Manifold Business Forms Industry

16 CFR Part 47 · Trade practice rules · in the Code of Federal Regulations 1960-1977 (11 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1977 CFR · Earliest edition: 1960 CFR

Text (1977 edition, OCR)

Chapter !—Federal

goods, wares, or merchandise, either to
the other party to such transaction or to
an agent, representative, or other inter-
mediary therein where such interme-
diary is acting in fact for or in behalf,
or is subject to the direct or indirect
control, of any party to such transaction
other than the person by whom such
compensation is so granted or paid.

(a) 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 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 commodities manu-
factured, sold, or offered for sale by such
member, unless such payment or consid-
eration is available on proportionally
equal terms to all other customers com-
peting in the distribution of such prod-
ucts or commodities.

Nore 1: Industry members giving allow~
ances for advertising or sales promotion
must, in addition to according same to ail
competing customers on proportionally
equal terms, exercise precaution and dili-
gence in seeing that all such allowances are
used by the customers for such purpose.
Customers receiving such allowances must
not use same for any other purpose.

When an allowance is made ostensiby
for advertising or sales promotion of prod-
ucts and is not in fact used for that pur-
pose the practice may constitute a price
‘discrimination. In such case, the party
giving the allowance may violate paragraph
(a) of this section and the party receiving
same may violate paragraph (f) of this
section.

Note 2: When an industry member gives
allowances to competing customers for ad-
vertising in & newspaper or periodical, the
tact 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
wetention by such customer or customers of
any portion of the allowance for his or their
‘personal use or benefit.

(e) Prohibited ‘discriminatory services
‘of 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
@urchaser or purchasers of a commodity

Trade Commission § 46.19
bought for resale, with or without proc-
essing, by contracting to furnish or
furnishing, or by contributing to the
furnishing of, any services or facilities
connected with the processing, handiing,
sale, or offering for sale of such com-
modity so purchased upon terms not ac-
corded to all competing purchasers on
proportionally equal terms.

Nore 1: See subsection (b) of section 2 of
the Clayton Act, as amended, which is set
forth in Note 1 to subparagraph (5) of para-
graph (a) of this section.

Note 2: Among the practices inhibited by
section V of this rule is that of an industry
member according to one or more customers
the privilege of returning for credit or re-
fund any or all of the goods purchased by
them and failing to accord the same privi-
lege to another or other competing customers
on proportionally equal terms. In this con-
nection see also Note 2 under cost justifica-
tion proviso (2) (subparagraph (2) of para-
graph (a) of this section.)

(f) 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 rule.

Nore: Section 46.18 is based on the pro-
visions of section 2 of the Clayton Act as
amended by the Robinson-Patman Act.

§ 46.19 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 foregoing sections.

PART 47—MANIFOLD BUSINESS
FORMS INDUSTRY

Sec.

47.0 The industry and its products defined.

47.1 Deception (general).

472 Substitution of products.

473 Defamation of competitors or false
disparagement of thelr products.

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

47.6 Commercial bribery.

47.6 Misrepresenting products as conform-
ing to standard.

47.7 Enticing away employees of competi-
tors.

47.8 | Misrepresentation as to character of
business.

393


§ 47.0

Sec.

479 Prohibited forms of trade restraints
(unlawful price fixing, eto.).

Prohibited sales below cost.

False invoicing.

False and misleading price quotations,
etc.

Coercing purchase of one product as
@ prerequisite to the purchase of
other products.

Exclusive deals.

Inducing breach of contract.

Unfair threats of infringement suits.

Prohibited discrimination.

Aiding or abetting use of unfair trade
practices.

AvUTHORITY: The provisions of this Part 47
issued under secs. 6, 6, 38 Stat. 721, 719;
16 US.C. 46, 45, unless otherwise noted.

Source: The provisions of this Part 47

appear at 24 F.R. 5293, June 30, 1959, unless
otherwise noted.

§ 47.0 The industry and its products
defined.

The Manifold Business Forms Industry
consists of manufacturers, jobbers,
wholesalers, and other marketers of busi-
ness forms. Such business forms in-
clude, but are not limited to, (a) auto-
graphic register forms, (b) unit set
forms, (c) continuous forms, (d) sales-
books, (e) fanfold forms, and (f) ma-
chine bookkeeping forms.

§ 47.1 Deception (general).

It is an unfair trade practice to sell,
offer for sale, or distribute industry prod-
ucts by any method, or under any repre-
sentation, description, circumstance or
condition, which has the capacity and
tendency or effect of deceiving purchas-
ers or prospective purchasers as to quan-
tity, quality, size, grade, kind, type,
cut, length, width, thickness, weight,
strength, substance, composition, condi-
tion, color, price, origin, finish, fold,
punch, perforation, durability, service-
ability, use, manufacture, or distribution
of any product of the industry or com-
ponent part of such product, or in any
other material respect. -

§ 47.2 Substitution of products.

It is an unfair trade practice for a
member of the industry to make an un-
authorized substitution of products,
where such substitution has the capacity
and tendency or effect of misleading or
deceiving purchasers or prospective pur-

(a) Shipping or delivering industry
products which do not conform to sam-
ples submitted, to specifications upon

47.10
47.11
47.12

47.13

47,14
47.16
47.16
47.17
47.18

Title 146—Commerciai Practices

which the sale is consummated, or to
representations made prior to securing
the order, without advising the purchaser
of the substitution and obtaining his
consent thereto prior to making ship-
ment or delivery; or

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

§ 47.3 Defamation of competitors or
false disparagement of their prod-
ucts.

(a) 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, poli-
cles, or services, is an unfair trade
practice.

(b) Likewise, the deliberate tampering
with, damaging, or destroying of com-
petitors’ products so as to disparage the
products in the eyes of customers or
prospective customers, is an unfair trade
practice.

(c) Nothing in paragraphs (a) and
(b) of this section shall be construed as
preventing the full, fair, and nondecep-
tive comparison, by demonstration or
otherwise, of competitors’ products with
the product of another mdustry member
before public officials or other purchas-
ets or prospective purchasers.

§ 47.4 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 infor-
mation concerning the business of a com-~
petitor 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 so as sub-
stantially to injure competition or un-
reasonably restrain trade. :

§ 47.5 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 per-
mit or cause to be given 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’ custom-
ers or prospective customers, without the

394


Chapter I—Federal Trade Commission

knowledge of thelr employers or prin-
cipals, as an inducement to influence
their employers or principals to pur-
chase or contract to purchase products
imported, manufactured, or sold by such
industry member or the maker of such
gift or offer or to influence such em-
ployers or principals to refrain from
dealing in the products of competitors, or
from dealing or contracting to deal with
competitors.

§ 47.6 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.

§ 47.7 Enticing away employees of com-
petitors.

It is an unfair trade practice for any
member of the industry wilfully to en-
tice away employees or sales-contact
personnel of competitors with the intent
and effect of thereby unduly hampering
or injuring competitors in their business
and destroying or substantially lessen-
ing competition; Provided, That nothing
in this section shall be construed as pro-
hibiting such persons from seeking more
favorable employment, or as prohibiting
employers from hiring or offering em-
ployment to employees of a competitor
in good faith and not for the purpose of
inflicting injury on such competitor.

§ 47.8 Misrepresentation as to character
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 indus-
try 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
character, extent, volume, or type of his
business,

§ 47.9 Prohibited forms of trade re-
straints (unlawful price fixing, etc.).'

It is an unfair trade practice for any
member of the industry, either directly

1 The inhibitions of this section are subject
to Public Law 6542, approved July 14, 1952,
66 Stat. 632 (the McGuire Act) which pro-

§ 47.10

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 one or more members of the indus-
try, 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, in-
timidation, 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
@ party to any such understanding,
agreement, combination, or conspiracy.

§ 47.10 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 pur-
pose or intent, and where the effect is, or
where there is a reasonable probability
that the effect will be, to substantially in-
jure, suppress, or stifie competition or
tend to create a 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 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)

vides that with respect to a commodity which
bears, or the label or container of which
bears, the trademark, brand, or name of the
producer, or distributor of such commodity
and which is tn free and open competitlon
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 es-
tablishes a minimum or stipulated price at
which such commodity may be resold by
such buyer when such contract or agree-
ment is lawful as appHed to intrastate trans-
actions under the laws of the State, Terri-
tory, or territorial jurisdiction in which the
resale ls to be made or to which the com-
modity is to be transported for such resale,
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,

395


§ 47.11

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 aver-
age cost in the industry whether such av-
erage cost be determined by an industry
cost survey or some other method. It
consists of the total outlay or expendi-
ture by the seller in the acquisition, pro-
duction, 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 ap-
plicable to cost), and general overhead
expenses, incurred by the seller in the
acquisition, manufacture, processing,
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 losses
from the sale or exchange of capital as-
sets. Operating cost should not be re-
duced by items of non-operating 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-
ber from compliance with any of the re-
quirements of the Robinson-Patman Act.

§ 47.11 False invoicing.

Withholding from or inserting in in-
voices or sales slips any statements or in-
formation by reason of which omission
or insertion a false record is made, wholly
or in part, of the transactions repre-
sented on the face of such invoices or
sales slips, with the capacity and tend-
ency or effect of thereby misleading or
deceiving purchasers, prospective pur-
chasers, or the consuming public, is an
unfair trade practice.

§ 47.12 False and misleading price quo-
tations, etc.

It is an unfair trade practice for any
industry member, in the course of or in
connection with the offering for sale,
sale, or distribution of industry products,
to publish or circulate to or among pur-
chasers or prospectvie purchasers false
price quotations, price lists, or terms or
conditions of sale; or to publish, or circu-
late among purchasers or prospective
purchasers, any price quotations, price
lists, or terms or conditions of sale which
have the capacity and tendency or effect

Title 16—Commercial Practices

of thereby misleading or deceiving pur-
chasers or prospective purchasers in any
material respect.

§ 47.13 Coercing purchase of one prod-
uct as a prerequisite to the purchase
of other products.

The practice of coercing the purchase
of one or more products as a prerequisite
to the purchase of one or more other
products, where the effect may be to sub-
stantially lessen competition or tend to
create a monopoly or to unreasonably
restrain trade, is an unfair trade

practice.

§ 47.14 Exclusive deals.

It is an unfair trade practice for any
member of the industry to contract to
sell or sell any industry product, or to fix
a price charged therefor, or discount
from, or rebate upon, such price, on the
condition, 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 such condition, agreement, or
understanding, may be substantially to
fessen competition or tend to create a
monopoly in any line of commerce,

§ 47.15 Inducing breach of contract.

(a) Knowingly inducing or attempting
to induce the breach of existing lawful
contracts between competitors and their
customers or their suppliers, or inter-
fering with or obstructing the perform-
ance of any such contractual duties or
services, under any circumstances having
the capacity and tendency or effect of
substantially injuring or lessening pres-
ent or potential competition, is an unfair
trade practice.

(b) Nothing in this section is intended
to imply that it is improper for any
industry member to solicit the business
of a customer of a competing industry
member; nor is the section to be con-
strued as in anywise authorizing any
agreement, understanding, or 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.

§ 47.16 Unfair threats of infringement
suits.
The circulation of threats of suit for
infringement of patents or trademarks
among customers or prospective cus-

396


Chapter I—Federal Trade Commission

tomers of competitors, not made in good
faith but for the purpose and with the
effect of harassing or intimidating such
customers or prospective customers, or
of unduly hampering, injuring, or preju-
dicing competitors in their business, is
an unfair trade practice.

§ 47.17 Prohibited 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, re-
fund, discount, credit, or other form of
price differential, effects a discrimina-
tion in price between different pur-
chasers 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 sub-
stantially 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 customers
of either of them: Provided, however,

(1) That the goods involved in any
such transactlon 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, and charitable in-
stitutions not operated for profit, as sup-
plies for heir own use;

Norse: Purchases by U.S. Government: In
an opinion submitted to the Secretary of
War under date of December 26, 1936, the U.S.
Attorney General advised that the Robin-
son-Patman Antidiscrimination Act’ is not
applicable to Government contracts for sup-
plies.” (38 Opinions, Attorney General 539.)

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
Territery of the United States and any State,
Territory, or foreign nation, or between any
insular possessions or other places under the
jurisdiction of the United States, or between
any such possessions 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 Terri-
tory or any insular possession or other place
under the jurisdiction of the United States.”

§ 47.17

(2) That nothing contained in this
paragraph shall prevent differentials
which make only due allowance for dif-
ferences in the cost of manufacture,
saie, or delivery resulting from the dif-
fering methods or quantities in which
such commodities are to such purchasers
sold or delivered;

Nore: 1. Cost justification to be based on
net savings in manufacture, sale or delivery:
Cost justification under the above proviso
depends upon net savings in cost based on all
facts revelant to the transactions under the
terms of subparagraph (2) of this paragraph.
For example, if a seller reguiarly grants a
discount based upon the purchase of a speci~
fied quantity by a single order for a single
delivery, and this discount is justified dy
cost differences, it does not follow that the
same discount can be cost justified if granted
to a purchaser of the same quantity by mul-
tiple orders or for multiple deliveries.

Nore: 2. Credit or refund for return :
In determining whether a price differential
based on cost savings under the above pro-
viso is warranted there shali be taken into
account any portion of the goods involved
which are returned by the customer-pur-
chaser to the seller for credit or refund. See
also Note 2 under paragraph (e) of this
section.

(3) That nothing contained in this
section shall 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 busi-
ness 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.

Note 1: Subsection (b) of section 2 of the
Clayton Act, as amended, reads as follows:

Upon proof being made, at any hearing on
a complaint under this section, that there has
been discrimination in price or services or
facilities furnished, the burden of rebutting
the prima facile case thus made by showing
justification shall be upon the person charged
with a violation of this section, and unless
justification shall be affirmatively shown, the
Commission is authorized to issue an order
terminating the discrimination: Provided,
however, That nothing herein contained shall

397


$47.17

prevent a seller rebutting the prima facie
case thus made by showing that his lower
price or the furnishing of services or facili-
ties to any purchaser or purchasers was made
in good faith to meet an equally low price of
@ competitor, or the services or facilities fur-
nished by a competitor.

Notre 2: In complaint proceedings, justi-
fication of price differentials under subpara-
graphs (2), (4), and (5) of this paragraph is
@ matter of affirmative defense to be estab-
shed by the person or concern charged with
price discrimination,

(b) Examples. The following are ex-
amples of price differential practices to
be considered as subject to the prohi-
bitions of paragraph (a) of this section
when involving goods of like grade and
quality which are sold for use, consump-
tion, or resale within any place under the
jurisdiction of the United States, and
which are not purchased by schools,
colleges, universities, public libraries,
churches, hospitals, and charitable in-
stitutions not operated for profit, as sup-
plies for their own use," and when:

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

(2) The price differential has a rea-
sonable probability of substantially less-
ening competition or tending to create
a monopoly in any line of commerce, or
of injuring, destroying, or preventing
competition with the industry member or
with the customer receiving the benefit
of the price differential, or with cus-
tomers of either of them; and

(3) The price differential is not justi-
fled by cost savings (see subparagraph
@) of paragraph (a) of this section);
an

(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 sub-
paragraph (4) of paragraph (a) of this
section); and

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

Erample 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 falls to grant such
discount to other customers under iike
conditions.

4See also Note under paragraph (a) (1) of
this section,

Title 16—-Commercial Practices

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

Example No. 3. Terms of 2/10th prox. are
granted by an industry member to some cus-
tomers on goods purchased by them from the
industry member. Another customer or cus-
tomers are, nevertheless, allowed to take a
5 percent instead of a 2 percent discount
when making payment to the industry mem-
ber within the time prescribed.

Example No, 4. An industry member sells
goods to one or more of his customers at a
lower price than he charges other customers
therefor, basing his justification for the price
difference solely on the fact that the goods
sold at the lower price bear the private brand
name of customers.

Example No, 5. An industry member in-
voices goods to all his customers at the same
price but supplies additional quantities of
such goods at no extra charge to one or
more, but not to all, such customers; or
supplies other goods or premiums to one or
more, but not to all, such customers for
which he makes no extra charge and which
effects an actual price difference in favor
of certain of his customers.

Example No. 6. An industry member sells
goods to one or more of his customers at a
higher price than he charges other customers
for like merchandise. It is immaterial
whether the goods sold at the lower price are
classified by the industry member as “‘sec-
onds,” “secondary line,” “rejects,” or are
otherwise represented by the Industry mem-
ber as inferior, if the goods are in fact of
like grade and quality as the goods sold
at the higher price.

Nore: As previously indicated, the fore-
going are examples of practices to be con-
sidered violative of the prohibitions of para-
graph (a) of this section when involving
goods of like grade and quality and when
not subject to the other exemptions, exclu-
sions, or defenses set forth in this paragraph.

(c) Prohibited brokerage and com-
missions. 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 Ieu
thereof, except for service 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 inter-
mediary therein where such intermedi-
ary is acting in fact for or in behalf, or
is subject to the direct or indirect con-
trol, of any party to such transaction

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Chapter I—Federal Trade Commissien

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

(a) Prohibited advertising or promo-
tional allowances, etc. It is an unfair
trade practice for any member to pay or
trade practice for any member of the
industry engaged in commerce to pay or
contract for the payment of advertising
or promotional allowances or any other
thing of vaiue 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 facili-
ties furnished by or through such cus-
tomer in connection with the processing,
handling, sale, or offering for sale of any
products or commodities manufactured,
sold, or offered for sale by such member,
unless such payment or consideration is
available on proportionally equal terms
to all other customers competing in the
distribution of such products or com-
modities.

Norz 1: Industry members giving allow-
ances for advertising or sales promotion
must, in addition to according same to all
competing customers on proportionally equal
terms, exercise precaution and diligence in
seeing that all such allowances are used by
the customers for such purpose. Customers
receiving such allowances must not use same
for any other purpose.

When an allowance is made ostensibly for
advertising or sales promotion of products
and is not in fact used for that purpose the
practice may constitute a price discrimina-
tion. In such case, the party giving the al-
lowance may violate paragraph (a) of this
section and the party receiving same may
violate paragraph (f) of this section.

Note 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 ts 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 of, any services or facilities con-
nected with the processing, handling,
sale, or offering for sale of such com-
modity so purchased upon terms not

§ 47.18

accorded to all competing purchasers on
proportionally equal terms.

NoTE 1: See subsection (b) of section 2 of
the Clayton Act, as amended, which is set
forth in Note 1 to subparagraph (5) of para-
graph (a) of this section.

Note 2: Among the practices inhibited by
paragraph (e) of this section is that of an
industry member according to one or more
customers the privilege of returning for
credit or refund any or all of the goods pur-
chased by them and failing to accord the
same privilege to another or other competing
customers on proportionally equal terms,
in this connection see Note 2 under cost
justification proviso (2) (subparagraph (2)
of paragraph (a) of this section).

(f) 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.

Nore: Section 47.17 is based on the provi-
slons of section 2 of the Clayton Act as
amended by the Robinson-Patman Act.

§ 47.18 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 this
part.

PART 48—TIRE AND TUBE REPAIR
MATERIAL INDUSTRY

Sec.
48.0 The industry and its products defined.
Group I

48.1 Misrepresentation and deception in
general.

48.2 Imitation or simulation of trade-
marks, trade names, etc.

48.3 Inducing breach of contract.

48.4 Commercial bribery.

48.56 Defamation of competitors or false

disparagement of their products.

48.6 False invoicing.

48.7. Prohibited forms of trade restraints

(unlawful price fixing, etc.).

48.8 False and misleading price quotations,

etc.

48.9 Prohibited sales below cost.

48.10 Exclusive deals.

48.11 Coercing purchase of one product as a
prerequisite to the purchase of
other products.

48.12 Deception by means of “bogus inde-
pendents.”

48.138 Prohibited discrimination.

399