Legal Document

363 U.S. 536 80 Supreme Court Reporter 1267 4 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 1385 FEDERAL TRADE COMMISSION, Petitioner,v.ANHEUSER-BUSCH, INC. Number 389. Argued March 2, 1960. Decided June 20, Mr. Philip Elman, Washington, D.C., for petitioner. Edgar Barton, New York City, respondent. Chief Justice WARREN delivered the opinion of Court. 1 The question presented is whether certain pricing activities respondent, Anheuser-Busch, Inc., constituted price discrimination within meaning § 2(a) Clayton Act, 38 Statutes-at-Large 730, as amended by Robinson-Patman 49 1526, 15 Code KF62 13(a), Annotated KF65 U5 13(a). Section provides in pertinent part: 2 'That it shall be unlawful any person engaged commerce, course such either directly or indirectly, to discriminate between different purchasers commodities like grade and quality, where purchases involved are sold use, consumption, resale Territory thereof District Columbia insular possession other place under jurisdiction States, effect may substantially lessen competition tend create a monopoly line injure, destroy, prevent with who grants knowingly receives benefit discrimination, customers them * *.' This controversy had its genesis complaint issued Federal Trade Commission 1955, which charged beer producer, violation 2(a). alleged that respondent 'discriminated quality selling some at higher prices than other(s)'; that, more specifically, lowered St. Louis, Missouri, market, without making similar reductions markets; this already diverted substantial business from respondent's Louis competitors; was 'sufficient' have same impact future; there 'reasonable probability' would commerce; might also Thus described pattern adverse effects only upon sellers' competition, commonly termed primary-line not buyers' secondary-line competition. 3 Both hearing examiner and, on appeal, held evidence introduced established found facts follows: Respondent, leading national brewer,1 sells so-called premium beer, priced beers regional local breweries great majority markets, although both differential vary market time time. During period relevant case, three principal competitors area, all breweries: Falstaff Brewing Corporation, Griesedieck Western Company, Brothers Brewery Company.2 In accord generally prevailing structure, these normally their products lower respondent's. 5 1953, most breweries, including granted employees wage increase, October 1,1953, they put into general increase.3 Although many throughout country followed suit raising prices, Falstaff, Western, maintained pre-October $2.35 per standard case. sales area did decline, fell, along industry general. 6 On January 4, 1954, $2.93 $2.68 thereby reducing previous 58$ 33$. A second cut occurred 21, $2.35, competitors. 3, day before first cut, been markets,4 during made no market. March, increased 45$ almost immediately raised 15$, re-established differential. ended discrimination. concluded: 7 'As result maintaining outside charging reduced those discriminated differently located.' 8 Since, will appear, aspect decision concerns us, necessary sketch summarily remaining elements Commission's decision. finding competitive injury predicated degree what regarded demonstrated diversion For example, comparing year, determined risen 201.5%, Falstaff's dropped slightly, Western's fallen about 33%, Brothers' plummeted 41%. tabular form, relative positions sellers were Dec. 31 30 Mar. July 1953 1954 1955 Respondent. 12.5. 16.55 39.3 21.03 Brothers.. 14.4. 12.58 4.8 7.36 Falstaff... 29.4. 32.05 29.1 36.62 Western... 38.9. 33. 23.1 27.78 All others. 4.8. 5.82 3.94 7.21 9 rejected contention good faith meet equally low competitor proviso 2(b) 13(b), attack examiner's cease-and-desist order meritless. thereupon adopted order, slight modification.5 10 review, Appeals set aside order. 265 Reporter, 2nd 677. We certiorari 361 880, 151, 117, because conflict developed among Courts importance administration statute. See Atlas Building Products company versus Diamond Block & Gravel Co., Cir., 269 950. 11 limited nature our inquiry can fully appreciated light correspondingly narrow Appeals, rested entirely holding threshold statutory element established. consider record supported requisite injury, defense valid, unduly broad. concluded erred construction warranted Respondent us affirm nonetheless alternative grounds strongly urged below. While is, sure, an appropriate action proper circumstances, we believe unwise grapple intricate problems, solution requires careful examination voluminous record, dealt Appeals. Therefore, case remanded, nothing should interpreted intimating view aspects controversy. 12 discussion import phrase 'discriminate price,' context must begin consideration purpose statute respect expressed doubt designed protect all, but has undertaken defend position here. understandable. 'precision expression outstanding characteristic Act,' Automatic Canteen America Comm., 346 61, 65, 73 1017, 1020, 97 L.Ed. 1454, least violated deals even though tertiary-line unaffected. could hardly read way, forbids discriminations 'where them.' (Emphasis added.) 13 legislative history plain. section, when originally enacted part Act 1914, born desire Congress curb use financially powerful corporations localized price-cutting tactics gravely impaired sellers.6 It course, quite true—and too well known require extensive exposition—that 1936 amendments motivated principally congressional concern over secondary burgeoning mammoth purchasers, notably chain stores.7 However, leaves intent strengthening provisions, weakening them, Congress' curtail pre-existing applicability affecting competition.8 14 federal courts, after amendment 2(a), taken scope cases involving impairment Porto Rican American Tobacco Rico 1929, 234; E. baron Muller 1944, 142 511; Maryland Baking 1957, 243 716; supra (1959). fact, original focus so evident compelled hold explicitly, contrary court decisions,9 restricted impeding protected well. Van Camp sons Can 278 245, 112, 311. And recently, Moore Mead's Fine Bread 348 115, 75 148, 99 145, sustained treble damage judgment favor competing seller based partly neither language history, nor judicial application countenances draws strength lingering protecting But rationale appears shaped precisely type doubt. before, '(t)here relationship entitles comparable treatment.' F.2d, page 681. Such exist, reasoned, if being purchasers. observed paid price, far disclosed. Consequently, assuming cuts 'were directed (Anheuser-Busch's) competitors, discriminatory.'10 Ibid. 16 qualification primary-line-competition way adumbrated decisions. supra, violations reliance presence absence factor. while competing, explicitly notion 518. cf. Balian Ice Cream Arden Farms 231 356. 17 More important, however, incompatibility Circuit Court's rule existence buyers obviously important terms merely fortuitous circumstance concerned. indicated, independent goal extend protection discriminating seller, limitation alien factor constitute debilitating graft 18 starting point Appeals—that synonymous difference—its test somewhat broader.11 concedes prerequisite maintains 'proof below cost unreasonably design eliminate obtain monopoly.' Since lacking here, argues cannot said 19 asserts decisions, reason. relies heavily, statement legislation Representative Utterback, manager conference bill became rather widely quoted exegesis Utterback declared 'a mere difference,' exists 'some parties equal prevail according Congressman, one involve sacrifice seller's costs profit,' 'it deficit inevitably up his customers.' Cong.Rec. 9416.12 cites expressions reflect classic examples predatory practices. H.R.Rep. 627, 63d Cong., Sess. 8; S.Rep. 698, 2—4. Moreover, principle advances decisions courts cases, consistently emphasize defendants.13 urges grounded scheme penalizes anticompetitive stems discriminatory pattern, results price. Thus, argument goes, unless proof high subsidized another, does fall compass section. contended, 1528, 13a, applicable, 2(a).14 Finally, accepted, law impose rigid uniformity world, sound economics policy antitrust laws trouble arguments necessarily irrelevant proceeding, misdirected issue solely convinced whatever rest §§ say here—there overtones buccaneering price.' Rather, provision difference. 20 When spoken assumed term differentiation. Comm. Cement Institute, 333 683, 721, 68 793, 813, 92 1010, referred 'discrimination price' 'selling kind goods cheaper purchaser another.' Morton Salt 334 37, 45, 822, 827, 1196, said, 'Congress meant using words need prove he purchaser's competitors.'15 commentators shared view.16 21 These assumptions, now conclude, firmly rooted structure statute, equating differentiation administered intended. As provision, proscribes differences, subject defined defenses,17 differences 'may benefit' differential, 'or 45—47, 827—828, 1196. words, itself spells out conditions make difference illegal legal, derange integrated means nondirective phrase, Not conceive but, perhaps this, thoroughly undesirable. commentator succinctly it, 'Inevitably every legal shift detailed governing provisions—'injury,' justification, 'meeting competition,' etc.—over 'discrimination' concept ad hoc resolution divorced specifically text.' Rowe, Price Differentials Product Differentiation: Issues Under 66 Yale L.J. 1, 38.18 22 face considerations, do find persuasive. fact activity falls civil proscription criminal irrelevant. partial overlap sections, significant extent by-product tortuous path bills through Congress,19 recognized. '(T)his section (§ 3) restrict operation prohibitions, sanctions, Act.' Corn Refining 324 726, 734, 65 961, 965, 89 1320.20 23 materials adduced indicate factors question—predatory cuts—may possibly matters proceeding. argued bears likelihood competition,21 reduction tends establish intent.22 Practically relied explicable basis, since concerned discrimination.23 cited descriptive prototype evil delineative outer reach possible exception Utterback. primary function effectuate Congress, properly discharged single weighty countervailing considerations present case.24 24 Nothing construed concerning relevance stressed standards wish out, hand, why bar, other, foreclosing urging material issues us. 25 What makes evident, believe, raise specter flat prohibition differentials, inasmuch violation. vigorously contested very separate insufficient lowering Nor proceed basis differentials existed prior choice committed discretion Commission; differentials. Our interest stage litigation confined exclusively identifying keeping distinct various complex. 26 reversed remanded further proceedings inconsistent opinion. 27 Reversed. Anheuser-Busch ranked nationally gross 1952 1954. Carling Company October, maintains—and petitioner agrees—that establishes Missouri Wisconsin. disposition immaterial review. Possibly note particular paragraph initial 'the findings, conclusions, modified, contained decision,' disagreement how encompassing incorporation was. 10, infra. dispute decision, forth above background appear unquestioned, unnecessary resolve disagreement. following table discloses spread: Mo.................. Chicago, Ill.................... 3.44 Cincinnati, Ohio................. 3.75 Houston, Tex.................... 3.70 Bronx, N. Y..................... 3.68 Kearney, Nebr................... Joseph, 3.17 Buffalo, Y................... 3.60 Baltimore, Md................... 3.62 D. C................ 3.65 Detroit, Mich................... 3.55 Boston, Mass.................... 3.69 Kansas Mo................. 3.15 Paul, Minn.................. 3.53 Sioux Falls, S. Dak............. 3.50 Denver, Colo. ------ San Francisco, Calif............ 3.79 Los Angeles, Calif.............. 3.80 'It Is Ordered corporation, officers, representatives, agents employees, corporate device, sale forthwith cease desist discriminating, either, any, 'commerce' proportionally reduces everywhere quantity beer.' 'Section expressly correcting forbidding common widespread unfair trade practice whereby smaller seek secure commerce aping methods corporations, heretofore endeavored destroy render unprofitable goods, wares, merchandise less communities rivals places country. past combinations commerce—notably Standard Oil others notoriety, influence—to commodities, oftentimes production sections ultimate acquiring locality made. *' 8. 2287, 74th Sess.; 1502, F.T.C., Final Report Chain-Store Investigation, S.Doc. 1st 43, 826, 1196; Attorney General's National Committee Study Antitrust Laws, 155—156; Austin, Discrimination Related Problems (2d rev. ed., 1959), 8—11; Palamountain, Politics Distribution, 188—234; Evolution Act: Twenty-Year Perspective, 57 Col.L.Rev. 1059. sources 7, supra. Mennen 288 KF105 F3 774, Law 1120; Biscuit 299 733. There related reductions. conclude dispute. encompass views. true passages lend support interpretation. accept reject construction. full 'In simple English, Underlying word idea treatment, casts burden disadvantage other. If two concerned, exists. Where, also, profit applied business, customers; there, too, exist base charge exists, markets levels bill.' See, e.g., supra; provides: party to, assist in, transaction sale, contract sell, discriminates knowledge against purchaser, discount, rebate, allowance, advertising service available grade, quantity; exacted elsewhere destroying eliminating States; or, competitor.' Atlantic Staley Mfg. 746, 757, 971, 976, 1338; Samuel Haw. Hawai‘i KFH45 A2 Moss, 148 378, 379; 155 1016. Compare pages 70, 71, 1022, 1023, 1454. Att'y Gen. Rep. 156; ed. 18—20; McAllister, Control States: Survey, Contemp. Prob. 273, 291—293; 36—38; Comment, Stan.L.Rev. 460, 461. see Zorn Feldman, Business 75. addition provisions regarding 537 U.S., 1268 S.Ct., portions 'showing states: herein due allowance manufacture, delivery resulting differing quantities still another changes response changing marketability actual imminent deterioration perishable obsolescence seasonal distress process, discontinuance concerned.' 291—293. 'Subsection (h) Senate report itself. contains operative penal Borah-Van Nuys (S. 4171). respects, provided 1. authorizes nohing prohibits, takes it. contrary, remedies liabilities attach sets special prohibitions offenses therein attaches then penalties provided.' 2951, Nashville Milk Carnation 355 373, 78 352, 355, 340; 3—4; 108 U. Pa.L.Rev. 116, 121; 45 Va.L.Rev. 1397, 1400; 19, Of depart Salt, 50—51, 830—831, adequacy tendency injure instant pointed involves sellers. 369; 165; Discrimination, Competition, Confusion: Another Look Robinson-Patman, 60 929, 956; 'New' Enforcement 34, 74—75; Symposium N.W.U.L.Rev. 197, 215, 224. Ruberoid 343 470, 484, 72 800, 808, 96 1081 (dissenting opinion). Perhaps worth noting connection House committee reports 'differential' interchangeably. 10; 5. Utterback's comment criticized 'ambiguous misleading often accepted analysis.' 18. Congressman immediate problem—protection competition—that significance cases.

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