What the Robinson-Patman Act prohibits?

How the Robinson-Patman Act Works. The Act generally prohibits sales that discriminate in price on the sale of goods to equally-situated distributors, when the effect of such sales is to reduce competition and may give favored customers an advantage in the market unrelated to their actual efficiency.

What is required to show a violation of the Robinson-Patman Act?

The Robinson-Patman Act has 10 basic requirements that must be established for an effective claim of discrimination. These include, among others, evidence of intent, interstate commerce, goods of “like grade and quality,” and adverse effects on competition.

What are 3 basic defenses that a seller can use if accused under the Robinson-Patman Act?

Allegations of Robinson-Patman violations may be defended by asserting and proving either that the differing prices reflect only the cost of the seller’s manufacture or delivery (the “cost justification” defense); or, that the seller is attempting either (1) to meet the competition of another seller, or (2) enable his …

Under which circumstance is it legal to charge one buyer a lower price for an item than another buyer?

It is legal, however, to charge a lower price to a specific buyer if the cost of serving that buyer is lower or if the seller is simply “meeting competition.”

Is the Robinson-Patman Act still in effect?

Nevertheless, the law has survived, and while the Federal Trade Commission (FTC or Commission) has dramatically scaled back its enforcement of the law over the years, the risk of private treble damage actions remains quite real. Those who choose to ignore the Robinson-Patman Act today do so at their peril.

Who does the Robinson-Patman Act protect?

323, 38 Stat. 730), which was the first antitrust statute aimed at price discrimination. The Robinson-Patman Act prohibits a seller of commodities from selling comparable goods to different buyers at different prices, except in certain circumstances.

What are the 3 types of price discrimination?

There are three types of price discrimination: first-degree or perfect price discrimination, second-degree, and third-degree.

Which is true under the Robinson-Patman Act?

Which of the following is true of the Robinson-Patman Act of 1936? it illegalizes buyers using their purchasing power to force sellers into granting discriminatory prices. are laws that put a floor under wholesale and retail prices and prevent firms from selling below cost.

What is unlawful pricing behavior?

Illegal price fixing occurs whenever two or more competitors agree to take actions that have the effect of raising, lowering or stabilizing the price of any product or service without any legitimate justification. …

Which of the following is a violation of the Sherman Act?

The most common violations of the Sherman Act and the violations most likely to be prosecuted criminally are price fixing, bid rigging, and market allocation among competitors (commonly described as “horizontal agreements”).

What is Section 1 of the Sherman Act?

Section 1 of the Sherman Act (Section 1) This section of the Sherman Act prohibits agreements between two or more individuals or independent entities that unreasonably restrain trade (15 U.S.C. § 1). Section 1 also regulates foreign entities doing business abroad if the business sufficiently affects US consumers.

Is price fixing illegal?

Price fixing is an agreement (written, verbal, or inferred from conduct) among competitors that raises, lowers, or stabilizes prices or competitive terms. A plain agreement among competitors to fix prices is almost always illegal, whether prices are fixed at a minimum, maximum, or within some range. …

What was the history of the Robinson Patman Act?

The history of the Robinson-Patman Act actually begins in 1914, when section 2 of the Clayton Act became the first federal statute that expressly prohibited certain forms of price discrimination. In 1936, section 2 of the Clayton Act was amended by the Robinson-Patman Act, and it became a far more complex statute.

How are price discrimination claims evaluated under the Robinson Patman Act?

The Supreme Court has ruled that price discrimination claims under the Robinson-Patman Act should be evaluated consistent with broader antitrust policies. In practice, Robinson-Patman claims must meet several specific legal tests:

What are the legal requirements for Robinson Patman?

In practice, Robinson-Patman claims must meet several specific legal tests: The Act applies to commodities, but not to services, and to purchases, but not to leases. The goods must be of “like grade and quality.” There must be likely injury to competition (that is, a private plaintiff must also show actual harm to his or her business).

Is the FTC active in enforcement of the Robinson Patman Act?

The FTC is active in enforcement of the Robinson–Patman Act and the Department of Justice is not. This act is one in a category of regulatory enactments that attempt to control price discriminations—or different prices for identical products.