Melanine Dinnerware Industry

16 CFR Part 32 · Trade practice rules · in the Code of Federal Regulations 1967-1967 (1 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1967 CFR · Earliest edition: 1967 CFR

Text (1967 edition, OCR)

§ 31.4

Group I
§ 31.1 Iuducing breach of contract.

Maliciously inducing or attempting to
induce the breach of existing contracts
between competitors and their customers
by any false or deceptive means whatso-
ever, or interfering with or obstructing
the performance of any such contractual
duties or services by any such means,
with the purpose and effect of unduly
hampering, injuring, or einbarrassing

competitors in their businesses, is an un-

fair trade practice.

§ 31.2 False marking or branding.

The false marking or branding of
products of the industry with the effect of
misleading or deceiving purchasers with
respect to the quantity, quality, size,
grade, or substance of the materials pur-
chased, is an unfair trade practice.

§ 31.3 Deceptive selling methods.

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

§ 31.6 Defamation of competitors.

The defaination of competitors by
falsely imputing to them dishonorable
conduct, inability to perform contracts,
questionable credit standing, or by other
false representations, or the false dispar-
agement of the grade or quality of their
goods, with the tendency and capacity to
mislead or deceive purchasers or pro-
spective purchasers, is an unfair trade
practice.

§ 31.7 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 unrea-
sonably restrain trade is an unfair trade
practice.

§ 31.8 Commercial bribery.

Directly or indirectly to give or permit
to be given or offer to give money or any-
thing of value to agents, employees, or
representatives of customers or prospec-
tive customers or to agents, employees,
or representatives of competitors’ cus-
tomers or prospective customers, without
the knowledge of their employers or prin-

Title 16—Chapter |

cipals, as an inducement to influence
their employers or principals to purchase
or contract to purchase industry prod-
ucts from the maker of such gift or offer,
or to influence such employers or princi-
pals to refrain from dealing or contract-
ing to deal with competitors, is an
unfair trade practice.

§ 31.9 Enticing employees.

Maliciously enticing away the em-
ployees of competitors with the purpose
and effect of unduly hampering, injur-
ing, or embarrassing coinpetitors in their
business is an unfair trade practice.

§ 31.10 Fictitious prices.

Offering for sale merchandise at a
price reduced from a marked-up of fic-
titious price with the tendency and
capacity to mislead or deceive purchasers
or prospective purchasers is an unfair
trade practice.

Grotup II

§ 31.101 Publication of price lists and
terms of sale.

(a) The industry approves the prac-
tice of each individual member of the
industry independently publishing and
circulating to the purchasing trade its
own price lists.

(b) The industry approves the prac-
tice of making the terms of sale a part
of all published price schedules.

COMMITTEE ON TRADE PRACTICES

§ 31.201 Industry committee.

The provisions of § 16.1 of this sub-
chapter shall be applicable to an industry
committee established under this part.
[21 F.R. 1174, Feb. 1, 1956]

PART 32—MELAMINE DINNER-
WARE INDUSTRY

Sec.

32.0 Definitions.

Grovr I

82.1 Misrepresentation and deception in
general.

82.2 Misrepresentations as to character of
business.

32.3. Misrepresenting products as conform-
ing to standard.

32.4 Misuse of terms “close-outs,” “dis-
continued lines,” “‘special bargains,”
etc.

82.6 Substitution of products.

82.6 Deceptive use and imitation of trade

name, corporate name, trademark
etc.

196.


Title 16—Chapter |

Sec.
82.7
82.8
82.9
82.10
82.11

Deceptive invoicing.

Fictitious prices, price lists, etc.
Guaranties, warrantles, etc.

Use of lottery schemes, etc.

Prohibited forms of trade restraints

(unlawful price fixing, etc.).
Prohibited sales below cost.

Prohibited discrimination.
Lifting of stocks.
Consignment distribution.

Defamation of competitors or false
disparagement of their products.
Procurement of competitors’ confi-

dential information by unfair

means and wrongful use thereof.

Enticing away employees of com-
petitors.

Exclusive deals.

Commercial bribery.

Unlawful interference with competi-
tors’ purchases or sales.

Aiding or abetting use of unfair
trade practices.

AvurHoriry: The provislons of this Part 32
issued under secs. 6, 5, 38 Stat. 721, 719; 15
US.C. 46, 45.

Source: The provisions of this Part 32 ap-
pear at 21 F.R. 4398, June 22, 1956, unless
otherwise noted.

§ 32.0 Definitions.

(a) Members of the industry are those
persons, firms, corporations, and organ-
izations engaged in the manufacture, de-
sign, distribution, or sale of melamine
molded dinnerware.

(b) As used in the rules in this part,
the term “industry products” or “prod-
ucts of the industry” consists of dinner-
ware molded of melamine plastic
material.

82.12
82.13
82.14
82.15
$2.16

82.17

82.18

82.19
$2.20
82.21

82.22

Group I

§ 32.1 Misrepresentation and deception
in general.

It is an unfair trade practice to use, or
cause or promote the use of, any trade
promotional literature, advertising mat-
ter, guarantee, warranty, mark, brand,
label, trade name, picture, design or de-
vice, designation, or other type of oral or
written representation, however dissemi-
nated or published, or to fail to disclose
any material fact, which has the capac-
ity and tendency or effect of misleading
or deceiving purchasers or prospective
purchasers with respect to the type, kind,
grade, quality, quantity, size, weight, na-
ture, substance, durability, serviceability,
origin, preparation, production, manu-
facture, distribution, or customary or
regular price, of any product of the in-
dustry, or which has the capacity and
tendency or effect of misleading or de-

§ 32.5

ceiving the purchasing or consuming
public in any other material respect.

§ 32.2 Misrepresentations as to char-
acter of business.

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

§ 32.3 Misrepresenting products as con-
forming to standard,

In connection with the sale or offering
for sale of industry products, it is an un-
fair trade practice to represent, through
advertising or otherwise, that such prod-
ucts conform to any standards recog-
nized in or applicable to the industry
when such is not the fact.

§ 32.4 Misuse of terms “close-outs,”
discontinued lines,” “special bar-
gains,” etc.

It is an unfair trade practice to
offer for sale, sell, advertise, describe, or
otherwise represent, regular lines of in-
dustry products as “close-outs,” ‘“dis-
continued lines,” “special bargains,” or
by words or representations of similar
import, when such are not true in fact:
or to so offer for sale, sell, advertise, de-
scribe, or otherwise represent, industry
products where the capacity and tend-
ency or effect thereof is to lead the pur-
chasing or consuming public to believe
such products are being offered for sale
or sold at greatly reduced prices, or at
so-called “bargain” prices, when such is
not the fact.

§ 32.5 Substitution of products.

It is an unfair trade practice for an in-
dustry member to make an unauthorized
substitution of products, where such sub~
stitution has the capacity and tendency
or effect of misleading or deceiving the
purchasing or consuming public, by:

(a) Shipping or delivering industry
products which do not conform to sam-
ples submitted, to specifications upon
which the sale is consummated, or to
representations made prior to securing
the order, without advising the purchaser
of the substitution and obtaining his con-

197


§ 39.6

sent thereto prior to making shipment
or delivery; or

(b) Falsely representing the reason for
making a substitution.

§ 32.6 Deceptive use and imitation of
trade name, corporate name, trade-
mark, etc.

It is an unfair trade practice for
any member of the industry to use any
trade name, corporate name, trademark,
or other trade designation, which has the
capacity and tendency of effect of mis-
leading or deceiving purchasers or
prospective purchasers as to the charac-~-
ter, mame, nature, or origin of any
product of the industry, or of any ma-
terial used therein, or which is false or
misleading in any material respect.

§ 32.7 Deceptive invoicing.

Withholding from or inserting in in-
voices any statement or information by
reason of which omission or insertion a
false, inaccurate, or incomplete record is
made, which has the capacity and tend-
ency or effect of deceiving purchasers,
prospective purchasers, or the consuming
public in any material respect, is an un-
fair trade practice.

§ 32.8 Fictitious prices, price lists, etc.

The publishing or circulating by any
member of the industry of false or mis-
leading price quotations, price lists,
terms or conditions of sale, or reports
as to production or sales, with the ca-
pacity and tendency or effect of mislead-
ing or deceiving purchasers, prospective
purchasers, or the consuming public, or
the advertising, sale, or offering for sale
of industry products at prices purport-
ing to be reduced from what are in fact
fictitious prices, or at purported reduc-
tions in prices when such purported re-
ductions are in fact fictitious or are
otherwise misleading or deceptive, is an
unfair trade practice.

§ 32.9 Guarantees, warranties, etc.

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

(1) To represent that any industry
product is guaranteed unless, in close
conjunction with such representation,
the identity of the guarantor, the extent
and nature of the guarantee, and any
material conditions or limitations re-
lating to the liability of the guarantor

Title 16—Chapter !

under the guarantee, are adequately and
nondeceptively disclosed ; or

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

(3) To offer or use any guarantee
which is otherwise deceptive or unfair.

(b) This section shall be applicable
not only to guarantees but also to war-
ranties, to purported guarantees and
warranties, and to any promise or repre-
sentation in the nature of a guarantee
or warranty.

§ 32.10 Use of lottery schemes, ete.

It is an unfair trade practice to sell, dis-
tribute, or promote the sale or distribu-
tion of any industry product by means
of a game of chance, gift enterprise, or
lottery scheme.

§ 32.11 Prohihited forms of trade re-
straints (unlawful price fixing,
ete.).*

It is an unfair trade practice for any
member of the industry, either directly
or indirectly, to engage in any planned
common course of action, or to enter into
or take part in any understanding,
agreement, combination, or conspiracy,
with on2 or more members of the in-
dustry, or with any other person or per-
sons, to fix or maintain the price of any
goods or otherwise unlawfully to restrain
trade; or to use any form of threat, in-
timidation, or coercion to induce any
member of the industry or other person

1The inhibitions of this section are sub-
ject to Public Law 542, approved July 14,
1952—66 Stat. 632 (the McGuire Act) which
provides that with respect to a commodity
which bears, or the iabel or container of
which bears, the trade-mark, brand, or name
of the producer or distributor of such com-
modity and which is in free and open com-
petition with commodities of the same gen-
eral 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 re-
sold by such buyer when such contract or
agreement is iawful as applied to intrastate
transactions under the laws of the State,
Territory, or territorial jurisdiction in which
the resale is to be made or to which the
commodity ts to be transported for such re-
sale, and when such contract or agreement
is not between manufacturers, or between
wholesalers, or between brokers, or between
factors, or between retailers, or between per-
sons, firms, or corporations in competition
with each other.

198


Title 16—Chapter |

or persons to engage in any such planned
common course of action, or to become a
party to any such understanding, agree-
ment, combination, or conspiracy.

§ 32.12 Prohibited sales below 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 reasonable probability that the
effect will be, to substantially injure,
suppress, or stifle competition or tend to
create &@ monopoly, is an unfair trade
practice.

(b) This section is not to be construed
as prohibiting all sales below cost, but
only such selling below the seller’s cost
as is resorted to and pursued with the
wrongful intent or purpose referred to
and where the effect is, or where there is
a reasonable probability that the effect
will be, to substantially injure, suppress,
or stifle competition or to create a mo-
nopoly. Among the situations in which
the requisite purpose or intent would
ordinarily be lacking are cases in which
such sales were: (1) of seasonal goods
near the conclusion of the season; (2)
of obsolescent goods; (3) made under
judicial process; or (4) made in bona fide
discontinuance of business in the goods
concerned.

(c) As used in paragraphs (a) and
(b) of this section, the term ‘‘cost”
means the respective seller’s cost and not
an average cost in the industry whether
such average cost be determined by an
industry cost survey or some other
method. It consists of the total outlay
or expenditure by the seller in the ac-
quisition, production, and distribution of
the products involved, and comprises all
elements of cost such as labor, material,
depreciation, taxes (except taxes on net
income and such other taxes as are not
Properly applicable to cost), and general
overhead expenses, incurred by the seller
in the acquisition, manufacture, process-
ing, preparation for marketing, sale, and
delivery of the products. Not to be in-
cluded are dividends or interest on bor-
rowed or invested capital, or nonoperat-
ing losses, such as fire losses and iosses
from the sale or exchange of capital as-
sets. Operating cost should not be re-
duced by items of nonoperating income,
Such as income from investments, and
gain on the sale of capital assets.

(d) Nothing in this section shall be
construed as relieving an industry mem-

$ 32.13

ber from compliance with any of the re-
quirements of the Robinson-Patman Act.

§ 32.13 Prohihited discrimination.’

(a) Prohibited discriminatory prices,
rebates, refunds, discounts, credits, etc.,
which effect unlawful price discrimina-
tion. It is an unfair trade practice for
any member of the industry engaged in
commerce, in the course of such com-
merce, to grant or allow, secretly 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, effects a discrimina-
tion in price between different pur-
chasers of goods of like grade and qual-
ity, where either or any of the purchases
involved therein are in commerce, and
where the effect therof may be substan-
tially to lessen competition or tend to
create a monopoly in any line of com-
merce, or to injure, destroy, or prevent
competition with any person who either
grants or knowingly receives the benefit
of such discrimination, or with cus-
tomers 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, and are not purchased by schools,
colleges, universities, public libraries,
churches, hospitals, or charitable insti-
tutions not operated for profit, as sup-
plies for their own use;

(2) That nothing contained in this
paragraph shall prevent differentials
which make only due allowance for dif-
ferences in the cost of manufacture, sale,
or delivery resulting from the differing.
methods or quantities in which said com—
modities are to such purchasers sold or-
delivered; .

NoTE: Cost justification under the above~
proviso depends upon net savings in cost:
based on all facts relevant to the transac~

7 As 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 between any
insular possessions of 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 Dis-
trict of Columbia or any foreign nation, or
within the District of Columbia or any Terrl-
tory or any insular possession or other place
under the jurisdiction of the United States.”

199


§ 32.13

tions under the terms of subparagraph (2)
of this paragraph. For example, if a seller
regularly grants a discount based upon the
purchase of a spectfied quantity by a single
order for a single delivery, and this discount
is justified by cost differences, it does not
follow that the same discount can be cost
justified if granted to a purchaser of the
same quantity by multiple orders or for mul-
tiple deliveries,

(3) That nothing contained in this
section shali prevent persons engaged in
selling goods, wares, or merchandise in
commerce from selecting their own cus-
tomers 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 in re-
Sponse 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 com-
petitor, or the services or facilities fur-
nished by a competitor (see paragraphs
(d) and (e) of this section).

Norte: In complaint proceedings, justifica-
tion of price differentials under subpara-
graphs (2), (4) and (5) of this paragraph is a
matter of affirmative defense to be estab-
lished by the person or concern charged with
price discrimination.

(b) The following are examples of
price differential practices to be con-
sidered as subject to the prohibitions of
paragraph (a) of this section when in-
volving goods of like grade and quality
which are sold for use, consumption, or
resale within any place under the juris-
diction of the United States, and which
are not purchased by schools, colleges,
universities, public libraries, churches,
hospitals, or charitable institutions not
operated for profit, as supplies for their
own use, and when:

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

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

Title 16——Chapter |

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

(4) The price differential is not made
in response to changing conditions af-
fecting the market for or the market-
ability of the goods concerned (see
paragraph (a) (4) of this section) : and

(5) The lower price was not maae wo
meet in good faith an equally low price
of a competitor (see paragraph (a) (5)
of this section).

Example No. 1. At the end of a given
period an industry member grants a discount
to a customer equivalent to a fixed percent-
age of the total of the customer’s purchases
during such period and fails to grant such
discount to other customers under like
conditions,

Example No. 2. An industry member
sells goods to one or more of his customers
at a higher price than he charges other cus-
tomers for like merchandise. It is im-
material whether or not such discrimination
is accomplished by misrepresentation as to
the grade and quality of the products sold.

(ce) Prohibited brokerage and commis-
sions. It is an unfair trade practice for
any member of the industry engaged in
commerce, in the course of such com-
merce, to pay or grant, or to receive or
accept, anything of value as a commis-
sion, 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 in-
termediary therein where such inter-
Mediary is acting in fact for or in behalf,
or is subject to the direct or indirect
control, of any party to such transac-
tion other than the person by whom
such compensation is so granted or paid.

(d) Prohibited advertising or promo-
tional allowances, etc. It is an unfair
trade practice for any meinber of the
industry engaged in commerce to pay
or contract for the payment of advertis-
ing 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 compensa-
tion or in consideration for any services
or facilities furnished by or through such
customer in connection with the process~
ing, handling, sale, or offering for sale
of any products or cominodities manu-
factured, sold, or offered for sale by such
member, unless such payrnent or consid-
eration is available on proportionally

200


Title 16—Chapter |

equal terms to all other customers com-
peting in the distribution of such prod-
ucts or commodities.

Nore 1: Industry members giving adver-
tising allowances to competing customers
must exercise precaution and diligence in
seeing that ail of such allowances are used
in accordance with the terms of their offers.

Nore 2: When an industry member gives
allowances to competing customers for ad-
vertising in a newspaper or periodical, the
fact that a lower advertising rate for equiva-
lent space is available to one or more, but
not all, such customers, is not to be regarded
by the industry member as warranting the
retention by such customer or customers of
any portion of the allowance for his or their
personal use or benefit.

(e) Prohibited discriminatory services
or facilities. It is an unfair trade prac-
tice for any member of the industry en-
gaged in commerce to discriminate 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 fur-
nishing, or by contributing to the fur-
nishing cf, any services or facilities
connected with the processing, handling,
sale, or offering for sale of such com-
modity so purchased upon terms not
accorded to all competing purchasers on
proportionally equal terms.

(f) Clarification. The following is
presented for the purpose of ciarifying
the requirements of paragraphs (d) and
(e) of this section with respect to the
supplying of marketing services, facili-
ties or allowances by industry members
to their customers, but it is not intended
to imply by such presentation that other
methods which assure of proportional
equality of treatment of competing cus-
tomers may not also be used.

An industry member may simultane-
ously offer to each of his customers com-
peting in the resale of his products the
same kind of promotional service, facil-
ity or allowance of a cost value equal
to a uniform percentage of the sales (or
purchases) of the industry member’s
products by each customer during a spec-
lfied and identical period of time: Pro-
vided, however, That when the service,
facility or ailowance offered is of a type
which under reasonable terms and con-
ditions is not usable or suitable to the
facilities and business of all customers,
and is offered to any one customer, the
member offer each of those customers
to whom the service, facility or aliow-
ance is not usable or suitable an alter-

§ 32.13

nate type of promotional service, facility
or allowance which is of equivalent meas-
urable cost, is usable by the customer,
and is suitable to his facilities and busi-
ness, and promptly inform all competing
customers of the kind and amount of
Services, facilities or aliowances which
he has offered to each and the respec-
tive terms and conditions under which
such services, facilities or allowances
are to be furnished by the industry mem-
ber: And provided, further, That when
the offer of any service, facility or allow-
ance to any customer is conditioned on
such customer supplying some reciprocal
service, facility or payment, a reciprocal
service, facility or payment be required
in the offers to all other customers and
there be an equality of ratio among all
customers as to the measurable cost of
that which is supplied by the industry
member and the reciprocal service, facil-
ity or payment required of any customer.
The industry member must take every
reasonable precaution to see that serv-
ices, facilities or allowances which he
furnishes to customers are used in ac-
cord with the terms of his offer: and
upon failure of the customer to perforin
any obligation on his part, the industry
member must cease supplying the cus-
tomer any further service, facility or
allowance.

(g) Inducing or receiving an illegal
discrimination in price. It is an unfair
trade practice for any member of the in-
dustry 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.

Nore: This paragraph is a re-statement
of section 2 (f) of the Clayton Act as amend-
ed. In a complaint proceeding under this
section, in order to make out a prima facie
violation, the Commission must show that
the favored buyer induced or received the
lower price knowing, or knowing facts from
which he should have known, that such
price was violative of section 2 (a) of said
act and not justified under subparagraphs
(2), (4) or (5) of paragraph (a) of this sec-
tion. When, in any such proceeding, the
issue is limited to the question of whether
the price differentiai involved made only
due allowance for differences in cost of
manufacture, sale, or delivery resulting from
the differing methods or quantities in whlch
the goods were sold and delivered, the Com-
mission 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

201


§ 32.14

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
resulted in sufficient cost savings of the kind
and character specified as to justify the price
differential,

§ 32.14 Lifting of stocks.

It is an unfair trade practice for any
member of the industry to purchase the
stock of a distributor or dealer which has
been supplied by a competitor or com-
petitors when such practice is done as an
inducement to the distributor or dealer
to discontinue handling competitive
products and to handle such member’s
products exclusively, and where the ef-
fect of such act or practice may be sub-
stantially to lessen competition or tend
to create a monopoly in any line of
commerce.

§ 32.15 Consignment distribution.

(a) It is an unfair trade practice for
any member of the industry to employ
the practice of shipping industry prod-
ucts on consignment without the express
request of the purchaser.

(b) It is an unfair trade practice for
@ny member of the industry to employ
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 com-
petitors’ use of said trade outlets in get-
tmeg their products to consumers through
regular channels of distribution, thereby
injuring, destroying, or preventing com-
petition or tending to create a monopoly
or unreasonably to restrain trade.

(ec) Nothing in this section shall be
construed to authorize any understand-
ing or agreement, combination or con-
spiracy, or planned common course of
action, by and between industry mem-
bers, mutually to conform or restrict
their practice of shipping goods on con-
signment with the intent or effect of
lessening competition.

Title 16—Chapter I

§ 32.16 Defamation of competitors or
false disparagement of their
products,

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 dis-
paragement of competitors’ products in
any respect, or of their business methods,
selling prices, values, credit terms, pol-
icies, or services, is an unfair trade prac-
tice,

§ 32.17 Procuremeut of competitors’
confidential 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 mis-
leading statements or representations, 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 busi-
ness or to suppress competition or un-
reasonably restrain trade.

§ 32.18 Enticing away employees of
competitors.

It is an unfair trade practice for any
member of the industry wilfully to en-
tice away employees or sales representa-
tives of competitors with the intent and
effect of thereby unduly hampering or
injuring competitors in their business
and destroying or substantially lessening
competition: Provided, That nothing in
this section shall be construed as pro-
hibiting employees from seeking more
favorable employment, or as prohibiting
employers from hiring or offering em-
ployment to employees of competitors
in good faith and not for the purpose of
injuring, destroying, or preventing
competition.

§ 32.19 Exclusive deals.

It is an unfair trade practice for any
member of the industry to contract to
sell or sell any industry product, or fix a
price charged therefor, or discount from,
or rebate upon, such price, on the condi-
tion, agreement, or understanding that
the purchaser thereof shall not use or
deal in the products of a competitor or
competitors of such industry member,
where the effect of such sale or contract
for sale, or of such condition, agreement,
or understanding, may be substantially

202


Title 16—Chapter |

to lessen competition or tend to create
@ monopoly in any line of commerce.

§ 32.20 Commercial bribery.

it is an unfair trade practice for a
member of the industry, directly or indi-
rectly, to give, or offer to give, or permit
or cause to be given, money or anything
of value to agents, employees, or repre-
sentatives of customers or prospective
customers, or to agents, employees, or
representatives of competitors’ customers
or prospective customers, without the
knowledge of their employers or princi-
pals, as an inducement to influence their
employers or principals to purchase or
contract to purchase products manufac-
tured or sold by such industry member
or the maker of such gift or offer, or to
influence such employers or principals
to refrain from dealing in the products of
competitors or from dealing or contract-
ing to deal with competitors.

§ 32.21 Unlawful  interfereuce
competitors’ purchases or sales.

It is an unfair trade practice for any
member of the industry, by means of any
monopolistic practices or through com-
bination, conspiracy, coercion, boycott,
threats, or any other unlawful means,
directly or indirectly, to interfere with a
competitor’s right to purchase his raw
materials and supplies from whomsoever
he chooses, or to sell his product to
whomsoever he chooses.

§ 32.22 Aiding or abetting use of unfair
trade practices.

It is an unfair trade practice for any
person, firm, or corporation to aid, abet,
coerce, or induce another, directly or in-
directly, to use or promote the use of any
unfair trade practice specified in the
rules in this part.

with

PART 33—CUT STONE INDUSTRY

Group I
Sec.

33.1 Inducing breach of contract.
33.2 False marking or branding.
88.5 Sales below cost.

Group II

33.101
33.102
33.103
33.104
33.105
33.106
33.107

Cost accounting.
Publication of terms of sale.
Publication of price lists.
Arbitration.

Standard form of contract.
Definitions.

Industry standards.

§ 33.103

COMMITTEE ON TRADE PRACTICES
Sec.
83.201 Industry committee.

AuTHOoRry: The provisions of this Part 33
issued under secs. 6(g), 5, 88 Stat. 722, 719;
15 U.S.C. 46(g), 45.

Source: The provisions of this Part 38 con-
tained in trade practice rules, Cut Stone In-
dustry, FTC, Aug. 18, 1931, unless otherwise
noted.

Group I

§ 33.1 Inducing breach of contract.

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

§ 33.2 False marking or branding.

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

§ 33.5 Sales below cost.

The selling of goods below cost with
the intent and with the effect of injur-
ing a competitor and where the effect
may be to substantially lessen competi-
tion or tend to create a monopoly or to
unreasonably restrain trade is an unfair
trade practice.

Grovp IT
§ 33.101 Cost accounting.

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

§ 33.102 Publication of terms of sale.

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

§ 33.103 Publication of price lists.

The industry approves the practice of
each individual member of the industry
independently publishing and circulating
to the purchasing trade its own price
lists.

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