The Act does not tell a seller what prices he must charge, but it does forbid that seller, under specified circumstances, from discriminating in those prices. Charging different buyers different prices may be justifiable or defensible under the Act. However, the situations in which the price differentials are not considered unlawful must meet certain tests for validity and like most exceptions to a general rule, are to be strictly construed. While every difference in price does not constitute a violation of the Act, even very small differences have been found in certain circumstances to have the required anti-competitive effect. There can be unlawful price discrimination even without any difference in price if there are differences in related terms and conditions of sale.
Price is the net price received by the seller.
The Act is concerned with the protection of competition at three levels. The first level consists of competition with the seller who granted the discriminatory prices. The secondary level is the competition with the seller's purchaser who received the favorable lower price and the third level is the competition with a customer of the favored purchaser. There is no prohibition under the Act against the seller offering different prices to each of its purchasers, such as one price when the purchaser functions as a retailer and a different price when he functions as a wholesaler, provided that all competing purchasers are treated equally . The distributor does not compete with the oil companies who purchase the equipment for their own use at their own stations.