Recently, i considered how vendors providing goods can use the robinson patman act to rebuff a customers request for extended terms or, alternatively, use the act s meet the competition exception to limit extended terms to just the requesting customer. The usual clayton act standard for measuring injury applies to robinsonpatman violationsthat is, a violation occurs when the effect may be substantially to lessen competition or tend to create a monopoly in any line of commerce. Using antitrust principles to reform antidumping law. Exploring the robinsonpatman act and its ethical implications.
The tension between the robinsonpatman act and accepted antitrust policy has resulted in hostility in the courts often shared by juries to robinsonpatman claims made by unhappy customers and competitors. Our cmrp exam secrets study guide will teach you what you need to know, but our study skills bonus will show you how to use the information to be successful on the cmrp exam. The robinsonpatman actalso called the antiprice discrimination actwas passed in 1936 to respond to the perceived unfairness of manufacturers that sold products at cheaper prices to chain stores, thereby creating a disadvantage to the chains singlestore competitors in a given town. Robinsonpatman act and international committees and the aba centre for. Once a student of the theologian karl barth, he eventually shifted from systematic theology to the study of the new testament. In that case, fred meyer, a chain of fourteen grocery stores, was charged with inducing suppliers to grant discriminatory promotional allowances in violation of section 2d of the robinson. Although elsewhere repudiated see text at notes 839 infra, the. Alaska is the only state without a law school, so for many clerks, the first true exposure to both alaska and alaskan law occurs when the clerkship begins.
Robinsonpatman actthe robinsonpatman act is a 1936 statute 15 u. The rationale for this act and the enforcement of the. Law implemented when it was discovered that chain retailers sold goods at a much lower price then smaller retailers. In addition, jamara buys all the materials for the parties, including the metal base, the paints, brushes, stencils, and transfers. The decision to extend credit and the decision about the terms offered can be viewed as similar to a decision regarding the price of the product or service. However, formatting rules can vary widely between applications and fields of interest or study. Should section 3 of the robinson patman act providing for criminal penalties be repealed. The robinsonpatman act protects inefficient competitors rather than consumers. Subsection 2a of the rpa prohibits restricts sellers ability to charge different prices for commodities of like grade or quality that they sell to competing buyers if the discrimination adversely affects competition. This paper identifies seven ways that firms strategically use the antitrust laws to further their own interests. Jan 31, 2018 this bestselling title, written by the highly respected author team from indiana university, takes a traditional approach to the business law course. Preston mcafee 1 california institute of technology. After graduating from hughes springs high school in 1912, he enrolled in cumberland university law school in lebanon, tennessee. Essentially designed to prevent suppliers from benefiting one retail purchaser over another by pricediscriminating, it has fallen into the netherworld of unenforced legislation.
Patman, john william wright the handbook of texas online. Clayton act and amended by the robinson patman act if a firm has a tying agreement with a distributor which substantially lessens competition. The act applies to commodities, but not to services, and to purchases, but not to leases. Price is the result of a great number of market forces, some controllable, some not. Chapter 10 terms and conditions of sale 103 extension of credit. The robinson patman act is an antitrust law, ignored for the most part by the federal trade commission and the justice department.
Ensures that sellers offer the same price terms to customers at a given level of trade. Goudy invited me to speak to you, he requested that i make some remarks regarding frdr trade laws. The supreme court has ruled that price discrimination claims under the robinson patman act should be evaluated consistent with broader antitrust policies. And sometimes they are meant to garner political support for a law by giving it a catchy name as with the usa patriot act or the take pride in america act or by invoking public outrage or sympathy as with any number of laws named for victims of crimes. Business aspects of pricing under the robinson patman act is the sixth in the trade regulation series edited by s. Quiz 5 at florida international university studyblue. We discuss the computational challenges and our solutions to them.
To violate the robinsonpatman act, the sellers price discrimination must have an anticompetitive effect. The robinson patman act1 bans price discrimination,2 or more precisely, differential pricing. Known as an innovator in the field, this text has pioneered by introducing materials on business ethics, corporate social responsibility, global legal issues, and ecommerce law. Article information, pdf download for the robinsonpatman act. The act prohibits discrimination in the prices charged, promotional allowances paid, or promotional services or facilities e. Carl has a bachelors degree in hotel and restaurant management and has recently completed an online masters degree program in management. So far as the authors handling of the case law both court and ftc decisions is concerned, the work seems to be extremely complete and ac. Congressman from texas in texass 1st congressional district and chair of the united states house committee on banking and currency 196375. Robinson patman act section 2 of the clayton act is known as the robinson patman act rpa.
Woodmans amended its complaint in may 2015 to add a sherman action section 1 claim against clorox but that claim and the supporting factual allegations are highly redacted. Ever since its enactment years ago, the robinson patman act has been the center of intense and continuing controversy. The robinsonpatman act of 1936, also called the antiprice discrimination act, made it illegal for companies to engage in price discrimination. Woodmans sued, alleging that the refusal to sell these large pack versions of the product violated sections 2a, 2d, and 2e of the robinson patman act. The study of the federal laws affecting competition between businesses. Act cases but also as early as 1947 in a robinson patman act case. Robinson patman act application to variable pricing and.
Robinson patman act study plan issues adopted by the commission for study a. The robinsonpatman act is an amendment to the 1914 clayton antitrust act. The robinsonpatman act is an antitrust law, ignored for the most part by the. Should the robinson patman act be repealed in whole or in part, or otherwise be modified. Robinson patman act application to variable pricing and privatization items for consideration for defense and congressional policy makers variable pricing the robinson patman act makes it unlawful, with certain exceptions, to knowingly sell goods in commerce, for use or sale within the united states at differing prices to contemporaneous. The robinson patman act rpa remains one of the core pieces of antitrust legislation in the united states. Patman and his allies of twentyfive years ago and the federal trade commission. Steuer is a partner at mayer brown llp in new york city and. Cases materials, problems seventh edition, 2014 professors fall 2016 supplement course description from the law school catalog.
The book, together with a companion volume by frederick m. The robinsonpatman act is an amendment to the 1914 clayton antitrust act and is supposed to prevent unfair. Pdf the robinsonpatman act rp, an antitrust statute aimed at protecting. Require a minimum order quantity, or offer volume discounts for large orders. Robinson patman act is one of the provisions, which constitutes the u. These hearings are an integral part of that process. Contemporaneous interstate sales of goods of like grade and quality to two competing resellers sale to sellers affiliate does not. The latter, the antidumping act of 1921, came to be the international version of price discrimination policy. While the ftc has largely stopped bringing robinson patman act enforcement actions, private actions remain. Business aspects of pricing under the robinsonpatman act. No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger. This course will examine the concepts of competition, market power, monopoly, and practices that might restrain trade.
The act specifically limits price discrimination and it is an amendment to the clayton antitrust act, which was the first law of its kinds to prevent unfair price discrimination. The robinson patman act also called the antiprice discrimination act was passed in 1936 to respond to the perceived unfairness of manufacturers that sold products at cheaper prices to chain stores, thereby creating a disadvantage to the chains singlestore competitors in a given town. While the manifestations of power may have changed in elements of the business channel, evidence is offered that substantial. The best preparation includes both knowing what to study and how to study. The federal act that in 1914 established the federal trade commission ftc to investigate unfair competitive practices of firms. Act of 1916, addressed what competition policy normally conceives of as predation. Reflections on the robinsonpatman act british institute of. Information of an administrative agency to guide them into the channels. Predatory pricing and related practices under section 2 of.
Theres more to life than just work let the aba help balance your personal life with tips on wellness, relationships, worklife balance. Another provision of the clayton act prohibits price discrimination by a seller where the effect is to injure the competition. Although proof of a violation of the robinsonpatman act often involves complex legal questions, businesses should keep in mind some of the basic practices that may be illegal under the act. Discriminatory pricing and the robinsonpatman act every crs. The robinson patman act of 1936 is antitrust legislation that amends section 2 of the clayton act of 1914, which was designed to prevent monopolies by catching earlystage practices leading to corporate mergers. Those same manufacturers might also need to contend with the reemergence of robinson patman act. International journal of purchasing and materials management.
Predatory pricing and related practices under section 2 of the sherman act t phillip areeda and donald f. Hospital pharmacy robinson patman law the board of pharmacy receives numerous calls concerning how a hospital can or cannot use drugs purchased under preferential prices. It shall be unlawful for any person engaged in commerce, in the course of such commerce, knowingly to. The law and economics of price discrimination in modern. In addition, we discuss the implications of this case study for future robinson patman cases. Price discrimination is a practice where a company will charge two different customers different prices for the same good. Even the supreme court has acknowledged that the law by no means represents an exemplar of legislative clarity. To violate the robinson patman act, the sellers price discrimination must have an anticompetitive effect. The clayton act, as amended by the robinson patman act, also provides a safe. The robinson patman act the act or law, the antitrust law prohibiting price discrimination, has long been a source of confusion and a target of criticism by courts, commentators, and practitioners. Robinson patman act also known as the robinson patman antidiscrimination act and as the robinson patman price discrimination act june 19, 1936, ch.
At the same time, the statute imposes significant costs on. Recent robinsonpatman act developments affecting automotive. The robinson patman act and its applicability in the modern age research paper example. Robinson patman act a united states federal law that prohibits anticompetitive practices by producers, specifically price discrimination. It did so by enacting the robinsonpatman antidiscrimination act as an amendment to section 2 of the claytonact and empowering the commission to deal with additional discrimi nations. The robinson patman act of 1936 made it illegal for companies to engage in certain behavior. A complete list of research papers in this series can be found at. In practice, robinson patman claims must meet several specific legal tests.
James jim mcconkey robinson, born june 30, 1924, was the founder and director emeritus of the institute for antiquity and christianity professor of religion emeritus at claremont graduate university. The myth of predatory pricing an empirical study, 4 anti trust l. That the bar has long needed a work of the instant sort requires no extended demonstration in view of the fact that it is the only treatment of the robinson patman act, of comparable scope and depth, which has. Form a distributor to stock and handle items not stocked by kanthal. D robinson patman act and the ownuse exemption in health systems, american journal of healthsystem pharmacy, volume 56, issue 10, 15 we use cookies to enhance your experience on our website. Robinsonpatman act legal definition of robinsonpatman act. Wright patman, lawyer and congressman, the son of john n. John william wright patman august 6, 1893 march 7, 1976 was a u. History books, newspapers, and other sources use the popular name to refer to these laws. Robinson patman act is a socially costly statute that produces no benefits to competition that could not be secured by means of litigation under the sherman act. Competitive injury and damages under the robinsonpatman act. The robinsonpatman act of 1936, also referred to as the antiprice discrimination act, is a part of united states federal law that prohibits producers of products from participating in anticompetitive practices. Supporters, acclaiming the act as the magna carta of small business, contend that the robinson patman law is important to ensure fair competition and to stop monopolies in their incipiency. Rowe3 which is more oriented toward legal analysis, provide an attractive and comprehensive research set for approaching robinson patman problems.
Robinson patman act is against price discrimination on customers. The robinsonpatman act and its applicability in the modern. The avenue to discounts for nonprofit hospital pharmacies. Robinsonpatman act and vertical relationships american. Even if the act s text could be construed in the manner urged by reeder. Employee retirement income security act receive retirement plan and health plan benefits immigration and nationality act only us citizens and individuals with work visas can work. Robinsonpatman act and the ownuse exemption in health. But the technicalities of the robinsonpatman act are not. Carl mason has been hired as general manager of a busy metropolitan restaurant. A federal law passed in 1936 to outlaw price discrimination.
Overview of the robinson patman act of 1936 an amendment to the 1914 clayton antitrust act that was intended to prevent unfair competition. The act was passed to address abuses of power in interactions among business components within the channel of distribution. Memorandum issues adopted by the commission for study. Terms pushback strategy tps meets the robinsonpatman. Robinson patman act a federal statute that allows for civil remedies if a plaintiff meets its burden of proof on all of the following conditions in the absence of a permitted defense. Apply froebs analytic method who made the bad decision. The bottomline message is that the robinsonpatman act is a fact of life that companies must be mindful of in making pricing decisions. In terms of subject matter, we will cover monopolies, horizontal restraints such those involved in pricefixing cartels, and vertical restraints such as loyalty discounts and resale restrictions. The robinsonpatman act of 1936 is a united states federal law that prohibits anticompetitive. Note that the act does not require retailers to sell at the same product at the same price.
Use the case study below to complete the exercise that follows. Ftc may waste time updating pricebias guide, attys say. We present a case study in the gasoline fuel market, where competitors engage in a high degree of pricematching and intense competition. Seventh circuit reverses promotional service decision under the robinson patman act 31 august 2016 wisconsin appellate law blog on august 12, 2016, the seventh. The way to get the test score that you deserve is by proper preparation.
Introduction to the robinsonpatman act federal trade commission. Before the recent election, some antitrust commentators called for reinvigorated robinson patman enforcement. The robinson patman act signals no large departure from that main concern. Robinsonpatman act a 1936 amendment to the clayton act that strengthens the clayton act against price discrimination. In 1936 congress took another step to strengthen the clayton act in further condemning discriminatory practices. Turner a firm may reduce its prices in an attempt to destroy its rivals. Seventh circuit reverses promotional service decision. The robinsonpatman act prohibits a seller of commodities from selling comparable goods to different buyers at different prices, except in certain. The basic purpose of enacting robinson patman act is to reduce the failure rate and prevent small sellers from the larger sellers from offering a different price to a different customer, unreasonably lowing prices and growing the chain stores. View essay unit 5 group activity robinson patman act. Perhaps the most significant robinsonpatman act decision by the federal trade commission last year was fred meyer, inc.
The robinsonpatman act of 1936 made it illegal for companies to engage in certain behavior. Trim the product line 20% of products account for 80% of sales. Mar, 2017 the robinsonpatman act, sponsored by senator joseph taylor robinson dar and representative john william wright patman dtx, is a united states federal law passed in 1936 prohibiting price discrimination and other anticompetitive practices by producers. The usual clayton act standard for measuring injury applies to robinson patman violationsthat is, a violation occurs when the effect may be substantially to lessen competition or tend to create a monopoly in any line of commerce. Business decision under robinson patman act university of the people bus 5110. Recent changes to the ftcs robinsonpatman act guidance. The robinson patman act of 1936, also called the antiprice discrimination act, made it illegal for companies to engage in price discrimination. Crossing the streams of price and promotion under the robinson. This table shows that after brooke group the percentage of favorable. Our focus will be 1 and 2 of the sherman act, plus aspects of the ftc act, the clayton act, and the robinsonpatman act. International journal of purchasing and materials management 32 january. Robinsonpatman act of 1936 the robinsonpatman act of 1936 is antitrust legislation that amends section 2 of the clayton act of 1914, which was designed to prevent monopolies by catching earlystage practices leading to corporate mergers. Before sharing sensitive information, make sure youre on a federal government site.