3

ANTITRUST

LEGALITY OF “ZONE PRICING” BY OIL COMPANIES UNDER THE

GASOLINE DIVORCEMENT LAW AND THE ROBINSONPATMAN ACT

January 28, 1994

The Honorable Gary R. Alexander

House of Delegates

You have requested our opinion whether the practice by major

oil companies of “zone pricing” in distributing gasoline to their

dealers for resale to the public violates the “voluntary allowance”

uniformity provision of §10-312 of the Business Regulation (“BR”)

Article, Maryland Code; and whether zone pricing violates federal

or State antitrust laws, specifically the Robinson-Patman Act or its

Maryland analogue. 

Based on our understanding of the relevant facts, we have

concluded as follows:

1. The “voluntary allowance” uniformity requirement in BR

§10-312(1) applies only to temporary price reductions that are

offered to a retail dealer to enable the dealer to meet the lower price

of a competing dealer. The provision does not require that the

wholesale price of gasoline to all dealers of one supplier be uniform

throughout Maryland and does not prohibit zone pricing.

2. Zone pricing in itself does not violate the RobinsonPatman Act. If the price discriminations imposed by zone pricing

cause an injury to competition, however, there may be a violation of

the Robinson-Patman Act in the geographic area where the injury

occurs. 
4 [79 Op. Att’y

I

Background

The Maryland Gasoline Divorcement Law, BR §§10-311 and

10-312, mandates that all retail gasoline service stations be operated

by independent dealers and prohibits operation of a retail gasoline

service station by a producer or refiner of motor oil. The major oil

companies supply gasoline to their dealers in Maryland and,

ordinarily, lease the station and equipment to them. The dealer

agreement requires the dealer to purchase gasoline from the dealer’s

supplier for sale under the brand name of the supplier. 

The wholesale price that the dealer pays to the supplier for

gasoline is called the dealer tank wagon price. The dealer tank

wagon price varies from day to day due to a variety of factors

including demand, availability, and suppliers’ costs. Each retail

dealer sets the resale price of gasoline to the public. 

Under a zone pricing system, as we understand it, an oil

company divides the state into geographic price zones. The oil

company creates the zones using undisclosed criteria. In fact, even

the number of zones remain undisclosed. Each retail station of the

particular brand in a given price zone pays an identical tank wagon

price. Each price zone, however, may receive a different tank wagon

price from its supplier. Dealers base the retail price of gasoline on

the tank wagon price that they pay to the suppliers. Since each zone

in the state may receive a different tank wagon price, the retail price

of gasoline for one brand will also vary in the state. See Cain v.

Chevron U.S.A., Inc., 757 F.Supp. 1120 (D. Or. 1991).

The Gasoline Divorcement Law was drafted, in part, to prevent

discrimination among dealers of the same brand of gasoline. The

General Assembly believed that all dealers of the same brand of

gasoline should be treated equally by their supplier of gasoline.

Governor v. Exxon Corp., 279 Md. 410, 370 A.2d 1102 (1977), aff’d

sub nom. Exxon Corp. v. Governor, 437 U.S. 117 (1978). The intent

of the federal Robinson-Patman Act, 15 U.S.C. §13, and its

Maryland analogue, §11-204(a)(3) of the Commercial Law (“CL”)

Article, Maryland Code, is to maximize equality of opportunities

among small, independent businesses by preventing price

discrimination by suppliers of goods of like grade and quality. FTC
Gen. 3] 5

 The paragraph reads in full as follows: 1

Each producer, refiner, or

wholesaler of motor fuel who supplies

motor fuel to retail service station

dealers:

(1) shall extend all voluntary

allowances uniformly to all retail

service station dealers supplied ....

v. Sun Oil Co., 371 U.S. 505, 520 (1963). This opinion will examine

whether the price discrimination created by zone pricing of gasoline

is prohibited by either the Gasoline Divorcement Law or the

Robinson-Patman Act. 

II

Voluntary Allowances

Under the Gasoline Divorcement Law, a major oil company

that supplies gasoline for resale by retail dealers in Maryland may

not operate any retail station. The statute also requires a supplier to

“extend all voluntary allowances uniformly to all retail dealers” that

it supplies. BR §10-312(1). This statute became law in 1974 and 1

survived challenges to its constitutionality in the Maryland Court of

Appeals and the United States Supreme Court. Governor v. Exxon

Corp., 279 Md. 410, 370 A.2d 1102 (1977), aff’d sub nom. Exxon

Corp. v. Governor, 437 U.S. 117 (1978). 

The intent of the General Assembly in passing the Gasoline

Divorcement Law was that all dealers selling the same brand of

gasoline would be treated equally by their suppliers. Governor v.

Exxon, 279 Md. at 447. This intent is reflected in the “voluntary

allowance” provision of the law. 

In Governor v. Exxon, the oil companies contended that the

uniform voluntary allowance provision conflicted with the federal

Robinson-Patman Act, 15 U.S.C. §13, and was therefore invalid

under the Supremacy Clause of the United States Constitution.

Specifically, the oil companies argued that the voluntary allowance

provision deprived them of a defense available under the RobinsonPatman Act: that a temporary price reduction to a dealer was made
6 [79 Op. Att’y

in good faith to meet the equally low price of a competitor. 279 Md.

at 445. See Part IIIC below. The Court of Appeals, after defining

the term “voluntary allowance,” rejected the oil companies’

argument and stated that the Gasoline Divorcement Law was not

invalid under the Supremacy Clause, a holding that was affirmed by

the Supreme Court. Exxon v. Governor, 437 U.S. at 133-34. 

To determine the meaning of “voluntary allowance,” the Court

of Appeals examined the Comptroller’s study of gasoline retailing

in Maryland, affidavits filed by the oil companies, congressional

reports dealing with the retail marketing of gasoline, and the

legislative history of the statute. Ultimately, the Court defined the

term as “temporary price reductions in the wholesale price to a retail

dealer to enable the dealer to meet the lower price of a competing

retail dealer.” Governor v. Exxon, 279 Md. at 447. The Court

determined that the purpose of “voluntary allowances” granted by oil

companies was to help its dealers reduce their retail prices in order

to compete directly with dealers of another brand. If, for example,

a brand X retail station lowers its pump price of gasoline and brand

Y grants a discount tank wagon price exclusively to its local brand

Y dealer across the street from the brand X dealer to help that one

dealer compete, the discount granted to the brand Y dealer is a

“voluntary allowance.” Under BR §10-312(1), if such a discount is

granted to one retail dealer in Maryland, it must be granted to all

dealers of that brand. 

The voluntary allowance provision of the Gasoline

Divorcement Law prohibits the granting of temporary price

reductions solely to one retail station or group of stations, but it is

not otherwise applicable to a major oil company’s zone pricing

system. The Court of Appeals has clearly defined the voluntary

allowance provision to require that any temporary price reduction

offered to a dealer to enable the dealer to meet the lower price of a

competing dealer must be offered uniformly to all dealers in the

state. 279 Md. at 452. The provision does not require major oil

companies to have one uniform tank wagon price for every retail

station in the state. 

In Governor v. Exxon Corp., the Court of Appeals carefully

defined the terms used in the statute in order to defeat the oil

companies’ claim that the statute was unconstitutionally vague. 279

Md. at 453-455. The Court said that the term “voluntary allowance”

does not refer to any other type of assistance that might be extended
Gen. 3] 7

 Though we have little information on how zone pricing 2

systems work in Maryland, they were examined in Cain v. Chevron

U.S.A., Inc., 757 F. Supp. 1120 (D. Or. 1991). There, the court

found that Chevron divided the City of Portland into 21 zones with

the objective of grouping all Chevron service stations that compete

with one another for customers into one geographic zone. The court

found that the zones were established by reference to traffic flow

patterns, locations of competing stations, price movement patterns,

and natural barriers to traffic flow. The grouping of retail service

stations of one brand in a geographical zone for the purpose of

establishing a wholesale price at which the oil company sells

gasoline to those dealers does not come under the purview of the

voluntary allowance provision.

to dealers such as rent relief, but specifically is limited to “certain

price discounts.” 279 Md. at 446 n.9. Thus, the meaning of the

voluntary allowance provision cannot be expanded to prohibit zone

pricing unless the sole reason for the zones is to grant temporary

discounts in the tank wagon price to dealers in some zones and not

to all dealers.2

We conclude that the Gasoline Divorcement Law does not

address the use of zone pricing by oil companies to set the dealer

tank wagon prices of gasoline. 

III

The Robinson-Patman Act

A. Introduction

The Robinson-Patman Act, a 1936 amendment to the Clayton

Act, is the principal federal statute directed at price discrimination.

Section 2(a) of the Robinson-Patman Act, 15 U.S.C. §13(a), is

intended to prohibit price discrimination by a seller to similarly

situated buyers when the effect of that discrimination injures or

lessens competition. The Act provides in pertinent part as follows:

That it shall be unlawful for any person

engaged in commerce, in the course of such

commerce ... to discriminate in price between

purchasers of commodities of like grade and

quality... where the effect of such
8 [79 Op. Att’y

discrimination may be substantially to lessen

competition or tend to create a monopoly in

any line of commerce, or 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.

Commentators have called the Robinson-Patman Act the most

controversial and complex of all antitrust statutes. See generally

ABA Section of Antitrust Law, Monograph 4, The Robinson-Patman

Act: Policy and Law, Vol. I (1980). It has been subject to extensive

interpretation by various federal circuit courts of appeals as well as

the United States Supreme Court. The Supreme Court once

observed that “precision of expression is not an outstanding

characteristic of the Robinson-Patman Act.” Automatic Canteen v.

FTC, 346 U.S. 61 (1953). 

The Federal Trade Commission and the Department of Justice

have authority to bring cases under § 2(a) of the Act, and private

parties may file suits for injunctions and damages. In actual

practice, the Justice Department does not bring any cases under

Robinson-Patman, and the Federal Trade Commission has not

brought cases in recent years. Most of the cases interpreting the Act

have been brought by private parties.

Under the Maryland Antitrust Act, Title 11, Subtitle 2 of the

Commercial Law (“CL”) Article, Maryland Code, the Attorney

General’s Office may bring a price discrimination action on behalf

of the State to recover damages under the Robinson-Patman Act.

The Attorney General may also bring a price discrimination action

in State court under Maryland’s version of § 2(a) of the RobinsonPatman Act, CL §11-204(a)(3). In interpreting and enforcing

Maryland’s version of the Robinson-Patman Act, State courts are to

be “guided by the interpretation given by the federal courts ....” CL

§11-202(a)(2). See Hinkleman v. Shell Oil Co., 962 F.2d 372, 379

(4th Cir.), cert. denied, 113 S.Ct. 831 (1992).

In order to establish a prima facie case of price discrimination

under the Robinson-Patman Act, a plaintiff must demonstrate (i) two

or more consummated sales in interstate commerce, (ii) that involve

commodities of like grade and quality, (iii) in which a different price

is charged by the same seller to two or more purchasers for use or
Gen. 3] 9

resale in the United States, and (iv) that the price discrimination

substantially injured competition. Texaco Inc. v. Hasbrouck, 496

U.S. 543, 110 S.Ct. 2535, 2542-43 (1990). An absolute defense to

a charge of price discrimination is provided in §2(b) of the Act,

which specifically provides an exception for price discriminations

given by suppliers to their competing retailer customers when the

discrimination is for the purpose of meeting in good faith the equally

low price of a competing supplier. 

This analysis will examine whether zone pricing, based on our

understanding of how the system works in Maryland, violates §2(a)

of the Robinson-Patman Act, and whether the major oil companies

that sell their gasoline to their dealers under a zone pricing system

would have available to them the “meeting competition” defense of

§2(b) if a prima facie case of price discrimination is proven. 

B. Section 2(a) Offense

For Robinson-Patman purposes, a transaction is within

interstate commerce if “at least one of the two transactions which

when compared generate a discrimination, crosses a state line.” Gulf

Oil Corp. v. Copp Paving Co. Inc., 419 U.S. 186 (1979). Since no

gasoline is refined in Maryland, see Exxon Corp. v. Governor, 437

U.S. at 123, the purchase of gasoline by an independent dealer in

Maryland from the dealer’s supplier is a transaction in interstate

commerce. 

Because each grade of gasoline sold by a particular oil

company to its dealers is identical, gasoline meets the “like grade

and quality” requirement of the Act. See Texaco v. Hasbrouck, 110

S.Ct. at 2543 n.14. The Supreme Court also held in Hasbrouck that

a price discrimination within the meaning of the Robinson-Patman

Act is merely a price difference. 110 S.Ct. at 2544. Thus, if two

retail dealers of the same brand are receiving different tank wagon

prices from their supplier, the price difference requirement of the

Act is met, and an analysis of whether a competitive injury has

occurred is necessary. 

The primary issue in any case challenging zone pricing on

Robinson-Patman grounds is whether zone pricing injures

competition. Before there can be a finding of an injury to

competition because of a price discrimination, there must first be a
10 [79 Op. Att’y

finding that the favored customer, who receives the benefit of a price

discount, is in actual competition with disfavored customers. For

instance, buyers who perform different functions in the selling chain,

such as wholesalers and retailers, do not compete for the same

customers and are not in competition. A price discrimination

between them would not cause a competitive injury actionable under

the Robinson-Patman Act. Texaco v. Hasbrouck, 110 S.Ct. at 2543.

Likewise, there is no actionable discrimination within the meaning

of §2(a) for price differences granted by a supplier to customers who

are in different geographical markets and thus do not compete with

each other. Best Brands Beverage v. Fallstaff Brewing Co., 842

F.2d 578 (2d Cir. 1987). 

Whether retail stations compete with each other is strictly a

factual issue. In Bargain Car Wash Inc. v. Standard Oil Co.

(Indiana), 466 F.2d 1163 (7th Cir. 1972), the court examined the use

by one defendant, American Oil, of zone pricing for retail gasoline

stations in Chicago. The evidence in that case showed that there

were 22 zones within a mile and a half radius of the plaintiff’s

American station, containing approximately 40 American retail

stations. The court found that the American zones did not represent

separate competitive markets for the sale of gasoline. The Court

stated that it was “readily apparent” that the plaintiff, Bargain Car

Wash, competed with American retail stations in the zones

surrounding Bargain. 466 F.2d at 1168.

 Bargain Car Wash and other cases indicate that when zones

created by a supplier are geographically close or arbitrarily chosen,

and there is a reasonable possibility that a dealer’s customers would

be likely to cross over from one area to another, then the favored

dealers may be found to be in competition with the disfavored

dealers. For example, in D.L. Ingram v. Phillips Petroleum Co., 259

F. Supp. 176 (D.N.M. 1966), the court found that two gasoline

wholesalers were in practical competition with each other. Despite

being in two separate states, each did business in an area comprising

a “single homogeneous economic unit” and customers from both

states patronized each of the businesses. 259 F. Supp. at 182. See

Falls City Industries, Inc. v. Vanco Beverage, Inc., 460 U.S. 428

(1983); Best Brands Beverage, Inc. v. Fallstaff Brewing Corp. 842

F.2d 578 (2d Cir. 1987).
Gen. 3] 11

 The Morton Salt “inference of injury” test has been affirmed 3

by the Supreme Court in more recent Robinson-Patman cases. In

Falls City Industries v. Vanco, the Court said that if the disfavored

(continued...)

Determining whether retailstations within one zone created by

an oil company compete with dealers of the same brand in other

zones in Maryland requires a factual analysis of the zones. This

analysis would include a study of the guidelines that were used in

determining the boundaries of the zone, the primary sources of the

customers for each dealer in the zone, and other similar economic

factors. If the zones are drawn narrowly, as in Bargain Car Wash,

there is usually a competitive nexus between the retail dealers in

some favored and disfavored price zones. However, if the zones are

drawn broadly ) for example, with one zone for the Washington area

and another zone for the Baltimore area ) it is more difficult to

prove actual competition between dealers in the two zones.

Evidence of actual competition between dealers is essential for a

prima facie case under the Robinson-Patman Act. Best Brands

Beverage v. Fallstaff Brewing Corp., 842 F.2d at 584. 

Once the competitive relationship has been established

between retail dealers of the same brand in separate zones, the final

step in making a prima facie case under §2(a) is to prove that the

price discrimination substantially injured competition. The injury

necessary to prove a violation of the Act may occur on any one of

three levels in the selling chain. These levels include injury at the

level of the seller’s competitors, known as a primary line injury;

injury at the level of the buyers, known as a secondary line injury;

and injury at the level of the buyer’s customers, known as a tertiary

line injury. Injury to competition caused by zone pricing, wherein

dealers receiving a favorable tank wagon price compete with dealers

of the same brand paying a higher tank wagon price, is secondary

line injury, because it occurs at the buyer’s level of competition.

The leading case on secondary line injuries to competition is

FTC v. Morton Salt Co., 334 U.S. 37 (1948). There the Supreme

Court held that proof of a substantial and sustained price

discrimination in the sale of products for resale in an amount

sufficient to influence resale prices is sufficient to raise an inference

of injury to competition. See ABA Antitrust Section, Monograph 4,

The Robinson-Patman Act: Policy & Law, Vol. I, at 97 (1980). The 3
12 [79 Op. Att’y

 (...continued) 3

customer shows proof of substantial price discrimination over time,

then a reasonable possibility exists that a price difference may harm

competition. 460 U.S. at 437. In Texaco v. Hasbrouck, the Supreme

Court held that for the plaintiff to prove competitive injury under

Robinson-Patman, the plaintiff need only show that a substantial

price discrimination existed between himself and his competitors

over a period of time. 110 S.Ct. at 2551.

Court also found that it is not necessary to prove that the price

discrimination actually harmed competition but only that there is a

reasonable possibility that the discrimination had such an effect on

competition. 334 U.S. at 47. 

Injury to competition may also be proven by evidence that the

price discrimination caused an injury to a specific competitor who

did not receive the benefit of the price discrimination. In Falls City

Industries, the Supreme Court said that if a plaintiff competitor

shows direct evidence of lost sales caused by the discrimination,

then a “reasonable possibility that a price difference may harm

competition” exists. 460 U.S. at 434-35. Accord, Feeser v. Serv-APortion, Inc., 909 F.2d 1524 (3d. Cir. 1990).

Thus, in order to prove that zone pricing violates the RobinsonPatman Act, it is necessary to prove a sustained and substantial price

discrimination sufficient to influence the favored customers’ resale

price or to prove that a dealer in a disfavored zone suffered a sales

or profit decline caused by the more favorable tank wagon price a

competitor in a different zone received.

In Bargain Car Wash, the federal court determined that the

price zones created by Standard Oil resulted in a competitive injury

both under the Morton Salt rule and because Bargain suffered a

direct injury as a result of the price discrimination. In that case, the

court examined the amount and duration of the discounts granted to

each of Bargain’s approximately 40 competitors in 12 different price

zones surrounding Bargain. It also examined the extent to which

this discrimination caused a diversion of business from Bargain and

the degree of Bargain’s competitors’ profit margins as compared to

Bargain’s profit margin. The court found that retail service stations

in other zones apart from Bargain received an average eleven

percent discount in the tank wagon price of gasoline over a one year

period in relation to Bargain, and that this was sufficient to meet the
Gen. 3] 13

Morton Salt test of a sustained and substantial price discrimination.

466 F.2d at 1174. The court also found that the lower prices granted

Bargain’s competitors in surrounding zones substantially contributed

to Bargain’s loss of sales and ultimate business failure. 466 F.2d at

1175. Subsequent cases have found competitive injury in gasoline

markets where the price differentials were as low as 1.8¢ to 6¢ a

gallon. Texaco v. Hasbrouck, 110 S.Ct. at 2530; Ingram v. Phillips,

259 F. Supp 176 (D.N.M. 1966). 

Conversely, if price discrimination is neither sustained nor

substantial in amount, or if the lost sales by a competing dealer are

minimal, there is no injury to competition due to the price

discrimination. In American Oil Company v. FTC, 325 F.2d 101 (7th

Cir. 1963), the court reversed a finding by the FTC that American

had violated the Robinson-Patman Act by selling gasoline at a lower

dealer tank wagon price to dealers in Smyrna, Georgia than to

dealers approximately 15 miles away in Marietta, Georgia, over a

seventeen day period, notwithstanding evidence that American

dealers in the two towns shared many of the same customers. The

court held that price discrimination per se does not constitute a

violation of §2(a) of the Robinson-Patman Act and went on to

examine the actual effect of the discrimination. The Court found

that a substantial but temporary price discrimination in favor of

Smyrna dealers had only a slight effect on competition and that a de

minimis injury is not sufficient for a prima facie violation of the

Robinson-Patman Act. 325 F.2d at 106.

Thus, to determine if a zone pricing system violates the

Robinson-Patman Act, one must examine (i) the history and

background of the system; (ii) the competitive pattern of the zones;

(iii) the price differentials between zones over at least a one year

period; (iv) the effect the price differential has had on pump prices;

(v) the economic effects that the granting of price differentials to

dealers in different zones has had on competition between dealers of

the same brand located in different price zones; and (vi) whether lost

sales can be directly attributed to the tank wagon price granted to

dealers in a favored zone. The cases suggest a high likelihood that

a competitive injury exists for any sustained differentials above the

de minimis level in a highly competitive industry with low profit

margins like the retail gasoline industry.

To summarize, zone pricing in itself does not violate the

Robinson-Patman Act. If the price discrimination imposed by zone

pricing causes an injury to competition, however, there may be a

violation of the Act in the area where the injury occurs. If the price
14 [79 Op. Att’y

discriminations by any oil company are sustained, substantial, and

pervasive, the Attorney General could seek an injunction on behalf

of the State to prohibit or change the zone pricing system.

Alternatively, a private plaintiff who can prove that there is a causal

connection between the plaintiff’s injury and the price discrimination

can, under the Act, seek damages and an injunction in federal court.

15 U.S.C. §§15 and 26. 

C. Section 2(b) Defense

A supplier of gasoline who commits a prima facie violation of

§2(a) of the Robinson-Patman Act may be able to escape liability by

establishing that the price discrimination was for the purpose of

meeting the equally low tank wagon price of a competitor. The socalled “meeting competition” defense is contained in §2(b) of the

Robinson-Patman Act, 15 U.S.C. §13(b), and it provides in pertinent

part: 

That nothing herein contained shall prevent a

seller rebutting the prima facie case thus made

by showing that his lower price or the

furnishing 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 facilities

furnished by a competitor.

The Supreme Court has held that this defense “‘requires the seller,

who has knowingly discriminated in price, to show the existence of

facts which would lead a reasonable and prudent person to believe

that the granting of a lower price would in fact meet the equally low

price of the competitor.’” Falls City Industries, Inc. v. Vanco

Beverage, Inc., 460 U.S. at 438 (quoting United States v. United

States Gypsum Co., 438 U.S. 422 (1978)). The meeting competition

defense of §2(b) is absolute, regardless of any adverse effect on

competition caused by the price discrimination. Standard Oil Co. v.

FTC, 340 U.S. 231, (1951). 

American Oil Company, one of the defendants in Bargain Car

Wash, argued that even if the court found that it had engaged in price

discrimination, it had done so to meet the competition it faced in

metropolitan Chicago. According to the court, the “meeting

competition” defense would be available to American if the lower
Gen. 3] 15

 Under FTC v. Sun Oil, 371 U.S. 505 (1963), the “meeting 4

competition” defense is not available to a supplier that lowers its

wholesale price to aid its dealers in competition with a dealer that

lowered its retail price without support from its supplier. In such a

situation, the supplier is not in competition with its dealer’s

competitor and cannot invoke the §2(b) defense. 

price granted to the favored competitors of Bargain was granted to

meet an equally low price made by a competitor of American to its

dealers who are in competition with American’s dealers. 466 F.2d

at 1175. The court found that American had violated §2(a) of the

Robinson-Patman Act but sent the case back to the district court to

examine whether American could prove this “meeting competition”

defense. 

In Governor v. Exxon, the Maryland Court of Appeals held that

the §2(b) defense was restricted to a situation in which a supplier

offered a tank wagon discount to a dealer in order to meet an equally

low price offered to that same dealer by another oil company. That

situation does not occur in the gasoline industry, because all dealers

of one brand purchase their gasoline from the supplier of that brand;

therefore, the Court held that the §2(b) defense was unavailable to

the major oil companies in Maryland. 279 Md. at 451-52. In its

affirmance, the Supreme Court signaled that it was aware of the

contrary holding on the availability of the §2(b) defense by the

Seventh Circuit in Bargain Car Wash but left the issue unresolved.

437 U.S. at 129 n.20 an accompanying text.4

IV

Conclusion

In summary, it is our opinion that zone pricing itself does not

violate BR §10-312(1) or federal and State price discrimination

laws. If the purpose of the zones is to grant voluntary allowances

only to selected dealers or if the effect of price zones is to cause a

competitive injury, their use may violate the Gasoline Divorcement

Law or the Robinson-Patman Act in particular areas in the State. In

order to prove a competitive injury, a private plaintiff or government

enforcement agency must show that the zones are so narrowly drawn

that dealers in different zones compete with each other, that the
16 [79 Op. Att’y

dealers in different zones receive substantial and sustained

differences in the tank wagon price granted from their supplier, and

that the injury suffered is not de minimis. A zone pricing system will

also violate §2(a) of the Robinson-Patman Act if evidence is offered

proving that a particular dealer lost sales because of the favorable

price granted to its competitor. If evidence is offered sufficient to

prove a prima facie case of a violation of §2(a) of the RobinsonPatman Act, the “meeting competition” defense would not be

available to the discriminator under Maryland law. 

J. Joseph Curran, Jr.

Attorney General

John R. Tennis

Assistant Attorney General

Jack Schwartz

Chief Counsel

 Opinions and Advice