Kosher Food Products And Kosher Products Industry
16 CFR Part 65 · Trade practice rules · in the Code of Federal Regulations 1966-1976 (10 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1976 CFR · Earliest edition: 1966 CFR
Text (1976 edition, OCR)
§ 64.109
petent bidders to estimate accurately
the amount of material and labor
required.
(ad) Invited bidders, provided they
actually submit bids, should not be re-
quired to pay for the use of plans and
specifications.
(e) A reasonable time shouid be
allowed for preparation of estimates.
§ 64.109 Identical information to all
bidders.
Where a bidder requests an interpreta-
tion of some feature of the specifications
from the buyer or his representative be-
fore submitting his bid, which would ma-
terially affect the cost of the work the
same information should be submitted
to all other bidders by the buyer or his
representative.
§ 64.110 Publication of price lists and
terms of sale.
(a) The industry approves the prac-
tice of each individual member of the
industry and independently publishing
and circulating to the purchasing trade
its own price lists.
(b) The industry approves the prac-
tice of making the terms of saie a part
of all published price schedules.
§ 64.111 Definition.
The industry hereby records its ap-
proval of the definition of a qualified
wholesale distributor to be one whose
principal business is selling to the retail
distributor.
§ 64.112 Cost accounting.
It is the judgment of this industry
that an accurate knowledge of cost is
indispensable to intelligent and fair com-
petition, and the adoption of accurate
methods of cost finding and estimating
is recommended by the industry.
§ 64.113 Arbitration.
The industry approves the practice of
handling disputes in a fair and reasona-
ble manner, coupled with a spirit of mod-
eration and good will, and every effort
should be made by the disputants
themselves to arrive at an agreement. If
unable to do so they should agree, if
possible, upon arbitration under some one
of the prevailing codes.
ComMITTEE ON TRADE PRACTICES
§ 64.201 Industry committee.
The provisions of § 16.1 of this sub-
chapter shall be applicable to an industry
committee established under this part.
[21 FR. 1174, Feb. 21, 1986)
Title 16—Commercial Practices
PART 65—KOSHER FOOD PRODUCTS
AND KOSHER PRODUCTS INDUSTRY
Sec.
65.0 Definitions.
65.1 Prohibited discrimination.
65.2 Exclusive dealing.
65.3 Push money.
65.4 Fictitious prices.
65.56 False invoicing.
65.6 Coercing purchase of one product as
& prerequisite to the purchase of
other products.
65.7 Misrepresentation in general.
65.8 Defamation of competitors or false
disparagement of their products.
65.9 Deceptive use or imitation or simula-
tion of trade or corporate names,
trade-marks, etc.
65.10 Enticing away employees of competi-
tors.
65.11 Substitution of products.
65.12 Inducing breach of contract.
65.13 Use of gift enterprise or lottery
schemes.
65.14 Prohibited forms of trade restraints
(unlawful price fixing, etc.).
65.15 Use of the word “‘free.”
65.16 Misrepresenting products as conform-
ing to standards.
65.17 Procurement of competitors’ confiden-
tial information.
65.18 Aiding or abetting use of unfair trade
practices,
AvrTHoriTy: The provisions of this Part 65
issued under secs. 6, 5, 38 Stat. 721, 719; 15
U.S.C. 46, 45, unless otherwise noted.
Sovrce: The provisions of this Part 65
appear at 27 F.R. 9250, Aug. 19, 1962, unless
otherwise noted.
§ 65.0 Definitions.
(a) Member of the industry: Any per-
sons, firms, corporations, or organiza-
tions, including manufacturers, whole-
salers, jobbers, distributors, importers
and retailers, engaged in the sale, offer-
ing for sale, or distribution, in commerce,
of industry products as defined in this
part.
(b) Industry products: Products of
the industry are any kosher food prod-
ucts or nonfocd products which ‘are
represented in any manner as having
been prepared in accordance with ortho-
dox Hebrew religious requirements.
Such representations include the use of
the word “kosher” in any language, and
the use of the six-pointed star or other
symbol or representation of similar
implication.
(c) Not mcluded as products of the
industry are meat and meat products
and poultry and poultry products.
464
Chapter I—Federal Trade Commission
§ 65.1 Prohibited discrimination.
(a) Prohibited discriminatory prices,
rebates, discounts, etc. It is an unfair
trade practice for any member of the
industry engaged in commerce, in the
course of such commerce, to grant or
allow, secretly or openly, directly or in-
directly, 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 discrimination in price he-
tween different purchasers of goods of
like grade and quality, where either or
any of the purchases involved therein
are in commerce, and where the effect
thereof may be substantially to lessen
competition or tend to create a monopoly
in any Ine of commerce, or to injure,
destroy, or prevent competition with any
person who either grants or knowingly
receives the benefit of such discrimina-
tion, or with customers of either of
them: Provided, however:
(1) That the goods involved in any
such transaction are sold for use, con-
sumption, or resale within any place
under the jurisdiction of the United
States, and are not purchased by schools,
colleges, universities, public libraries.
churches, hospitals, and charitabie in-
stitutions not operated for profit, as
supplies for their own use;
(2) That nothing contained in this
paragraph shali prevent differentials
which make only due allowance for dif-
ferences in the cost of manufacture,
sale, or delivery resulting from the dif-
fering methods or quantities in which
such commodities are to such purchasers
sold or delivered:
Note 1: Cost justification to be besed on
net savings in cost of manufacture, sale, or
delivery. Cost justification under the above
proviso depends upon net savings in cost
based on all facts relevant to the transac-
tions under the terms of subparagraph (2)
of this paragraph. For example, if a seller
regularly grants a discount based upcn the
purchase of a specified 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
multiple deliveries.
Nore 2: Credit or refund for returned
goods. In determining whether a price dif-
ferential based on cost savings under the
above proviso is warranted there shall be
taken into account any portion of the goods
involved which are returned by the
customer-purchaser to the seller for credit
$65.1
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 lim-
ited to obsolescence of seasonal goods,
actual or imminent deterioration of
perishable goods, distress sales under
court process, or sales in good faith in
discontinuance of business in the goods
concerned:
(5) That nothing contained in this
section shall prevent the meeting in good
faith of an equally low price of a com-
petitor:
Norz#: Subsection (b) of section 2 of the
Clayton Act, as amended, reads as follows:
“Upon proof being made at any hearing on
& complaint under this Section, that there
has been discrimination in price or service
or facilities furnished, the burden of rebut-
ting the prima facie case thus made by
showing justification shall be upon the per-
son charged iwth a violation of this section
and unless justification shall be affirma-
tively shown, the Commission is authorized
to issue an order terminating the discrim-
ination; Provided, however, That nothing
herein contained shall prevent a seller re-
butting the prima facie case thus made by
showing that his lower price or the furnish-
ing of services or facilities to any purchaser
or purchasers was made in good faith to
meet an equally low price of a competitor,
or the services or facililties furnished by a
competitor.”
Nore 2: In complaint proceedings, jJustifi-
cation of price differentials under subpara-
graphs (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) Examples of prohibited price dif-
ferential practices. The following are
examples of price differential practices
to be considered as subject to the pro-
hibitions of paragraph (a) of this sec-
tion when involving goods of like grade
and quality which are sold for use, con-
sumption, or resale within any place
under the jurisdiction of the United
States, and which are not purchased
by schools, colleges, universities, pub-
lic libraries, churches, hospitals, and
charitable institutions not operated for
465
$65.1
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 rea-
sonable probability of substantially
lessening competition or tending to
create a monopoly in any line of com-
merce, or of injuring, destroying, or
preventing competition with the industry
member or with the customer receiving
the benefit of the price differential, or
with customers of either of thein; and
(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 para-
graph (a) (4) of this section); and
(5) The lower price was not made to
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 pe-
riod an industry member grants a discount to
a customer equivalent to a fixed percentage
of the total of the customer’s purchases dur-
ing such period ‘and fails to grant the dis-
count to other customers under like con-
ditions.
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. An industry member makes
a sale of industry products to a purchaser
under an arrangement whereby the products
are shipped by the industry member's sup-
plier directly to such purchaser and charges
a lower price than that charged other pur-
chasers under similar circumstances, or a
price which, when compared with the price
charged purchasers on sales made out of the
stock of the industry member, constitutes -
a@ discount greater than can be justified by
the difference in costs resulting from the
differing quantities or method of sale or
delivery.
Example No. 4. An Industry member seils
to some customers industry products at
prices of drop shipments when in fact such
transactions are out-of-stock sales which are
made to other customers at higher prices,
even though the quantities involved are large
enough to be delivered on a direct shipment
basis. (As here used an “out-of-stock” sale
is one from the industry member's stock on
hand and a “drop shipment” sale is one
in which the industry member arranges to
have the goods shipped by the industry mem-
Title 16—-Commercial Practices
ber’s supplier directly to the industry mem-
ber’s customer.)
Example No. 5. Terms of 2/10th prox.
are granted by an industry member to some
customers on goods purchased by them from
the industry member. Another customer cr
customers are, nevertheless, allowed t> take
a 5 percent instead of a 2 percent discount
when making payment to the industry mem-
ber within the time prescribed.
(ec) 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 .
any agent, representative, or other inter-
mediary therein where such intermediary
is acting in fact for or in behalf, or is
subject to the direct or indirect control,
of any other party to such transaction
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 member of the
industry engaged in commerce to pay or
contract for the payment of advertising
or promotional allowances or any other
thing of value to or for the benefit of a
customer of such member in the course
of such commerce as compensation or in
consideration for any services or 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 menufac-
tured, sold, or offered for sale by such
member, unless such payment or con-
sideration is made known to and is avail-
able on proportionally equal terms to all
other customers competing in the distri-
bution of such products or cominodities.
Note 1: Industry members giving allow-
ances for advertising or sales promotion must,
in addition to according same to all com-
peting 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 {fs 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
466
Chapter |—Federal Trade Commission
section and the party receiving same may
violate paragraph (f) of this section.
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 re-
tention by such 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
purchaser or purchasers of a commodity
bought for resale, with or without proc-
essing, by contracting to furnish or
furnishing, or by contributing to the
furnishing of, any services or facilities
connected with the processing, handling,
sale, or offering for sale of such com-
modity so purchased upon terms not ac-
corded to all competing purchasers on
proportionally equal terms.
Note 1: Subsection (b) of section 2 of the
Clayton Act, as amended, which ts set forth
in the note concluding paragraph (a) of this
section is applicable to paragraph (e) of this
section.
Nore 2: Among the practices prohibited
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 falling to accord the
same privilege to another or other competing
customers on proportionally equal terms. In
this connection see also Note 2 under cost
justification proviso paragraph (a) (2) of this
section.
(f) Inducing or receiving an illegal
discrimination in price, advertising, or
promotional allowances, or services or
facilities. It is an unfair trade practice
for any member of the industry engaged
in commerce, in the course of such com-
merce, knowingly to induce or receive a
discrimination in price, advertising or
promotional allowances, or services or
facilities, prohibited by the foregoing
provisions of this section.
Note: Paragraph (f) of this section is a
restatement of section 2(f) of the Clayton
Act as amended. 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 re-
ceived the lower price knowing, or knowing
facts from which he should have known,
that such price was violative of section 2(a)
of said Act and not justified under paragraph
(a) (2), (4), or (5) of this section. When,
§ 65.3
in any such proceeding, the issue is Iimited
to the question of whether the price differ-
ential involved made only due allowance for
differences in cost of manufacture, sale, or
delivery resuiting from the differing meth-
ous, or quantities in which the goods were
sold and delivered, the Commisslon may es-
tablish a prima facie case in a number of
ways, including:
1. By showing that the buyer paying the
lower price knew that the methods by, and
quantities in, which the goods were sold and
delivered to him by the seller were the same
as in the case of the competing buyer or buy-
ers 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 selier
to the buyer than in the case of the compet-
ing buyer or buyers paying the higher price
or prices, that the buyer paying the lower
price or prices knew the nature and extent
of such differences and knew or should have
known that they could not have resulted in
sufficient cost savings of the kind and char-
acter specified as to justify the price differ-
ential.
[Rule 1]
§ 65.2 Exclusive dealing.
(a) It is an unfair trade practice for
any member of the industry engaged in
commerce, in the course of such com-
merce, to lease or make a sale or contract
for sale of any industry product, for use,
consumption, or resale within any place
under the jurisdiction of the United
States, or fix a price charged therefor,
or discount from, or rebate upon, such
price, on the condition, agreement, or
understanding that the lessee or pur-
chaser thereof shall not use or deal in
the goods of a competitor or competitors
of the lessor or seller, where the effect of
such lease, sale, or contract for sale, or
such condition, agreement, or under-
standing, may be to substantially lessen
competition or tend to create a monopoly
in any line of commerce. [Rule 2]
§ 65.3. Push money.
It is an unfair trade practice for an
industry member to pay or contract to
pay anything of value to a salesperson
employed by a customer of the industry
member, as compensation for, or as an
inducement to obtain, special or greater
effort or service on the part of the sales-
person in promoting the resale of prod-
ucts supplied by the industry member to
the customer:
(a) When the agreement or under-
standing under which the payment or
payments are made or are to be made is
without the knowledge and consent of the
salesperson’s employer; or
467
$ 65.4
(b) When the terms and conditions of
the agreement or understanding are such
that any benefit to the salesperson or
customer is dependent on lottery; or
(c) When any provision of the agree-
ment or understanding requires or con-
templates practices or a course of con-
duct unduly and intentionally hamper-
ing sale of products of competitors of an
industry meinber; or
(d) When, because of the terms and
conditions of the understanding or
agreement, including its duration, or the
attendant circumstances, the effect may
be to substantially lessen competition or
tend to create a monopoly; or
(e) When similar payments are not
accorded to salespersons of competing
customers on proportionally equal terms
in compliance with section 2 (d) and (e)
of the Clayton Act.
Nore: Payments made by an industry mem-~
‘ber to a salesperson of a customer under any
agreement or understanding that all or any
part of such payments is to be transferred by
the salesperson to the customer, or is to re~
sult in a corresponding decrease in the sales-
person’s salary, are not to be considered with-
in the purview of this section, but are to be
considered as subject to the requirements
ane provisions of section 2(a) of the Clayton
[Rule 3]
§ 65.4 Fictitious prices.
It is an unfair trade practice to sell or
offer for sale industry products at prices
purported to be reduced from what are
in fact fictitious prices, or to sell or offer
for sale such products at a purported
reduction in price when such purported
reduction is in fact fictitious or is other-
wise misleading or deceptive. [Rule 4]
§ 65.5 False invoicing.
Withholding from or inserting in in-
voices or gales slips by an industry mem-
ber, any statement or information by
reason of which omission or insertion a
false record is made, wholly or in part,
of the transactions represented on the
face of such invoices or sales slips, used
with the capacity and tendency or effect
of thereby misleading or deceiving pur-
chasers, prospective purchasers, or the
consuming public, in any material re-
spect, is an unfair trade practice. [Rule
}
§ 65.6 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 2 prerequisite
Title 16—Commercial Practices
to the purchase of one or more other
products, where the effect may be sub-
stantially to lessen competition or tend
to create a monopoly or unreasonably to
restrain trade, is an unfair trade prac-
tice. {Rule 6]
§ 65.7 Misrepresentation in general.
It ts an unfair trade practice for any
industry member to make or cause to be
made, directly or mdirectly, in newspaper
or periodical advertisements, sales pro-
motional literature, by television, radio,
or in connection with any demonstration
or course of Instruction or otherwise, any
statement or representation, however
published, whlch has the capacity and
tendency or effect of misleading or de-
ceiving purchasers or prospective pur-
chasers:
(a) With respect to the identity of any
product of the industry or its manufac-
ture, distribution, or marketing;
(b) With respect to the brand, com-
position, grade, quality, quantity, or size
of any product of the industry;
(c) With respect to the availabllity
of the supply of a particular product or
products of the industry;
(ad) In any other material respect.
Nore: Among the prohibtions of this sec~
tion is “false advertisement,” as defined in
section 15 of the Federal Trade Commission
Act, of any “food” or other product with-
in the scope of such section. Furthermore,
nothing in these sections is to be construed
as relieving anyone of the necessity of com~
plying with the provisions of the Federal
Food, Drug, and Cosmetic Act in respect to
labeling or any other matter coming within
the purview of that Act.
[Rule 7]
§ 65.8 Defamation of competitors or
false disparagement of their prod-
ucts.
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 the grade, quality, or
manufacture of the products of competi-
tors, or of their business methods, sell-
ing prices, values, credit terms, policies,
services, or conditions of employment, is
an unfair trade practice. [Rule 8]
§ 65.9 Deceptive use or imitation or
simulation of trade or corporate
names, trade-marks, etc.
It is an unfair trade practice for any
member of the industry:
468
Chapter |—Federal Trade Commission
(a) To imitate or simulate the trade-
marks, trade names, brands, or labels of
competitors, with the capacity and
tendency or effect of misleading or de~
ceiving purchasers or prospective pur-
chasers; or
(b) To represent by use of any trade
name, trade-marks, or other trade desig-
nation, that any industry member is a
manufacturer, wholesaler or importer
when such 1s not the fact; or
(c) To use any trade name, corpo~
rate name, trade-mark, or other trade
designation, which has the capacity and
tendency or effect of misleading or de-
ceiving purchasers or prospective pur-
chasers as to the name, nature, or origin
of any product of the industry, or of any
material used therein, or which is false,
deceptive, or misleading in any other
material respect. {Rule 9]
§ 65.10 Enticing away employees of
competitors.
Knowingly enticing away employees or
sales representatives of competitors un-
der any circumstances having the capac-
ity and tendency or effect of substan-
tially injuring or lessening present or
potential competition is an unfair trade
practice: Provided, That nothing in this
section shall be construed as prohibiting
employees from seeking more favorable
employment, or as prohibiting employers
from hiring or offering employment to
employees of competitors in good faith
and not for the purpose of injuring, de-
stroying, or preventing competition.
{Rule 10]
§ 65.11 Substitution of products.
It is an unfair trade practice for a
member of the industry to make unau-
thorized substitutions of industry prod-
ucts, where such substitutions have the
capacity and tendency or effect of mis-
leading 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
whicli the sale is consummated, or to
representations made prior to securing
the order, without advising the pur-
chaser of the substitution and obtaining
his consent thereto prior to making
shipment or delivery; or
(b) Falsely representing the reason
for making a substitution. [Rule 11]
§ 65.12 Inducing breach of contract.
(a) Knowingly inducing or attempting
to induce the breach of existing lawful
§ 65.14
contracts between competitors and their
customers, or between competitors and
thelr suppliers, or interfering with or
obstructing the performance of any such
contractual duties or services, under any
circumstance having the capacity and
tendency or effect of substantially in-
juring or lessening competition, is an
unfair trade practice.
(b) Nothing in this section is intended
to imply that it is improper to solicit the
business of a customer of a competing
industry member; nor ts the section to
be construed 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. [Rule 12]
§ 65.13 Use of gift enterprise or lottery
schemes.
The offering or giving of prizes,
premiums, or gifts in connection with
the sale or distribution of industry prod-
ucts, or as an inducement thereto, by
any method which involves a lottery or
gift enterprise, and the sale or distribu-
tion of industry products by any method
or plan which involves a lottery or gift
enterprise, are unfair trade practices.
(Rule 13]
§ 65.14 Prohibited forms of trade re-
straints (unlawful price fixing, etc.).!
it is an unfair trade practice for any
member of the industry, either directly
1The prohibitions of this section are sub-
ject to Public Law 6542, approved July
14, 1952—66 Stat. 682 (the McGuire Act,
commonly referred to as the “Fair Trade
Amendment”) which provides that with re-
spect to a commodity which bears, or the
label or container of which bears, the trade-
mark, brand, or name of the producer or
distributor of such commodity and which
is in free and open competition with com~
modities 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 estab-
lishes a minimum or stipulated price at
which such commodity may be resold by
such buyer when such contract or agreement
is lawful as applied to intrastate transac-
tions under the laws of the State, Territory,
or territorial jurisdiction in which the re-
sale is to be made or to which the commodity
is to be transported for such resale, and
when such contract or agreement is not be-
tween manufacturers, or between whole-
salers, or between brokers, or between factors,
or between retailers, or between persons,
firms, or corporations in competition with
each other.
469
§ 65.15
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,
imtimidation, or coercion to induce any
member of the industry or other person
or persons to engage in any such planned
common course of action, or to become
a party to any such understanding,
agreement, combination, or conspiracy.
{Rule 14]
§ 65.15 Use of the word ‘“‘free.””
In connection with the sale, offering
for sale, or distribution of industry
products, it is an unfair trade practice
to use the word “free” or any other word
or words of similar import, in advertise-
ments or in other offers to the public,
as descriptive of an article of merchan-
dise, or service, which is not an uncon-
ditional gift, under the following
circumstances:
(a) When all the conditions, obliga-
tions, or other prerequisites to the re-
ceipt and retention of the “free” article
of merchandise or service offered are not
clearly and conspicuously set forth at
the outset so as to leave no reasonable
probability that the terms of the offer
will be misunderstood; and, regardless
of such disclosure;
(b) When, with respect to any article
of merchandise required to be purchased
{n order to obtain the “free” article or
service, the offerer (1) increases the or-
dinary and usual price of such article
of merchandise, or (2) reduces its qual-
ity, or (3) reduces the quantity thereof.
Nore: The disclosure required by paragraph
(a) of this section shall appear in close con-
junction with the word “free” (or other word
or words of similar import) wherever such
word first appears in each advertisement or
offer. A disclosure in the form of a footnote,
to which reference is made by use of an
asterisk or other symbo! placed next to the
word “free,” will not be regarded as com-
pliance.
[Rule 15]
§ 65.16 Misrepresenting products as
conforming to standards.
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-
Title 16—Commercial Practices
ucts conform to any standards recognized
in or applicable to the industry when
such is not the fact. [Rule 16]
§ 65.17 Procurement of competitors’
confidential information.
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
misleading statements or representa-
tions, by the impersonation of one in
authority, or by any other unfair means,
and to use the information so obtained
so as substantially to injure competition
of | Unreasonably restrain trade. [Rule
§ 65.18 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 prohibited by
this part. [Rule 18] .
PART 66—WIRE ROPE INDUSTRY
Sec.
66.0 Definitions.
66.1 Misrepresentation (general).
66.2 Deception as to origin and disclosure
of foreign origin.
66.3 Substitution of products.
66.4 Misleading price lists.
66.6 Misuse of terms “close-outs,” “over-
runs,” “discontinued lines,” etc.
66.6 Deceptive invoicing, etc.
66.7. Prohibited discrimination. -
66.8 Prohibited forms of trade restraints
(unlawful price fixing, etc.).
66.9 Inducing breach of contract.
66.10 Consignment distribution.
66.11 Exclusive dealing.
66.12 Defamation of competitors or false
disparagement of their products.
66.13 Commercial bribery.
66.14 Push money.
66.15 ‘Tie-in sales—coercing purchase of one
product as a prerequisite to the
purchase of other products.
66.16 Unlawful use of volume of freight
trafic.
AvuTuortry: The provisions of this Part 66
issued under secs. 6, 5, 38 Stat. 721, 719; 15
U.S.C. 46, 45, unless otherwise noted.
Source: The provisions of this Part 66
appear at 28 F.R. 311, Jan. 11, 1963, unless
otherwise noted.
§ 66.0 Definitions.
(a) Industry member. Any person,
firm, corporation, or organization en-
470