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effects a discrimination in price between different purchasers of goods of like grade and quality, where either or any of the purchases involved therein are in commerce, and where the effect thereof may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them: Provided, however:

(1) That the goods involved in any such transaction are sold for use, consumption, or resale within any place under the jurisdiction of the United States;

(2) That nothing herein contained shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered;

(3) That nothing herein contained shall prevent persons engaged in selling goods, wares, or merchandise in commerce from selecting their own customers in bona fide transactions and not in restraint of trade;

(4) That nothing herein contained shall prevent price changes from time to time where made in response to changing conditions affecting either (i) the market for the goods concerned, or (ii) the marketability of the goods, such as, but not limited to, actual or imminent deterioration of perishable goods, obsolescence of seasonal goods, distress sales under court process, or sales in good faith in discontinuance of business in the goods concerned.

(b) Prohibited brokerage and commissions. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other compensation, or any allowance or 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 intermediary therein where such intermediary 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.

(c) Prohibited advertising or promotional 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 facilities furnished by or through such customer 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 customer competing in the distribution of such products or commodities.

(d) Prohibited discriminatory services or facilities. It is an unfair trade practice for any member of the industry engaged in commerce to discriminate in favor of one purchaser against another purchaser or purchasers of a commodity bought for resale, with or without processing, by contracting to furnish or furnishing, or by contributing to the furnishing of, any services or facilities connected with the processing, handling, sale, or offering for sale of such commodity so purchased upon terms not accorded to all purchasers on proportionally equal terms.

(e) Inducing or receiving an illegal discrimination in price. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by the foregoing provisions of this section.

(f) Purchases by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit. The foregoing provisions of this section relate to practices within the purview of the RobinsonPatman Antidiscrimination Act, which act and the application thereunder of this section are subject to the limitations expressed in the amendment to such Robinson-Patman Antidiscrimination Act, which amendment was approved May 26, 1938, and reads as follows:

Be it enacted by the Senate and House of Representatives of the United States of Amer. ica in Congress assembled, That nothing in the Act Approved June 19, 1936 (Public, Numbered 692, Seventy-fourth Congress,

second session), known as the RobinsonPatman Antidiscrimination Act, shall apply to purchases of their supplies for their own use by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit. (52 Stat. 446; United States Code, Title 15, sec. 13c)

$ 158.17 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 indirectly, to use or promote the use of any unfair trade practice specified in this part. NOTE: For Group II rules, see 9 F.R. 1364.

PART 159—HEARING AID INDUSTRY

[ADDED) Sec. 159.1 Misrepresentation in general. 159 2 Misrepresentation as to warranties,

guarantees, and the servicing of

hearing aids. 1593 Blind advertising. 159.4 Misrepresentation of earnings of

salesmen or agents. 159.5 Misrepresentation as to character of

business. 159.6 Defamation of competitors or dis

paragement of their products. 159.7 Imitation or simulation of trade

marks, trade names, etc. 159.8 Procurement of competitors' confi

dential information by unfair

means and wrongful use thereof. 159.9 Unfair threats of infringement suits. 159.10 Inducing breach of contract. 159.11 Enticing away employees of competi

tors. 159.12 Commercial bribery. 159.13 Selling below cost. 159.14 Discrimination. 159.15 Aiding or abetting use of unfair trade

practices. AUTHORITY: $ $ 159.1 to 159.15, inclusive, issued under 38 Stat-719, as amended; 15 U.S.C. 45.

SOURCE: $ $ 159.1 to 159.15, inclusive, contained in Trade Practice Rules, Hearing Aid Industry, Federal Trade Commission, Dec. 30, 1944, 9 FR. 15137.

$ 159.1 Misrepresentation in general. It is an unfair trade practice for any member of the industry to use, or cause or promote the use of, any trade promotional literature, advertising matter, testimonial, guarantee, warranty, mark, brand, label, designation or representation, however disseminated or published, which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers, or such member's own sales agents, dealers, or distributors:

(a) With respect to the grade, quality, quantity, origin, price, terms of sale, use, construction, design, durability, performance, efficacy, restorative or other properties, or physiological benefits of any industry product; or

(b) With respect to any service offered, promised, or to be supplied to purchasers of such products; or

(c) With respect to the purported endorsement, acceptance, approval, or use thereof by any person, organization, agency, group, or association; or

(d) With respect to the manufacture, distribution, marketing, or servicing of any industry product, or in any other respect.

NOTE: Among the inhibitions of this section, but not in limitation thereof, is "false advertisement," as defined in section 15 of the Federal Trade Commission Act, of any "device" or other product within the scope of such section.

§ 159.2 Misrepresentation as to warranties, guarantees, and the servicing of hearing aids. It is an unfair trade practice for any member of the industry:

(a) To fail or refuse to promptly fulfill in good faith any warranties, guarantees, promises, or representations, express or implied, given or made to purchasers of industry products; or

(b) To fail or refuse to promptly render services or correct defects as warranted, guaranteed, promised, or represented; or

(c) To use any means whatsoever to induce purchasers to believe such warranties, guarantees, promises, or representations are more binding on the seller or afford more protection to the purchaser than is in fact true.

$ 159.3 Blind advertising. It is an unfair trade practice to use “blind" advertisements in such manner as to have the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers, directly or indirectly, as to the character, make, type, or efficacy of any industry product being offered for sale, or as to any services offered or promises in connection therewith, or as to the identity of the seller, or in any other respect. (Also, see note to $ 159.6.)

$ 159.4 Misrepresentation of earnings of salesmen or agents. It is an unfair trade practice for any member of the industry to make or publish, or cause to

be made or published, any advertisement, offer, statement, or other form of representation which directly or by implication is false, misleading or deceptive:

(a) Concerning the salary, commission, income, earnings or other remuneration which agents, canvassers, solicitors, or sales representatives receive or may receive; or

(b) Concerning any conditions or contingencies affecting such remuneration or the opportunities therefor.

§ 159.5 Misrepresentation as to character of business. It is an unfair trade practice for any member of the industry to represent, directly or indirectly, through the use of any word or term in his corporate or trade name, in his advertising or otherwise, that he is a manufacturer of hearing aids, or of batteries or other parts or accessories therefor, or that he is the owner or operator of a factory or producing company manufacturing them, or that he owns or maintains an acoustical research laboratory devoted to hearing aid research or development, when such is not the fact, or in any other manner to misrepresent the character, extent, or type of his business.

$ 159.6 Defamation of competitors or disparagement of their products. The defamation of competitors by falsely imputing them dishonorable conduct, inability to perform contracts, questionable credit standing, or by other false representations, or the false disparagement of the grade, quality, origin, price, terms of sale, use, construction, design, durability, performance, efficacy, physiological benefits, restorative or other properties, manufacture, distribution, marketing, or seryicing of the products of competitors, or of their business methods, values, credit terms, or policies, or in any other respect, is an unfair trade practice.

NOTE: The use of "blind" advertisements as a means of accomplishing such defamation or false disparagement is deemed to be within the inhibitions of this section, as well as the use of any other means of practicing such prohibited defamation or disparagement.)

$ 159.7 Imitation or simulation of trade-marks, trade names, etc. The imitation or simulation of the trademarks, trade names, brands, or labels of competitors, or of the exclusively owned designs of competitors which have not

been directly or by operation of law dedicated to the public, with the tendency and capacity or effect of misleading or deceiving purchasers or prospective purchasers, is an unfair trade practice.

§ 159.8 Procurement 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 information concerning the business of a competitor, by bribery of an employee or agent of such competitor, by false or misleading 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 a manner as to injure said competitor in his business or to suppress competition or unreasonably restrain trade.

$ 159.9 Unfair threats of infringement suits. The circulation of threats of suit for infringement of patents or trade-marks among customers or prospective customers of competitors, not made in good faith but for the purpose or with the effect of harassing or intimidating such customers or prospective customers or of unduly hampering, injuring or prejudicing competitors in their business, is an unfair trade practice.

$ 159.10 Inducing breach of contract. Inducing or attempting to induce the breach of existing lawful contracts between competitors and their dealers, customers or suppliers by any false or deceptive means whatsoever, 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 prejudicing competitors in their business, is an unfair trade practice.

§ 159.11 Enticing away employees of competitors. Wilfully enticing away the employees of competitors, or the employees of distributors, dealers, or representatives of such competitors, with the purpose and effect of thereby unduly hampering or injuring competitors in their business and destroying or substantially lessening competition, is an unfair trade practice.

NOTE: Nothing in this section shall be construed as prohibiting employees or agents from seeking more favorable employment, or as preventing manufacturers or sellers

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$ 159.12 Commercial bribery-(a) In selling or marketing. It is an unfair trade practice for a member of the industry, directly or indirectly, to give, or offer to give, or permit or cause to be given, money or anything of value to agents, employees, or representatives of customers or prospective customers, or to agents, employees, or representatives of competitors' customers or prospective customers, without the knowledge of their employers or principals, as an inducement to influence their employers or principals to purchase or contract to purchase products manufactured or sold by such industry member or the maker of such gift or offer, or to influence such employers or principals to refrain from dealing in the products of competitors or contracting to deal with competitors.

(b) in purchasing supplies. It is an unfair trade practice for any member of the industry, directly or indirectly, to bribe an employee or agent of a supplier to induce such supplier to discriminate in favor of such member of the industry over other purchasers from such supplier, with the effect of thereby unduly hampering a competitor of such member in his business and destroying or substantially lessening competition. (See also $ 159.14 (e), relative to procurement of illegal discrimination in price.)

$ 159.13 Selling below cost. The practice of selling industry products below the seller's cost with the intent and with the effect of injuring a competitor and where the effect may be substantially to lessen competition or tend to create a monopoly or unreasonably restrain trade is an unfair trade practice. All elements recognized by good accounting practice as proper elements of such cost shall be included in determining cost under this section. The costs, however, which are referred to in this section, are actual costs of the respective seller and not some other figure or average costs in the industry determined by an industry cost survey or otherwise.

$ 159.14 Discrimination-(a) Prohibited discriminatory prices, or rebates, refunds, discounts, credits, commissions, etc., which efect unlawful price discrimination. 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 indirectly, any rebate, refund, discount, credit, commission, or other form of price differential, where such rebate, refund, discount, credit, commission, or other form of price differential effects a discrimination in price between different purchasers of goods of like grade and quality, where either or any of the purchases involved therein are in commerce,' and where the effect thereof may be substantially to lessen competition or tend to create a monopoly in any line of commerce,' or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them: Provided, however:

(1) That the goods involved in any such transaction are sold for use, consumption, or resale within any place under the jurisdiction of the United States;

(2) That nothing contained in this section shall prevent differentials which might make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered;

(3) That nothing contained in this section shall prevent persons engaged in selling goods, wares, or merchandise in commerce,' from selecting their own customers in bona fide transactions and not in restraint of trade;

(4) That nothing contained in this section shall prevent price changes from time to time where made in response to changing conditions affecting either (i) the market for the goods concerned, or (ii) the marketability of the goods,

1 As here used, the word "commerce" means "trade or commerce among the sev- , eral 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 or other places under the jurisdiction of the United States, or between any such possession or place and any State or Territory of the United States or the District of Columbia or any foreign nation, or within the District of Columbia or any Territory or any insular possession or other place under the jurisdiction of the United States," (exclusive, however, of the Philippine Islands).

such as, but not limited to, actual or imminent deterioration of perishable goods, obsolescence of seasonal goods, distress sales under court process, or sales in good faith in discontinuance of business in the goods concerned.

(b) Prohibited brokerage and commissions. 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 commission, 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 intermediary therein where such intermediary 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.

(c) Prohibited advertising or promotional 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 facilities furnished by or through such customer 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 commodities.

(d) Prohibited discriminatory services or facilities. It is an unfair trade practice for any member of the industry to discriminate in favor of one purchaser against another purchaser or purchasers of a commodity bought for resale, with or without processing, by

contracting to furnish or furnishing, or by contributing to the furnishing of, any services or facilities connected with the processing, handling, sale, or offering for sale of such commodity so purchased upon terms not accorded to all purchasers on proportionately equal terms.

(e) Inducing or receiving an illegal discrimination in price. It is an unfair trade practice for any member of the industry engaged in commerce,' in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by the foregoing provisions of this section.

(f) Purchases by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit. The foregoing provisions of this section relate to practices within the purview of the RobinsonPatman Antidiscrimination Act, which act and the application thereunder of this section are subject to the limitations expressed in the amendment to such Robinson-Patman Antidiscrimination Act, which amendment was approved May 26, 1938, and reads as follows:

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That nothing in the Act approved June 19, 1936 (Public, Numbered 692, Seventy-fourth Congress, second session), known as the RobinsonPatman Antidiscrimination Act, shall apply to purchases of their supplies for their own use by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit.” (52 Stat. 446; United States Code, 1940 edition, Title 15, sec. 13c.)

$ 159.15 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 indirectly, to use or promote the use of any unfair trade practice specified in this part, or of any other unfair method of competition or unfair or deceptive act or practice.

NOTE: For Group II rules, see 9 F.R. 15139

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