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Standard Oil Co Vs Ftc - Citation 98622 - Court Judgment | LegalCrystal
Standard Oil Co. Vs. Ftc - Court Judgment
LegalCrystal Citation legalcrystal.com/98622
Case Number 340 U.S. 231
standard oil co. v. ftc - 340 u.s. 231 (1951) u.s. supreme court standard oil co. v. ftc, 340 u.s. 231 (1951) standard oil co. v. federal trade commission no. 1 argued january 9-10, 1950 reargued october 9, 1950 decided january 8, 1951 340 u.s. 231 certiorari to the united states court of appeals for the seventh circuit syllabus 1. under § 2(b) of the clayton act, as amended by the robinson-patman act, 15 u.s.c. § 13(b), petitioner was justified in selling gasoline in interstate commerce to four comparatively large "jobber" customers in detroit at l/2 cents per gallon less than it sold like gasoline to many comparatively small service station customers in the same area, if the lower price to the "jobbers".....
Standard Oil Co. v. FTC - 340 U.S. 231 (1951)
U.S. Supreme Court Standard Oil Co. v. FTC, 340 U.S. 231 (1951)
1. Under § 2(b) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13(b), petitioner was justified in selling gasoline in interstate commerce to four comparatively large "jobber" customers in Detroit at l/2 cents per gallon less than it sold like gasoline to many comparatively small service station customers in the same area, if the lower price to the "jobbers" was made to retain each of them as a customer and in good faith to meet a lawful and equally low price of a competitor -- even though the effect of such price discrimination was to injure, destroy or prevent competition. Pp. 340 U. S. 233 -251.
(a) The amendments made by the Robinson-Patman Act restricted the scope of the defense now provided by § 2(b) to a price reduction made to meet in good faith a lawful and equally low price of a competitor; but they did not deprive this defense of its character as an absolute defense, nor condition it upon the absence of any resulting injury to competition. Pp. 340 U. S. 240 -251.
(b) This conclusion is consistent with Corn Products Refining Co. v. Federal Trade Commission, 324 U. S. 726 , and Federal Trade Commission v. Staley Mfg. Co., 324 U. S. 746 . Pp. 340 U. S. 243 -246.
(c) There has been a widespread understanding that, under the Robinson-Patman Act, it is a complete defense to a charge of price discrimination for the seller to show that its price differential has been made in good faith to meet a lawful and equally low price of a competitor, and this Court sees no reason to depart now from that interpretation. Pp. 340 U. S. 246 -250.
(d) Congress did not seek by the Robinson-Patman Act either to abolish competition or so radically to curtail it that a seller would have no substantial right of self-defense against a price raid by a competitor. P. 340 U. S. 249 .
derive a competitive advantage from them or may, in the natural course of events, reduce their own resale prices to their customers. P. 340 U. S. 250 .
(f) This Court rejects a construction of the proviso of § 2(b) which would make the defense afforded thereby dependent upon the conclusion which the Commission might reach in weighing the potentially injurious effect of a seller's price reduction upon competition at all lower levels against its beneficial effect in permitting the seller to meet competition at its own level. P. 340 U. S. 251 .
Held: such sales are in interstate commerce within the meaning of §§ 1 and 2 of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. §§ 12, 13, and are not deprived of their interstate character by such temporary storage of the gasoline in the Detroit area. Pp. 340 U. S. 236 -238.
finding as tp whether or not petitioner's price reduction was made in good faith to meet an equally low price of a competitor within the meaning of § 2(b) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13(b). Pp. 340 U. S. 233 -251.
The Federal Trade Commission ordered petitioner to cease and desist from selling gasoline to four comparatively large "jobber" customers in Detroit at a lower price than it sold like gasoline to many comparatively smaller service station customers in the same area. 43 F.T.C. 56. The Court of Appeals ordered enforcement of the order with a slight modification. 173 F.2d 210. This Court granted certiorari. 338 U.S. 865. Reversed and remanded, p. 340 U. S. 251 .
In this case, the Federal Trade Commission challenged the right of the Standard Oil Company, under the Robinson-Patman
Act, [ Footnote 1 ] to sell gasoline to four comparatively large "jobber" customers in Detroit at a less price per gallon than it sold like gasoline to many comparatively small service station customers in the same area. The company's defenses were that (1) the sales involved were not in interstate commerce, and (2) its lower price to the jobbers was justified because made to retain them as customers and in good faith to meet an equally low price of a competitor. [ Footnote 2 ] The Commission, with one member dissenting, ordered the company to cease and desist from making such a price differential. 43 F.T.C. 56. The Court of Appeals slightly modified the order and required its enforcement as modified. 173 F.2d 210. We granted certiorari on petition of the company because the case presents an important issue under the Robinson-Patman Act which has not been settled by this Court. 338 U.S. 865. The case was argued at our October Term, 1949, and reargued at this term. 339 U.S. 975.
Reserving for separate consideration the facts determining the issue of interstate commerce, the other material
Since the effective date of the Robinson-Patman Act, June 19, 1936, petitioner has sold its Red Crown gasoline to its "jobber" customers at its tank-car prices. Those prices have been 1 1/2Ë˜ per gallon less than its tankwagon prices to service station customers for identical gasoline in the same area. In practice, the service stations have resold the gasoline at the prevailing retail service station prices. [ Footnote 3 ] Each of petitioner's so-called "jobber" customers has been free to resell its gasoline at retail or wholesale. Each at some time, has resold some of its at retail. One now resells it only at retail. The others now resell it largely at wholesale. As to resale prices, two of the "jobbers" have resold their gasoline only at the prevailing wholesale or retail rates. The other two, however, have reflected, in varying degrees, petitioner's reductions in the cost of the gasoline to them by reducing their resale prices of that gasoline below the prevailing rates. The effect of these reductions has thus reached competing retail service stations in part through retail stations operated by the "jobbers" and in part through retail stations which purchased gasoline from the "jobbers" at less than the prevailing tankwagon prices. The Commission found that such reduced resale prices
41 F.T.C. 263, 283. The distinctive
characteristics of these "jobbers" are that each (1) maintains sufficient bulk storage to take delivery of gasoline in tank-car quantities (of 8,000 to 12,000 gallons), rather than in tankwagon quantities (of 700 to 800 gallons), as is customary for service stations; (2) owns and operates tankwagons and other facilities for delivery of gasoline to service stations; (3) has an established business sufficient to insure purchases of from one to two million gallons a year, and (4) has adequate credit responsibility. [ Footnote 4 ] While the cost of petitioner's sales and deliveries of gasoline to each of these four "jobbers" is no doubt less, per gallon, than the cost of its sales and deliveries of like gasoline to its service station customers in the same area, there is no finding that such difference accounts for the entire reduction in price made by petitioner to these "jobbers," and we proceed on the assumption that it does not entirely account for that difference.
II . THE SALES WERE MADE IN INTERSTATE COMMERCE
In order for the sales here involved to come under the Clayton Act, as amended by the Robinson-Patman Act,
they must have been made in interstate commerce. [ Footnote 5 ] The Commission and the court below agree that the sales were so made. 41 F.T.C. 263, 271, 173 F.2d 210, 213-214.
173 F.2d at 213-214. Gasoline delivered to customers in Detroit, upon individual orders for it, is taken from the gasoline at the terminal in interstate commerce en route for delivery in that area. Such sales are well within the jurisdictional requirements of the Act. Any other conclusion would fall short of the recognized
purpose of the Robinson-Patman Act to reach the operations of large interstate businesses in competition with small local concerns. Such temporary storage of the gasoline as occurs within the Detroit area does not deprive the gasoline of its interstate character. Stafford v. Wallace, 258 U. S. 495 . Compare Walling v. Jacksonville Paper Co., 317 U. S. 564 , 317 U. S. 570 , with Atlantic Coast Line R. Co. v. Standard Oil Co., 275 U. S. 257 , 275 U. S. 268 . [ Footnote 6 ]
III . THERE SHOULD BE A FINDING AS TO WHETHER OR NOT
Petitioner presented evidence tending to prove that its tank-car price was made to each "jobber" in order to retain that "jobber" as a customer and in good faith to meet a lawful and equally low price of a competitor. Petitioner sought to show that it succeeded in retaining these customers, although the tank-car price which it offered them merely approached or matched, and did not undercut, the lower prices offered them by several competitors of petitioner. The trial examiner made findings on the point, [ Footnote 7 ] but the Commission declined to do so, saying:
The Court below affirmed the Commission's position. [ Footnote 8 ]
There is no doubt that, under the Clayton Act, before its amendment by the Robinson-Patman Act, this evidence would have been material and, if accepted, would have
The question before us therefore is whether the amendments made by the Robinson-Patman Act deprived those facts of their previously recognized effectiveness as a defense. The material provisions of § 2, as amended, are
The defense in subsection (b), now before us, is limited to a price reduction made to meet in good faith an equally low price of a competitor. It thus eliminates certain difficulties which arose under the original Clayton Act. For example, it omits reference to discriminations in price "in
made by showing justification shall be upon the person charged with a violation of this section, and unless justification shall be affirmatively shown, the Commission is authorized to issue an order terminating the discrimination: Provided, however, 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. "
This right of a seller, under § 2(b), to meet in good faith an equally low price of a competitor has been considered here before. Both in Corn Products Refining Co. v. Federal Trade Comm'n, 324 U. S. 726 , and in Federal Trade Comm'n v. A. E. Staley Mfg. Co., 324 U. S. 746 , evidence in support of this defense was reviewed at length. There would have been no occasion thus to review it under the theory now contended for by the Commission. While this Court did not sustain the seller's defense in either case, it did unquestionably recognize the relevance of the evidence in support of that defense. The decision in each case was based upon the insufficiency of the seller's evidence to establish its defense, not upon the inadequacy of its defense as a matter of law. [ Footnote 9 ]
In the Corn Products case, supra, after recognizing that the seller had allowed differentials in price in favor of certain customers, this Court examined the evidence presented by the seller to show that such differentials were
(Emphasis added.) 324 U.S. at 324 U. S. 741 . [ Footnote 10 ]
In the Staley case, supra, most of the Court's opinion is devoted to the consideration of the evidence introduced in support of the seller's defense under § 2(b). The discussion proceeds upon the assumption, applicable here, that, if a competitor's "lower price" is a lawful individual price offered to any of the seller's customers, then the seller is protected, under § 2(b), in making a counteroffer provided the seller proves that its counteroffer is made to meet in good faith its competitor's equally low price. On the record in the Staley case, a majority of the Court of Appeals in fact declined to accept the findings of the Commission, and decided in favor of the accused seller. [ Footnote 11 ] This Court, on review, reversed that judgment
"Congress has left to the Commission the determination of fact in each case whether the person, charged with making discriminatory prices, acted in good faith to meet a competitor's equally low prices. The determination of this fact from the evidence is for the Commission. See Federal Trade Commission v. Pacific States Paper Trade Assn., 273 U. S. 52 , 273 U. S. 63 ; Federal Trade Commission v. Algoma Lumber Co., 291 U. S. 67 , 291 U. S. 73 . In the present case, the Commission's finding that respondents' price discriminations were not made to meet a 'lower' price, and consequently were not in good faith, is amply supported by the record, and we think the Court of Appeals erred in setting aside this portion of the Commission's order to cease and desist."
324 U.S. at 324 U. S. 758 , 324 U. S. 759 -760.
See also Federal Trade Comm'n v. Cement Institute, 333 U. S. 683 , 333 U. S. 721 -726; Federal Trade Comm'n v. Morton Salt Co., 334 U. S. 37 , 334 U. S. 43 , and United States v. United States Gypsum Co., 340 U. S. 76 , 340 U. S. 92 . All that petitioner asks in the instant case is that its evidence be considered and that findings be made by the Commission as to the sufficiency of that evidence to support petitioner's defense under § 2(b).
In addition, there has been widespread understanding that, under the Robinson-Patman Act, it is a complete defense to a charge of price discrimination for the seller to show that its price differential has been made in good faith to meet a lawful and equally low price of a competitor. This understanding is reflected in actions and statements of members and counsel of the Federal Trade Commission. [ Footnote 12 ] Representatives of the Department of
Justice have testified to the effectiveness and value of the defense under the Robinson-Patman Act. [ Footnote 13 ] We see no reason to depart now from that interpretation. [ Footnote 14 ]
The heart of our national economic policy long has been faith in the value of competition. In the Sherman and Clayton Acts, as well as in the Robinson-Patman Act,
"Congress was dealing with competition, which it sought to protect, and monopoly, which it sought to prevent." A. E. Staley Mfg. Co. v. Federal Trade Comm'n, 135 F.2d 453, 455. We need not now reconcile in its entirety the economic theory which underlies the Robinson-Patman Act with that of the Sherman and Clayton Acts. [ Footnote 15 ]
It is enough to say that Congress did not seek, by the Robinson-Patman Act, either to abolish competition or so radically to curtail it that a seller would have no substantial right of self-defense against a price raid by a competitor. For example, if a large customer requests his seller to meet a temptingly lower price offered to him by one of his seller's competitors, the seller may well find it essential, as a matter of business survival, to meet that price rather than to lose the customer. It might be that this customer is the seller's only available market for the major portion of the seller's product, and that the loss of this customer would result in forcing a much higher unit cost and higher sales price upon the seller's other customers.
In its argument here, the Commission suggests that there may be some situations in which it might recognize
Specifically, under § 2 of the Clayton Act, as amended by the Robinson-Patman Act, 49 Stat. 1526, 15 U.S.C. § 13. For the material text of § 2(a) and (b), see pp. 340 U. S. 242 -243 infra.
The Fair Labor Standards Act cases relied on by petitioner are not inconsistent with this result. They hold that, for the purposes of that statute, interstate commerce ceased on delivery to a local distributor. Higgins v. Carr Bros. Co., 317 U. S. 572 ; Walling v. Jacksonville Paper Co., supra. The sales involved here, on the other hand, are those of an interstate producer and refiner to a local distributor.
173 F.2d at 214, 217.
In contrast to that factual situation, the trial examiner for the Commission in the instant case has found the necessary facts to sustain the seller's defense ( see note 7 supra ), and yet the Commission refuses, as a matter of law, to give them consideration.
Attention has been directed again to the legislative history of the proviso. This was considered in the Corn Products and Staley cases. See especially 324 U.S. at 324 U. S. 752 -753. We find that the legislative history, at best, is inconclusive. It indicates that it was the purpose of Congress to limit, but not to abolish, the essence of the defense recognized as absolute in § 2 of the original Clayton Act, 38 Stat. 730, where a seller's reduction in price had been made "in good faith to meet competition. . . ." For example, the legislative history recognizes that the Robinson-Patman Act limits that defense to price differentials that do not undercut the competitor's price, and the amendments fail to protect differentials between prices in different communities where those prices are not actually competitive. There is also a suggestion in the debates, as well as in the remarks of this Court in the Staley case, supra, that a competitor's lower price, which may be met by a seller under the protection of § 2(b), must be a lawful price. And see S.Res. 224, 70th Cong., 1st Sess., directing the Federal Trade Commission to investigate and report to it on chain store operators, and F.T.C. Final Report on the Chain-Store Investigation, S.Doc. No. 4, 74th Cong., 1st Sess.
The Federal Trade Commission investigated practices of the Standard Oil Company of Indiana in selling its gasoline in the Detroit area at different prices to competing local distributors, in alleged violation of the Robinson-Patman (anti-price discrimination) Act. Standard's defense is not a denial of that discriminatory practice, but a complete justification, said to be allowed by the
The need to allow sellers to meet competition in price from other sellers while protecting the competitors of the buyers against the buyers' advantages gained from the price discrimination was a major cause of the enactment of the 1936 Robinson-Patman Act. The Clayton Act of 1914 had failed to solve the problem. The impossibility of drafting fixed words of a statute so as to allow sufficient flexibility to meet the myriad situations of national commerce, we think, led Congress in the Robinson-Patman Act to put authority in the Federal Trade Commission to determine when a seller's discriminatory sales price violated the prohibitions of the anti-monopoly statute, § 2(a), 49 Stat. 1526, and when it was justified by a competitor's legal price. [ Footnote 2/1 ] The disadvantage to business of this choice was that the seller could not be positive before the Commission acted as to precisely how far he might go in price discrimination to meet and beat his competition. The Commission acted on its interpretation of the Act. [ Footnote 2/2 ] Believing it important to support the purpose of Congress and the Commission's interpretation of the Act, with which we agree, we state our reasons.
Such a conclusion seems erroneous. What follows in this dissent demonstrates, we think, that Congress intended so to amend the Clayton Act that the avenue of escape given price discriminators by its "meeting competition" clause should be narrowed. The Court's interpretation leaves what the seller can do almost as wide open as before. See p. 340 U. S. 263 , et seq., infra. It seems clear to us that the interpretation put upon the clause of the Robinson-Patman Act by the Court means that no real change has been brought about by the amendment.
The public policy of the United States fosters the free-enterprise system of unfettered competition among producers and distributors of goods as the accepted method to put those goods into the hands of all consumers at the least expense. [ Footnote 2/3 ] There are, however, statutory exceptions to such unlimited competition. [ Footnote 2/4 ] Nondiscriminatory
pricing tends to weaken competition in that a seller, while otherwise maintaining his prices, cannot meet his antagonist's price to get a single order or customer. But Congress obviously concluded that the greater advantage would accrue by fostering equal access to supplies by competing merchants or other purchasers in the course of business. [ Footnote 2/5 ]
The first enactment to put limits on discriminatory selling prices was the Clayton Act in 1914, 38 Stat. 730, § 2. Section 11 enabled the Commission to use its investigatory and regulatory authority to handle price discrimination. Section 2 provided for the maintenance of competition by protecting the ability of business rivals to obtain commodities on equal terms. The Robinson-Patman Act moved further toward this objective. In the margin appear the applicable words of the Clayton Act followed by those of the Robinson-Patman Act. Phrased summarily for this case, it may be said that the italicized words in the Clayton Act were the source of the difficulties in enforcement that Congress undertook to avoid by the italicized words of the Robinson-Patman Act. [ Footnote 2/6 ]
We see little difference. The seller may still, under the Court's interpretation, discriminate in sales of goods of
The Clayton Act created a broad exception from control for prices made in good faith to meet competition. This raised problems of which Congress was aware. In reporting on a redrafted version of S. 3154, the Senate's companion bill to the House bill that became the Robinson-Patman Act, the Senate Committee on the Judiciary, February 3, 1936, pointed out the weakness of § 2 of the Clayton Act in permitting discrimination to meet competition, and suggested a harsh remedy, the elimination of its italicized proviso in note 6 supra, without the mollifying words of § 2(b) of the Robinson-Patman Act. [ Footnote 2/7 ] In
March, the House Committee on the Judiciary made its report on the bill that became the Act. Section 2(b) was then in substantially its present form. The report pointed out the draftsmen's purpose to strengthen the laws against price discrimination, directly or indirectly through brokerage or other allowances, services or absorptions of costs. [ Footnote 2/8 ] It commented that the subsection that became § 2(b) let a seller "meet the price actually previously
offered by a local competitor." [ Footnote 2/9 ] The language used in regard to competition in the bills and in the Act seems to have been based on a recommendation of the Federal Trade Commission. [ Footnote 2/10 ] The Commission had been
unable to restore the desired competition under the Clayton Act, and Congress evidently sought to open the way for effective action. [ Footnote 2/11 ]
Events in the course of the proposed legislation in the Senate and House have pertinence. The Senate inserted the original ineffective language of the Clayton Act in its exact form in the Senate bill. In the same draft, it adopted an amendment similar to the proviso ultimately enacted. 80 Cong.Rec. 6426, 6435. In the House, Representative Patman explained his view of the dangers in the original proviso. [ Footnote 2/12 ] It was taken out in Conference. [ Footnote 2/13 ]
The Chairman of the House managers, Mr. Utterback, before the Conference Report was agreed to by the House, received permission to print an explanation
The pertinent parts of the statement appear in the margin. [ Footnote 2/14 ]
Statutory Interpretation. This resume of the origin and purpose of the original § 2 of the Clayton Act and
the amendments of the Robinson-Patman Act gives a basis for determining the effect of this section in a hearing before the Commission where the charge, as here, that a seller during the same period of time has sold the same commodities to various purchasers at different prices is admitted, and the defense, the elements of which are likewise admitted, is that the discrimination was made in good faith to meet an equally low price of a competitor. Does meeting in good faith a competitor's price constitute a complete defense under the proviso to § 2(b)? Or does the fact of good faith reduction in price to a purchaser to meet a competitor's price merely rebut the prima facie establishment of discrimination, arising under the statute from proof of forbidden differences in price, [ Footnote 2/15 ] so as to require under § 2(a) affirmative finding by the Commission
The structure and wording of the Robinson-Patman Amendment to the Clayton Act also conduce to our conclusion. In the original Clayton Act, § 2 was not divided into subsections. In that statute, § 2 stated the body of the substantive offense, and then listed, in a series of provisos, various circumstances under which discriminations
in price were permissible. Thus, the statute provided that discriminations were not illegal if made on account of differences in the grade of the commodity sold, or differences in selling or transportation costs. Listed among these absolute justifications of the Clayton Act appeared the provision that "nothing herein contained shall prevent discrimination in price . . . made in good faith to meet competition." The Robinson-Patman Act, however, made two changes in respect of the "meeting competition" provision, one as to its location, the other in the phrasing. Unlike the original statute, § 2 of the Robinson-Patman Act is divided into two subsections. The first, § 2(a), retained the statement of substantive offense and the series of provisos treated by the Commission as affording full justifications for price discriminations; § 2(b) was created to deal with procedural problems in Federal Trade Commission proceedings, specifically to treat the question of burden of proof. In the process of this division, the "meeting competition" provision was separated from the other provisos, set off from the substantive provisions of § 2(a), and relegated to the position of a proviso to the procedural subsection, § 2(b). Unless it is believed that this change of position was fortuitous, it can be inferred that Congress meant to curtail the defense of meeting competition when it banished this proviso from the substantive division to the procedural. In the same way, the language changes made by § 2(b) of the Robinson-Patman Act reflect an intent to diminish the effectiveness of the sweeping defense offered by the Clayton Act's "meeting of competition" proviso. The original provisos in the Clayton Act, and the provisos now appearing in § 2(a), are worded to make it clear that nothing shall prevent certain price practices, such as price "differentials [making] . . . due allowance for differences in the cost of manufacture . . . " or "price changes . . . in response to changing
The Court suggests that former Federal Trade Commission cases decided here have treated the meeting competition clause of the Robinson-Patman Act as being an absolute defense, not merely a rebuttal of the discrimination charge requiring further finding by the Commission. Reference is made to Corn Products Refining Co. v. Federal Trade Comm'n, 324 U. S. 726 , and Federal Trade Comm'n v. A. E. Staley Mfg. Co., 324 U. S. 746 . In the Corn Products case, dealing with a basing point scheme for delivered prices, this Court merely said, at p. 324 U. S. 741 :
That citation included these words at 324 U. S. 752 -753:
it 'shall prevent' discriminations in price 'made in good faith to meet competition.' The change in language of this exception was for the purpose of making the defense a matter of evidence in each case, raising a question of fact as to whether the competition justified the discrimination. See the Conference Report, H.Rep. No. 2951, 74th Cong., 2d Sess., pp. 6-7; see also the statement of Representative Utterbach [ sic ], the Chairman of the House Conference Committee, 80 Cong.Rec. 9418."
After that statement, which it should be noted relies upon Mr. Utterback's interpretation quoted at note 14 of this opinion, the Court in the Staley case goes on to say that there was no evidence to show that Staley adopted a lower price to meet an equally low price of a competitor. Again there was no occasion for this Court to meet the present issue. We think our citation in Staley, quoted above, shows the then position of this Court. [ Footnote 2/16 ]
There are arguments available to support the contrary position. No definite statement appears in the committee reports that "meeting competition" is henceforth to be only a rebuttal of a prima facie case, and not a full justification for discrimination in price. The proviso of § 2(b) can be read as having the same substantive effect as the provisos of § 2(a). The earlier provisos are treated by the Commission as complete defenses. Perhaps there is an implication favorable to the petitioner's position in Representative Patman's omission to state the Federal Trade Commission interpretation on the floor. See n. 12, supra.
The underlying congressional purpose to curtail methods of avoiding limitations on price discriminations, however, considered with the more specific matters discussed herein, satisfies us that we should adopt the conclusion of the Commission and the Court of Appeals. [ Footnote 2/17 ] We believe that good faith meeting of a competitor's price only rebuts the prima facie case of violation established by showing the price discrimination. Whether the proven price discrimination is of a character that violates § 2(a) then becomes a matter for the determination of the Commission on a showing that there may be injury to competition.
Associated Press v. United States, 326 U. S. 1 , 326 U. S. 13 ; United States v. Line Material Co., 333 U. S. 287 , 333 U. S. 309 .
"(b) Upon proof being made at any hearing on a complaint under this section, that there has been discrimination in price or services or facilities furnished, the burden of rebutting the prima facie case thus made by showing justification shall be upon the person charged with a violation of this section, and unless justification shall be affirmatively shown, the Commission is authorized to issue an order terminating the discrimination: Provided, however, 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. "
"If the discrimination is 'on account of differences in the grade, quality, or quantity of the commodity sold,' or makes 'only due allowance for difference in the cost of selling or transportation,' or is 'made in good faith to meet competition,' it is not unlawful, even though the effect 'may be to substantially lessen competition or tend to create a monopoly in any line of commerce.' Discriminatory price concessions given to prevent the loss of a chain store's business to a competing manufacturer, to prevent it manufacturing its own goods, or to prevent it from discouraging in its stores the sale of a given manufacturer's goods, may be strongly urged by the manufacturer as 'made in good faith to meet competition.' See p. 90, id. "
But see pp. 340 U. S. 265 -266, infra.
The Court's opinion in this case refers, p. 340 U. S. 244 , notes 10 and 11, to the opinions of the Court of Appeals for the Seventh Circuit in Staley and Corn Products, 144 F.2d 211 and 221. But that court reversed its position in the opinion below, 173 F.2d 210, 216. It is fair to assume that reversal was because of our opinions in Corn Products and Staley.
It is hardly necessary to note that the wisdom of the enactment is not for the Commission nor the courts in enforcing the Act. The Commission recently has advised Congress that while, "on balance, it would be preferable to make the good faith meeting of competition a complete defense," it "does not strongly urge either view upon the Congress." Hearings before Subcommittee No. 1 of the House Committee on the Judiciary on S. 1008, 81st Cong., 1st Sess., June 8 and 14, 1949, p. 61. Compare Standard Oil Co. v. United States, 337 U. S. 293 , 337 U. S. 311 . This statement confirmed the Commission's position taken in this case. There were other officials of the Commission who have taken the view adopted by the Court.