co.
(4) Rebuilt. A “rebuilt” typewriter is
one which has been stripped down to
its base, or completely dismantlod and
reconstructed to meet the following
specifications:
All internal and external parts made
clean and free from rust and corrosion
and all substantially worn, impaired,
or defective or missing parts replaced
with new parts; all frames to be unbro-
Ken and unbent and free from nicks;
all frames, cover-plates and nickel to
have new finish; type face to be whole
and in excelient condition and to be
accurately aligned; all rubber parts to
55
30-035 C - 78-5
§ 175.6
be new; all working mechanism lubri-
cated and properly adjusted; and the
machine to be in excellent working
condition.
(5) Reconditioned or overhauled. An
“overhauled” or “reconditioned” type-
writer is one which has undergone
repair and conditioning to the extent
of meeting the following specifica-
tions:
All internal and external parts made
clean and free from rust and corro-
sion; all excessively worn, or impaired,
defective, or missing parts, replaced
with new parts; finish of all frames,
cover-plates, and bright parts to be in
good condition; type to be whole,
clear, and accurately aligned; all
rubber surfaces to be of such size,
shape, and condition as to give satis-
factory use; working mechanism lubri-
cated and properly adjusted; and the
machine to be in good working condi-
tion: Provided, however, That if all
other specifications in this subpara-
graph are met in all respects, and un-
impaired used parts in good service-
able condition have been installed as
replacement parts instead of new
parts, nothing in this provision shall
be construed as prohibiting the desig-
nation of such typewriter as ‘“‘recondi-
tioned” or “overhauled” provided the
fact that such replacement parts as in-
stalled were used parts instead of new
parts is clearly and conspicuously dis-
closed in immediate conjunction with
such term “reconditioned” or ‘“‘over-
hauled.”
8175.6 Alteration or removal of serial
numbers.
(a) To remove, obliterate, deface,
alter, or obscure the serial number of
any office machine and thereby create
a conditlon having the capacity or ten-
dency of misleading or deceiving pur-
chasers or prospective purchasers as to
the identity or age of such machine, or
of otherwise aiding, abetting, or caus-
ing confusion or deeeption in the mar-
keting of any such product, is an
unfair trade practice.
(b) Nothing in this section shall be
construed as preventing the replace-
ment of that part of the machine on
which the seriai number appears when
necessary to the rebuilding or repair
of such machine and when the origi-
§ 175.7
nal serial number is remarked on the
substitute part; nor shall anything in
this section be construed as preventing
the marking of an additional serial
number on a “remanufactured” or “‘re-
built” machine when in immediate
conjunction therewith there appears
the word “rebuilt,” “remanufactured,”
or an abbreviation of a distinguishing
symbol indicative thereof.
§175.7 Deception as to “discontinued” or
“obsolete” models.
It is an unfair trade practice to rep-
resent any office machine as a ‘“‘discon-
tinued” or “obsolete” model unless the
manufacturer has discontinued its
manufacture entirely or has replaced
it on the market with a new machine
or new model embodying specific ma-
terial changes in appearance, mechani-
cal design, functions, or the addition
of new features to perform new func-
tions.
§ 175.8 Misrepresentation as to character
of business.
It is an unfair trade practice for any
member of the industry to represent,
directly or indirectly, that he is a man-
ufacturer of office machines, or that
he owns or controis a factory making,
remanufacturing, or rebuilding such
machines, when such is not the fact,
or to otherwise misrepresent the char-
acter, extent, or type of his business.
§ 175.9 Misrepresenting products as con-
forming to standard.
It is an unfair trade practice to make
or publish, or cause to be made or pub-
lished, directly or indirectly, any false,
misleading, or deceptive statement or
representation, through advertising or
otherwise, representing that any prod-
ucts of the industry conform to a stan-
dard recognized in or applicable to the
industry when such is not the fact.
§ 175.10 Substitution of products.
The practice of shipping or deliver-
ing office machines which do not con-
form to samples submitted, to specifi-
cations upon which the sale is consum-
mated, or to representations made
prior to securing the order, without
the consent of the purchaser to such
substitution and with the tendency
and capacity or effect of misleading or
56
Title 16—Commerclal Practices
deceiving purchasers, prospective pur-
chasers, or the consuming public, is an
unfair trade practice.
§ 175.11 Guarantees, warranties, etc.
(a) It is an unfair trade practice to
use any guarantee respecting any
office machine, or advertisement or
representation in relation thereto,
which is false, misleading, or deceptive
because it does not make reasonable
disclosure of the conditions or limita-
tions of the guarantee, or which is
false, misleading, or deceptive for any
other reason.
(b) Without in any way limiting the
foregoing provisions of this section,
guarantees of the following type or
character shall not be used:
(1) Guarantees containing state-
ments, representations, or assertions
which have the capacity and tendency
or effect of misleading and deceiving
in any respect; or
(2) Guarantees which are so used or
are of such form, text, or character as
to import, imply, or represent that the
guarantee is broader than is in fact
true, or that the guarantee covers the
entire office machine or certain parts
thereof which are not in fact covered,
or will afford more protectlon to pur-
chasers or users than is in fact true; or
(3) Guarantees in which any condi-
tion, qualification, or contingency ap-
plied by the guarantor thereto is not
fully and nondeceptively stated there-
in, or is stated in such manner or form
as to be deceptively minimized, ob-
scured, or concealed, wholly or in part;
or
(4) Guarantees which are stated,
phrased, or set forth in such manner
that although the statements con-
tained therein are literally and techni-
cally true, the whole is misleading in
that purchasers or users are not made
sufficiently aware of certain contin-
gencies or conditions applicable to
such guarantec which materially
lessen the value or protection therecf
as a guarantec to purchasers or users;
or
(5) Guarantees which purportedly
extend for such indefinite or unlimit-
ed period of time or for such long
Period of time as to have the capacity
and tendency or effect of thereby mis-
leading or deceiving purchasers or
Choptor |—Fedoral Trado Commission
users into the belief that the product
has or is definitely known to have
greater degree of serviceability or du-
rability in actual use than is in fact
true; or
(6) Guarantees which have the ca-
pacity and tendency or effect of other-
wise misrepresenting the serviceabil-
ity, durability, or lasting qualities of
the product, such as, for example, a
guarantee extending for a _ certain
number of years or other long period
of time when the ability of the prod-
uct to last, endure, or remain service-
able for such period of time has not
been established by actual experience
or by competent and adequate tests
definitely showing in either case that
the product has such lasting qualities
under the conditions encountered or
to be encountered; or
(7) Purported guarantees in the
form of documents, promises, repre-
sentations or other form which are
represented or held out to be guaran-
tees when such is not the fact, or
when they involve any deceptive or
misleading use of the word ‘‘guaran-
tee” or term of similar import; or
(8) Guarantees issued, or directly or
indirectly caused to be used, by any
member of the industry when or
under which the guarantor fails or re-
fuses to scrupulously observe his obil-
gation thereunder or fails or refuses to
make good on claims coming reason-
ably within the terms of the guaran-
tee; or
(9) Guarantees which in themselves
or in the manner of their use are oth-
erwise false, misleading, or deceptive.
(ce) This section shali be applicable
not only to guarantees, but also to
warranties, to purported warranties
and guarantees, and to any promiss or
representation in the nature of or pur-
porting to be a guarantee or warranty.
$175.12 Misrepresentation as to install-
ment sales contracts, their terms, con-
ditions, etc.
It is an unfair trade practice to make
or publish, or cause to be made or pub-
lished, directly or indirectly, any false,
misleading, or deceptive statement or
representation, through advertising or
otherwise, concerning installment
sales contracts used, or their terms
and conditions, including down pay-
§ 175.16
ments, interest, carrying charges, etc.,
or respecting any other matters rela-
tive to such contracts or their terms
and conditions.
$175.13 False invoicing.
Withholding from or inserting in an
invoice, billing, or statement any ma-
terial information by reason of which
omission or insertion a false record is
made, whoily or in part, of the trans-
action which such invoice, billing, or
statement purports to represent, with
the effect of thereby misleading or de-
ceiving purchasers, prospective pur-
chasers, or the consuming public, is an
unfair trade practice.
$175.14 Misuse of the terms “special,”
“bargain,” “close-outs,” “discontinued
lines,” etc.
It is an unfair trade practice to ad-
vertise, or otherwise represent, regular
lines of machines as “special,” ‘bar-
gain,” ‘close-outs,” “discontinued
lines,” or by words or representations
of similar import, when such are not
true in fact; or to so advertise, de-
scribe, or otherwise represent ma-
chines where the capacity and tenden-
cy or effect thereof is to lead the pur-
chasing and consuming public to be-
lieve such machines are being offered
for sale or sold at greatly reduced
prices or at so-called “bargain” prices
when such is not the fact.
$175.15 Fictitious prices.
It is an unfair trade practice to seil
or offer for sale machines at prices
purported to be reduced from what
are in fact fictitious prices, or to seil or
offer for sale such machines at a pur-
ported reductlon in price when such
purported reduction is in fact ficti-
tious or is otherwise misleading or de-
ceptive.
$175.16 False and misleading price quota-
tions.
The publishing or circulating by any
member of the industry of false or
misleading price quotations, price lists,
or terms or conditions of sale, with the
tendency and capacity or effect of mis-
leading or decelving purchasers, pro-
spective purchasers, or the consuming
pubilc, is an unfair trade practice.
57
§ 175.17
$175.17 Inducing breach of contract.
Inducing or attempting to induce
the breach of existing lawful contracts
between competitors and their custom-
ers or their suppliers by any false or
deceptive means whatsoever, or inter-
fering with or obstructing the perfor-
mance of any such contractual duties.
or services by such means, with the
purpose and effect of unduly hamper-
ing, injuring, or prejudicing competi-
tors in their business, is an unfair
trade practice.
§175.18 Enticing away employees.
Willfully enticing away the employ-
ees of competitors, with the purpose
and effect of unduly hampering, injur-
ing, or prejudicing competitors in their
business and destroying or substantial-
ly lessening competition, is an unfair
trade practice.
Nore: Nothing in this section shall be con-
strued as prohibiting employees or agents
from seeking or obtaining more favorable
employment.
$175.19 Defamation of competitors or dis-
paragement of their products.
The defamation of competitors by
falsely imputing to them dishonorable
conduct, inability to perform con-
tracts, questionable credit standing, or
by other false representations, or the
false disparagement of the grade, qual-
ity, or manufacture of the products of
competitors, or of their business meth-
ods, selling prices, values, credit terms,
policies, or services, or conditions of
employment, is an unfair trade prac-
tice.
§ 175.20 Commercial bribery.
It is an unfair trade practice for a
member of the industry, directly or in-
directly, to give, or offer to give, or
permit or cause to be given, money or
anything of value to agents, empioy-
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 principals, 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
Titie 16—Commerciai Practices
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.
$175.21 Procurement of competitors’ con-
fidential information by unfair means
and wrongful use thereof.
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 in such manner as to injure
said competitor in his business or to
suppress competition or unreasonably
restrain trade.
$175.22 Unfair threats of infringement
suits.
The circulation of threats of suit for
infringement of patents or trademarks
among customers or prospective cus-
tomers or competitors, not made in
good faith but for the purpose or with
the effect of thereby harassing or in-
timidating such customers or prospec-
tive customers, or of unduiy hamper-
ing, injuring, or prejudicing competi-
tors in their business, is an unfair
trade practice.
§ 175.23 Coercing purchase of one product
as a prerequisite to the purchase of one
or more other products.
The practice of coercing the pur-
chase of one or more products as a
prerequisite to the purchase of one or
more other products, where the effect
may be to substantially lessen compe-
tition or tend to create a monopoly or
to unreasonably restrain trade, is an
unfair trade practice.
§ 175.24 Exclusive or preemptive deals to
eliminate or suppress competition.
When the effect is or may be to sub-
stantially lessen competition, or tend
to create a monopoly, it is an unfair
trade practice for any member of the
industry to purchase or otherwise ac-
quire, in whole or in part, from a dis-
tributor or dealer, the stock of com-
peting products of any competitor of
58
Chapter |—-Federal Trade Commissien
such industry member, to make loans
to a distributor or dealer, to guarantee
a distributor or dealer increased prof-
its as compared with profits previously
obtained in the handling of competi-
tive industry products, or to furnish or
promise to furnish to a distributor or
dealer anything of value, when such
acts or practices are done:
(a) Upon any express or implied con-
dition, agreement, or understanding
that the distributor or dealer will dis-
continue handling competitive indus-
try products and will handie such
member’s industry products exclusive-
ly; or
(b) As an inducement to the distribu-
tor or dealer to discontinue handling
competitive industry products; or
(c) As an inducement to the distribu-
tor or dealer to eliminate or reduce
the display space accorded to, or dero-
gate the display of, competing indus-
try products and to grant a greater
amount of display space, or accord a
more favorable display, to such indus-
try member’s products.
$175.25 Prohibited discrimination.
(a) Prohibited discriminatory prices,
or rebates, refunds, discounts, credits,
etc., which effect unlawful price dis-
crimination. In the marketing in com-
meree of products of the industry of
like grade and quallty for use, con-
sumption, or resale within the jurisdic-
tion of the Unlted States, and subject
to paragraphs (a)(1) (i), (ii), and (iii) of
this section, it is en unfair trade prac-
tice for any member of the industry
engaged therein to discriminate in
price between different purchasers
where the effect thereof may be sub-
stantially to lessen competition or
tend to create a monopoly in any line
of commerce, or to injure, destroy, or
prevent competition with such indus-
try member or with any person who
knowingly receives the benefit of such
discrimination or with their custom-
ers.
(1) The inhibitions against such dis-
crimination in price shall be appiicable
irrespective of whether the discrimina-
tion in the price itself is effected in
the form, or through the means, of re-
bates, refunds, discounts, credits,
allowances, or other form of price dif-
ferential.
§ 175.25
(i) Nothing, however, 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 dif-
fering methods or quantities in which
the products are sold or delivered to
sald purchasers.
(ii) Nor shall anything contained in
this section prevent persons engaged
in selling products in commeree from
selecting their own customers in bona
fide transactions and not in restraint
of trade.
(iii) Nor shall anything contained in
this section prevent price changes
from time to time where made in re-
sponse to changing conditions affect-
ing either (a) the market for the prod-
ucts concerned, or (0) the marketabii-
ity of the products, such as, but not
limited to, actual or imminent deterio-
ration of perishable goods, obsoies-
cence of seasonal goods, distress sales
under court process, or sales in good
falth in discontinuance of business in
the products concerned. .
(b) Prohibited brokerage or commis-
sions. In the selling of industry prod-
ucts in commeree, it is an unfair trade
practice for any member of the indus-
try engaged therein to pay or grant, or
to receive or accept, any commission,
brokerage, or other compensation, or
any allowance or discount in lieu
thereof, except for services rendered
in connection with the sale or pur-
chase of such products, either to the
other party to such transaction or to
an agent, representative, or other in-
tormediary therein, where such inter-
mediary is acting in fact for or in
behalf, or is subject to the direct or in-
direct control, of any party to such
transaction other than the person by
whom such compensation is so granted
or pald.
(c) Prohibited advertising or promo-
tional allowances, ete. In the selling of
industry products in commeree by any
member of the industry, and in the
course thereof, it is an unfair trade
practice for such member to pay or
contract for the payment of anything
of value to or for the benefit of his
customer as compensation or in con-
sideration for certain services or faciii-
ties furnished by or through such cus-
tomer, unless such payment or consid-
59
§ 175.26
eration is available on proportionally
equal terms to all other customers of
such member competing in the distri-
bution of such products.
(1) As used in this paragraph, the
certain services or facilities referred to
are such as are furnished by or
through the customer in connection
with the processing, handling, sale, or
offering for sale, of such industry
member’s products.
(d) Prohibited discrimination in ser-
vices or facilities. In the sale of indus-
try products bought for resale, with or
without processing, it is an unfair
trade practice for any member of the
industry to discriminate in favor of
One purchaser against another pur-
chaser by furnishing certain services
or facilities upon terms not accorded
to all purchasers on proportionately
equal terms.
(1) Sald services or facilities referred
to in this paragraph are such as are
connected with the processing, han-
dling, sale, or offering for sale, of the
products purchased, and the term
“furnishing” as used in this paragraph
shall be construed as including con-
tracting to furnish, and contributing
to the furnishing of, the services or fa-
cilities.
(e) Inducing or receiving an illegal
discrimination in price. It is'an unfair
trade practice for any member of the
industry, in the course of commerce in
which he is engaged knowingly to
induce or receive a discrimination in
price which is prohibited by the provi-
sions of this section.
(f) Exemptions. The inhibitions of
this section shall not apply to pur-
chases of their supplles for their own
use by schools, colleges, universities,
public libraries, churches, hospitals,
and charitable institutions not operat-
ed for profit.
(Sec. 2, 38 Stat. 739, as amended, secs. 2, 3,
4, 49 Stat. 1527, 1528, ch. 283, 52 Stat. 446;
15 U.S.C. 13, 13a, 13b, 13c, 21a)
§ 175.26 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-
Titie 16—Commercial Practices
fied in the regulations trade practice
specified in this part.
Grovr II
§ 175.101 Record keeping.
The industry approves of the prac-
tice that every seller of office ma-
chines shall kecp an accurate record of
all machines sold showing date of sale,
make, type, serial number, model
number, condition, and purchaser’s
name and address, which record shall
be kept for a period of not less than 5
years after each sale.
COMMITTEE ON TRADE PRACTICES
§ 175.201 Industry committee.
The provisions of §16.1:! of this
chapter shall be applicable to an in-
dustry committee established under
this part.
{21 FR 1174, Feb. 21, 1956]
PART 192—OPTICAL PRODUCTS
INDUSTRY
Sec.
192.0 The industry and its products de-
fined.
192.1 Deception (general).
192.2 False advertising of non-prescription
magnifying spectacles.
192.3 False advertising of contact lenses.
192.4 Bait advertising.
192.5 Guarantees, warranties, etc.
192.6 Deceptive pricing.
192.7 Prohibited payments by dispensers to
doctors: prohibited tying of refractions
with dispensing, etc.
192.8 Prohibited discrimination.
192.9 Deception as to origin or place of
manufacture.
192.10 Misreprescnting products as con-
forming to a standard.
192.11 Misrepresentation as to character of
business.
192.12 False invoicing.
192.13 Consignment distribution.
192.14 Commercial bribery.
192.15 False disparagement of competitors
or their products.
192.16 Coercing purchase of one product as
@ prerequisite to purchase of another or
other products.
192.17 Inducing breach of contract.
192.18 Enticing away employees of com-
Petitors.
116CFR 16.1 was deleted at 36 FR 3116,
Feb. 18, 1971.
60