Robinson -- Patman Act - wikipedia Robinson -- Patman Act Competition law Basic concepts History of competition law Monopoly Coercive monopoly Natural monopoly Barriers to entry Herfindahl -- Hirschman Index Market concentration Market power SSNIP test Relevant market Merger control Anti-competitive practices Monopolization Collusion Formation of cartels Price fixing Bid rigging Product bundling and tying Refusal to deal Group boycott Essential facilities Exclusive dealing Dividing territories Conscious parallelism Predatory pricing Misuse of patents and copyrights Enforcement authorities and organizations International Competition Network List of competition regulators The Robinson -- Patman Act of 1936 ( or Anti-Price Discrimination Act, Pub. L. No. 74 - 692, 49 Stat. 1526 ( codified at 15 U.S.C. § 13 ) ) is a United States federal law that prohibits anticompetitive practices by producers, specifically price discrimination. It was designed to protect small retail shops against competition from chain stores by fixing a minimum price for retail products. The law grew out of practices in which chain stores were allowed to purchase goods at lower prices than other retailers. An amendment to the Clayton Antitrust Act, it prevented unfair price discrimination for the first time, by requiring that the seller offer the same price terms to customers at a given level of trade. The Act provided for criminal penalties, but contained a specific exemption for `` cooperative associations ''. Contents 1 Contents 2 Notable cases 3 See also 4 References 5 Further reading 6 External links Contents In general, the Act prohibits sales that discriminate in price on the sale of goods to equally - situated distributors when the effect of such sales is to reduce competition. Price means net price and includes all compensation paid. The seller may not throw in additional goods or services. Injured parties or the US government may bring an action under the Act. Liability under section 2 ( a ) of the Act ( with criminal sanctions ) may arise on sales that involve : discrimination in price ; on at least two consummated sales ; from the same seller ; to two different purchasers ; sales must cross state lines ; sales must be contemporaneous ; of `` commodities '' of like grade and quality ; sold for `` use, consumption, or resale '' within the United States ; and the effect may be `` substantially to lessen competition or tend to create a monopoly in any line of commerce. '' `` It shall be unlawful for any person engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by this section. '' Defenses to the Act include cost justification and matching the price of a competitor. In practice, the `` harm to competition '' requirement often is the make - or - break point. Sales to Military Exchanges and Commissaries are exempt from the act. The United States Department of Justice and the Federal Trade Commission have joint responsibilities for enforcement of the antitrust laws. Though the FTC has some overlapping responsibilities with the Department of Justice, and although the Robinson -- Patman Act is an amendment to the Clayton Act, the Robinson -- Patman Act is not widely considered to be in the core area of the antitrust laws. The FTC is active in enforcement of the Robinson -- Patman Act and the Department of Justice is not. This act is one in a category of regulatory enactments which attempt to control price discriminations -- or different prices for identical products. Similar prohibitions on discrimination have been found in specialized regulatory systems, such as those relating to transportation and communications. Such statutes typically have exceptions, or restrictions on range of application, similar to those set out in the Robinson -- Patman Act, to allow for differences in costs of output and distribution, and differences in the degree of competition facing a vendor. Early enforcement of the Robinson -- Patman Act was difficult, and even today continues to be widely unenforced. This was in part because of its complexity, which limited consumers ' ability to understand it. Even for the consumers who did have the education in antitrust law needed to understand the Robinson -- Patman Act, it was unclear how its enforcement could benefit them. In the late 1960s, in response to industry pressure, federal enforcement of the Robinson -- Patman Act ceased for several years. Enforcement of the law was driven largely by private action of individual plaintiffs. This most likely led to a decrease in enforcement because of the difficulty individuals tend to have understanding the Act. In the mid-1970s, there was an unsuccessful attempt to repeal the Act. The Federal Trade Commission revived its use of the Act in the late 1980s, alleging discriminatory pricing against bookstores by publishers, but enforcement has declined again since the 1990s. On the other hand, over 20 states have price discrimination statutes similar to Robinson -- Patman. Notable cases In 1948, the Supreme Court upheld the Federal Trade Commission 's enforcement of the Act in the landmark case Federal Trade Commission v. Morton Salt. The Commission found that Morton Salt violated the act when it sold its finest `` Blue Label '' salt, on a purportedly standard quantity discount available to all customers, but was really available only to five national chain stores who bought sufficient quantities of respondent 's salt to obtain the discount price. According to the Court, `` The legislative history of the Robinson - Patman Act makes it abundantly clear that Congress considered it to be an evil that a large buyer could secure a competitive advantage over a small buyer solely because of the large buyer 's quantity purchasing ability. '' In 1976, a dozen Texaco retailers in Spokane, Washington who sued Texaco and won damages of $ 449,000, which were trebled under antitrust law. Texaco and other oil companies had made a practice of selling gasoline at one price to retailers, and a lower price to wholesalers. When some wholesalers went into the retail business, they obtained gasoline for their retail stations at the wholesaler discount, resulting in unlawful price discrimination. The Supreme Court unanimously affirmed this decision in 1990. In 1994, the American Booksellers Association and independent bookstores filed a federal complaint in New York against Houghton Mifflin Company, Penguin USA, St. Martin 's Press and others, alleging that defendants had violated the Robinson -- Patman Act by offering `` more advantageous promotional allowances and price discounts '' to `` certain large national chains and buying clubs. '' Later, complaints were filed against Random House and Putnam Berkley Group, and these cases also were later settled with the entry of similar consent decrees. Eventually, seven publishers entered consent decrees to stop predatory pricing, and Penguin paid $25 million to independent bookstores when it continued the illegal practices. In 1998, the ABA ( which represented 3500 bookstores ) and 26 individual stores filed suit in Northern California against chain stores Barnes & Noble and Borders Group, who had reportedly pressured publishers into offering these price advantages. See also Sherman Antitrust Act of 1890 Clayton Antitrust Act of 1914 Celler -- Kefauver Act of 1950 Hart -- Scott -- Rodino Antitrust Improvements Act of 1976 Microeconomics Price skimming References Jump up ^ Phillips - Fein, Kim, and Julian E. Zelizer. What 's Good for Business : Business and American Politics since World War II. Oxford : Oxford UP, 2012. Print. Jump up ^ HeinOnline Jump up ^ Clark, Donald. `` The Robinson - Patman Act : General Principles, Commission Proceedings, and Selected Issues ''. Federal Trade Commission. Federal Trade Commission. Archived from the original on 18 April 2007. Retrieved 18 August 2016. CS1 maint : BOT : original - url status unknown ( link ) Jump up ^ Lipman, Melissa. `` FTC May Waste Time Updating Price - Bias Guide, Attys Say ''. Law360. Law360. Retrieved 18 August 2016. Jump up ^ Law Firm Of Pepper Hamilton LLP Robinson -- Patman Act Archived 2013 - 10 - 29 at the Wayback Machine. ^ Jump up to : FindLaw Cases and Codes Jump up ^ Greenhouse, Linda ( 1990 - 06 - 15 ). `` Texaco Loses In High Court On Discounts ''. The New York Times. Jump up ^ The Robinson - Patman Act : Annual Update ( 04 / 98 ) Jump up ^ Inside The Book Business : Are The Giants Crushing The Little Guys ? Jump up ^ MetroActive News & Issues New Borders Bookstore Further reading Blair, Roger D., and Christina DePasquale. `` `` Antitrust 's Least Glorious Hour '' : The Robinson -- Patman Act. '' Journal of Law and Economics 57. S3 ( 2014 ) : S201 - S216. in JSTOR O'Brien, Daniel P. ; Shaffer, Greg ( 1994 ). `` The Welfare Effects of Forbidding Discriminatory Discounts : A Secondary Line Analysis of Robinson - Patman ''. Journal of Law, Economics, & Organization. 10 ( 2 ) : 296 -- 318. Ross, Thomas W. ( 1984 ). `` Winners and Losers under the Robinson - Patman Act ''. Journal of Law and Economics. 27 ( 2 ) : 243 -- 271. doi : 10.1086 / 467065. External links U.S. Department of Justice Antitrust Division : Clayton Act, see footnote 2 for Robinson - Patman Act amendments Retrieved from `` https://en.wikipedia.org/w/index.php?title=Robinson -- Patman_Act&oldid = 837641609 '' Categories : 1936 in law 74th United States Congress United States federal antitrust legislation Hidden categories : CS1 maint : BOT : original - url status unknown Webarchive template wayback links Articles with inconsistent citation formats United States federal legislation articles without infoboxes Talk Contents About Wikipedia Add links This page was last edited on 22 April 2018, at 02 : 39. Text is available under the Creative Commons Attribution - ShareAlike License ; additional terms may apply. By using this site, you agree to the Terms of Use and Privacy Policy. Wikipedia ® is a registered trademark of the Wikimedia Foundation, Inc., a non-profit organization. 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Question: the clayton antitrust act of 1914 and the robinson-patman act of 1936 outlawed what
Answer: unfair price discrimination