Opinion ID: 104123
Heading Depth: 1
Heading Rank: 2

Heading: Booking Practices.

Text: Ordinarily, when petitioners announce an advance in the price of glucose, they allow their customers a period of five days to book orders, that is, secure options to purchase, at the old price, and a period of thirty days in which to take delivery upon the options. The Commission charged that petitioners have further violated § 2 (a) of the Clayton Act, as amended, by permitting certain favored customers to secure options for the purchase of glucose, and to take delivery at the old price, for periods longer than those usually permitted to other customers. The Commission also charged other violations of § 2 (a) in that petitioners favored certain tank wagon customers by permitting them to book orders at the lower prices charged for tank car deliveries, and to take deliveries by tank wagon over extended periods of time. The Commission found, upon ample evidence, that these discriminations were in fact made by petitioners. Petitioners assert that the practices prohibited by § 2 (a) are discriminations in price, and not in the terms and conditions of sale other than price. They rely on the fact that in the course of the progress of the Robinson-Patman Bill through Congress, the phrase terms of sale, originally included in the prohibited discriminations, was stricken from the bill. But even if the contention be accepted, we cannot ignore the fact that the present discriminations in the terms of sale operated to permit the favored customers to purchase at a lower price than other customers, so that their only practical effect was to establish discriminations in price, precisely the evil at which the statute was aimed. And the Conference Committee, in reporting on this elimination of the phrase terms of sale from the bill, made it clear that § 2 (a) still applied to indirect as well as direct discriminations in price. It said that with the elimination of the phrase terms of sale, the act is inapplicable to terms of sale except as they amount in effect to the indirect discriminations in price within the meaning of the remainder of subsection (a). H. Rep. No. 2951, 74th Cong., 2nd Sess., p. 5. Petitioners also contend that these sales to favored customers were to meet the competition of other sellers of glucose, and were therefore excepted from the prohibition of § 2 (a), by the proviso of subsection (b) of § 2 of the Clayton Act, as amended. Subsection (b) provides: Upon proof being made, at any hearing on a complaint under this section, that there has been discrimination in price . . ., 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 . . . was made in good faith to meet an equally low price of a competitor . . . The only evidence said to rebut the prima facie case made by proof of the price discriminations was given by witnesses who had no personal knowledge of the transactions, and was limited to statements of each witness's assumption or conclusion that the price discriminations were justified by competition. Examination of the testimony satisfies us, as it did the court below, that it was insufficient to sustain a finding that the lower prices allowed to favored customers were in fact made to meet competition. Hence petitioners failed to sustain the burden of showing that the price discriminations were granted for the purpose of meeting competition. Cf. Federal Trade Commission v. A.E. Staley Mfg. Co., post, p. 746. Finally it is contended that there was no evidence to support the Commission's finding, which was referable to these practices as well as petitioners' basing point practices, that the discriminations in price may diminish competition within the meaning of § 2 (a). This finding as to the effect of both types of discrimination was based on the same stipulation of facts which we have already considered in connection with the basing point practices. Since the customers here are the same manufacturers of low-priced candies as were there involved, and since the price discriminations here are relatively substantial in a field where differences of a fraction of a cent in the price of candy are sufficient to divert business from one manufacturer to another, we think that the stipulation, which we find to be applicable to these as well as the basing point practices, is sufficient to support the finding of the prescribed effect on competition.