Editing Robinson–Patman Act

{{short description|1936 US law prohibiting price discrimination}}
{{Use dmy dates|date=March 2020}}
{{Competition law}}
The '''Robinson–Patman Act''' ('''RPA''') of 1936 (or '''Anti-Price Discrimination Act''', Pub. L. No. 74-692, 49 Stat. 1526 (codified at {{usc|15|13}})) is a [[United States federal law]] that prohibits anticompetitive practices by producers, specifically [[price discrimination]].<ref>{{Cite journal |last=Kelley |first=Pearce C. |date=1937 |title=The Robinson-Patman Act and Unfair Competition |url=https://www.jstor.org/stable/42879395 |journal=The Southwestern Social Science Quarterly |volume=18 |issue=1 |pages=54–63 |issn=0276-1742}}</ref> 

Co-sponsored by Senator [[Joseph T. Robinson]] ([[Democratic Party (United States)|D]]-[[Arkansas|AR]]) and Representative [[Wright Patman]] (D-[[Texas|TX]]), it was designed to protect small retail shops against competition from chain stores by fixing a minimum price for retail products. Specifically, the law prevents suppliers, wholesalers, or manufacturers from supplying goods to "preferred customers" at a reduced price. It also prevents coercing suppliers into restrictions as to whom they can and can't sell goods.<ref>{{Cite web|title=Robinson-Patman Act {{!}} Definition, Price Discrimination, & Small Businesses|url=https://www.britannica.com/topic/Robinson-Patman-Act|access-date=2021-05-10|website=Encyclopedia Britannica|language=en}}</ref><ref>{{Cite web|title=15 U.S. Code § 13 - Discrimination in price, services, or facilities|url=https://www.law.cornell.edu/uscode/text/15/13|access-date=2021-05-10|website=LII / Legal Information Institute|language=en}}</ref>  This means that it is illegal for a supplier to sell one truckload of goods at a steep discount to a large business, such as [[Walmart]] or [[Amazon (company)|Amazon]], and then charge a substantially higher price for a truckload of identical goods to a small business, such as a local grocery store.<ref name="Mitchell" />

The law grew out of business practices in which [[chain store]]s were allowed to purchase goods at lower prices than other [[retail]]ers.  The amendment to the [[Clayton Antitrust Act]] prevented unfair price discrimination for the first time by requiring a seller to offer the same price terms to customers at a given level of trade. The RPA provided for criminal penalties but contained a specific exemption for "[[cooperative|cooperative associations]]".<ref>{{cite journal |last1=Shanpo |first1=G.N. |last2=Van Susteren |first2=M.H. |title=The Special Position, if Any, of Cooperatives under the Robinson-Patman Act |journal=Wisconsin Law Review |date=1950 |page=119}}</ref> Enforcement of the RPA's provisions began to decline beginning in the 1980s.<ref name=":0" />  

==Contents==
In general, the Act 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. Price means net price and includes all compensation paid. The seller may not throw in additional goods or services. Injured parties or the US government may bring an action under the Act.

Liability under section 2(a) of the Act (with criminal sanctions) may arise on sales that involve:
*discrimination in price;
*on at least two consummated sales;
*from the same seller;
*to two different purchasers;
*sales must cross state lines;
*sales must be contemporaneous;
*of "commodities" of like grade and quality;
*sold for "use, consumption, or resale" within the United States; and
*the effect may be "substantially to lessen competition or tend to create a monopoly in any line of commerce."

"It shall be unlawful for any person engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by this section."

Defenses to the Act include cost justification and matching the price of a competitor. In practice, the "harm to competition" requirement often is the make-or-break point.

Sales to Military Exchanges and Commissaries are exempt from the act.<ref>{{Cite web|date=2013-06-11|title=Price Discrimination: Robinson-Patman Violations|url=https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/price-discrimination-robinson-patman|access-date=2021-05-10|website=Federal Trade Commission|language=en}}</ref>

The United States Department of Justice and the Federal Trade Commission have joint responsibilities for enforcement of the antitrust laws. Though the FTC has some overlapping responsibilities with the Department of Justice, and although the Robinson–Patman Act is an amendment to the Clayton Act, the Robinson–Patman Act is not widely considered to be in the core area of the antitrust laws. 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&mdash;or different prices for identical products. Similar prohibitions on discrimination have been found in specialized regulatory systems, such as those relating to transportation and communications.

Such statutes typically have exceptions or restrictions on range of application similar to those set out in the Robinson–Patman Act, to allow for differences in costs of output and distribution and differences in the degree of competition facing a vendor.

Early enforcement of the Robinson–Patman Act was difficult, and even today, it continues to be widely unenforced. That was in part because of its complexity, which limited consumers' ability to understand it. Even for consumers who had the education in antitrust law needed to understand the Robinson–Patman Act, it was unclear how its enforcement could benefit them.<ref>Phillips-Fein, Kim, and Julian E. Zelizer. ''What's Good for Business: Business and American Politics since World War II''. Oxford: Oxford UP, 2012. Print.</ref>

In the late 1960s, in response to industry pressure, federal enforcement of the Robinson–Patman Act ceased for several years.<ref>{{cite journal |last1=Greenburg |first1=Joshua |title=Enforcement, Criminal Sanctions and Private Actions |journal=[[Antitrust Law Journal]] |date=1984–1985 |volume=53 |page=1045 |access-date=10 March 2020 | url=http://heinonline.org/HOL/LandingPage?collection=journals&handle=hein.journals/antil53&div=119&id=&page=}}</ref> Enforcement of the law was driven largely by private action of individual plaintiffs. This most likely led to a decrease in enforcement because of the difficulty individuals tend to have understanding the Act. In the mid-1970s, there was an unsuccessful attempt to repeal the Act. The Federal Trade Commission revived its use of the Act in the late 1980s, alleging discriminatory pricing against bookstores by publishers,<ref>{{cite web|last1=Clark|first1=Donald|title=The Robinson-Patman Act: General Principles, Commission Proceedings, and Selected Issues|url=http://www.ftc.gov/speeches/other/patman.shtm|website=Federal Trade Commission|publisher=Federal Trade Commission|access-date=18 August 2016|url-status=dead|archive-url=https://web.archive.org/web/20070418110136/http://www.ftc.gov/speeches/other/patman.shtm|archive-date=18 April 2007}}</ref> but enforcement has declined again since the 1990s.<ref>{{cite web|last=Lipman|first=Melissa|title=FTC May Waste Time Updating Price-Bias Guide, Attys Say|url=http://www.law360.com/articles/397416/|publisher=Law360|access-date=18 August 2016}}</ref> On the other hand, over 20 states have price discrimination statutes similar to Robinson–Patman.<ref>{{cite web |url=http://www.pepperlaw.com/publications_article.aspx?ArticleKey=318 |publisher=Law Firm of Pepper Hamilton LLP |title=Robinson–Patman Act |archive-url=https://web.archive.org/web/20131029214931/http://www.pepperlaw.com/publications_article.aspx?ArticleKey=318 |archive-date=29 October 2013 }}</ref>

Volume discounts may violate the act if not all customers are made aware of the availability of the discounts.<ref>{{Cite web|title=Disfavored Retailers Turning Up the Volume on Robinson-Patman Litigation|url=https://www.klgates.com/Disfavored-Retailers-Turning-Up-the-Volume-on-Robinson-Patman-Litigation-02-14-2018|url-status=live|archive-url=https://web.archive.org/web/20200115224954/http://www.klgates.com/disfavored-retailers-turning-up-the-volume-on-robinson-patman-litigation-02-14-2018/|archive-date=2020-01-15|access-date=2020-08-09|website=www.klgates.com|language=en}}</ref>

==Notable cases==

* In 1948, the [[Supreme Court of the United States|Supreme Court]] upheld the [[Federal Trade Commission]]'s enforcement of the Act in the landmark case ''Federal Trade Commission v. Morton Salt''.<ref name=autogenerated1>[http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=334&invol=37 334 U.S. 37 (1948)], FindLaw</ref> The Commission found that [[Morton Salt]] violated the act when it sold its finest "Blue Label" salt, on a purportedly-standard quantity discount available to all customers but was really available only to five national chain stores that bought sufficient quantities of respondent's salt to obtain the discount price. According to the Court, "The legislative history of the Robinson-Patman Act makes it abundantly clear that Congress considered it to be an evil that a large buyer could secure a competitive advantage over a small buyer solely because of the large buyer's quantity purchasing ability."<ref name=autogenerated1 />
* In 1976, a dozen [[Texaco]] [[retail]]ers in [[Spokane, Washington]] who sued Texaco and won damages of $449,000, which were trebled under antitrust law. Texaco and other oil companies had made a practice of selling [[gasoline]] at one price to retailers and a lower price to [[wholesale]]rs. When some wholesalers went into the retail business, they obtained gasoline for their retail stations at the wholesaler discount, resulting in unlawful price discrimination.<ref>{{cite news| url=https://www.nytimes.com/1990/06/15/business/texaco-loses-in-high-court-on-discounts.html | work=The New York Times | first=Linda | last=Greenhouse | title=Texaco Loses In High Court On Discounts | date=15 June 1990}}</ref> The Supreme Court unanimously affirmed this decision in 1990.
* In 1994, the [[American Booksellers Association]] and [[independent bookstores]] filed a federal complaint in New York against [[Houghton Mifflin Company]], [[Penguin Group|Penguin USA]], [[St. Martin's Press]] and others, alleging that defendants had violated the Robinson–Patman Act by offering "more advantageous promotional allowances and price discounts" to "certain large national chains and buying clubs."<ref>{{Cite web |url=http://www.ftc.gov/speeches/other/spring98.shtm |title=The Robinson-Patman Act: Annual Update (04/98)<!-- Bot generated title --> |access-date=31 October 2010 |archive-url=https://web.archive.org/web/20100530094419/http://www.ftc.gov/speeches/other/spring98.shtm |archive-date=30 May 2010 |url-status=dead }}</ref> Later, complaints were filed against [[Random House]] and Putnam Berkley Group, and these cases also were later settled with the entry of similar consent decrees. Eventually, seven publishers entered consent decrees to stop predatory pricing, and Penguin paid $25 million to independent bookstores when it continued the illegal practices.<ref>[https://web.archive.org/web/19990819140413/http://www.businessweek.com/bwdaily/dnflash/mar1998/nf80326f.htm Inside The Book Business: Are The Giants Crushing The Little Guys?<!-- Bot generated title -->]</ref> In 1998, the ABA (which represented 3500 bookstores) and 26 individual stores filed suit in Northern California against chain stores [[Barnes & Noble]] and [[Borders (retailer)|Borders]], which had reportedly pressured publishers into offering the price advantages.<ref>[http://www.metroactive.com/papers/cruz/01.21.99/bookstores-9903.html MetroActive News & Issues | New Borders Bookstore<!-- Bot generated title -->]</ref>

== Modern enforcement ==
Enforcement of the RPA has declined since the 1980s.<ref name=":0">{{Cite web |date=2022-07-27 |title=Robinson-Patman Act and what it means for today {{!}} Legal Blog |url=https://legal.thomsonreuters.com/blog/robinson-patman-act-and-what-it-means-for-today/ |access-date=2022-09-28 |website=Thomson Reuters Law Blog |language=en-US}}</ref> In 2022, FTC commissioner [[Alvaro Bedoya]] endorsed a revival of enforcing the RPA in order to curb price discrimination.<ref>{{Cite web |last=Nylen |first=Leah |date=September 22, 2022 |title=FTC’s Bedoya Presses for Return to Fairness Over Efficiency |url=https://news.bloomberglaw.com/antitrust/ftcs-bedoya-presses-for-return-to-fairness-over-efficiency |access-date=September 24, 2022 |website=Bloomberg Law |language=en}}</ref> Commentators speculated that the FTC under [[Lina Khan]] would ramp up enforcement of the RPA in order to curb the unfair use of market power.<ref>{{Cite web |last=Papscun |first=Dan |date=July 7, 2022 |title=FTC’s Khan Eyes Old Weapon to Crack Down on New Market Players |url=https://news.bloomberglaw.com/antitrust/ftc-eyes-seldom-used-pricing-law-to-crack-down-on-market-abuse |access-date=2022-09-28 |website=Bloomberg Law |language=en}}</ref> In April 2024, there was a group of congressmen writing to [[Federal Trade Commission|FTC]] urging for a revival of the implementation of the Act.<ref>{{cite news |last1=Marar |first1=Satya |title=The congressional push to make your groceries more expensive |url=https://thehill.com/opinion/finance/4576404-the-congressional-push-to-make-your-groceries-more-expensive/ |access-date=7 April 2024 |work=The Hill |date=5 April 2024}}</ref><ref>{{cite news |title=Murphy, Blumenthal, Warren, Scanlon, Colleagues Urge FTC To Revive Enforcement Of Robinson-Patman Act To Promote Competition, Lower Food Prices {{!}} U.S. Senator Chris Murphy of Connecticut |url=https://www.murphy.senate.gov/newsroom/press-releases/murphy-blumenthal-warren-scanlon-colleagues-urge-ftc-to-revive-enforcement-of-robinson-patman-act-to-promote-competition-lower-food-prices |access-date=7 April 2024 |work=www.murphy.senate.gov |language=en}}</ref> In December 2024 the FTC sued liquor distributor Southern Glazer's under the Act, asserting that they charged small stores more than they charged large chains.<ref>{{cite news|access-date=13 December 2024 |date=12 December 2024 |language=en |title=F.T.C. Sues Largest U.S. Alcohol Distributor for Illegal Pricing |url=https://www.nytimes.com/2024/12/12/business/ftc-alcohol-lawsuit-illegal-pricing.html |work=New York Times}}</ref> 
There is uncertainty regarding its enforcement in the [[second Trump administration]].<ref name="Mitchell">{{cite news |last1=Mitchell |first1=Stacy |title=The Great Grocery: Squeeze How a federal policy change in the 1980s created the modern food desert |url=https://www.theatlantic.com/ideas/archive/2024/12/food-deserts-robinson-patman/680765/ |work=The Atlantic |date=December 1, 2024}}</ref>

Lax RPA enforcement since the 1980s has been a significant cause in the creation of rural and urban [[food deserts in the United States]].<ref name="Mitchell" />

==See also==
*[[Sherman Antitrust Act]] of 1890
*[[Clayton Antitrust Act]] of 1914
*[[Celler&ndash;Kefauver Act]] of 1950
*[[Hart&ndash;Scott&ndash;Rodino Antitrust Improvements Act]] of 1976
*[[Microeconomics]]
*[[Price skimming]]

==References==
<references/>

==Further reading==
* Werne, Benjamin (ed.). 1938. ''Business and the Robinson-Patman Law''. Oxford University Press.
* Blair, Roger D., and Christina DePasquale. ""Antitrust's Least Glorious Hour": The Robinson–Patman Act." ''Journal of Law and Economics'' 57.S3 (2014): S201-S216. [https://www.jstor.org/stable/10.1086/675783 in JSTOR]
*{{Cite journal|last=O'Brien |first=Daniel P. |author2=Shaffer, Greg  |year=1994 |title=The Welfare Effects of Forbidding Discriminatory Discounts: A Secondary Line Analysis of Robinson-Patman |journal=Journal of Law, Economics, & Organization |volume=10 |issue=2 |pages=296&ndash;318}}
*{{Cite journal|last=Ross |first=Thomas W. |year=1984 |title=Winners and Losers under the Robinson-Patman Act |journal=Journal of Law and Economics |volume=27 |issue=2 |pages=243&ndash;271 |doi=10.1086/467065 |s2cid=154491072 |hdl=10419/262432 |hdl-access=free }}

==External links==
* [https://www.govinfo.gov/content/pkg/COMPS-12152/uslm/COMPS-12152.xml Robinson-Patman Antidiscrimination Act] as amended ([https://www.govinfo.gov/content/pkg/COMPS-12152/pdf/COMPS-12152.pdf PDF]/[https://www.govinfo.gov/app/details/COMPS-12152/ details]) in the [[United States Government Publishing Office|GPO]] [https://www.govinfo.gov/help/comps Statute Compilations collection]
* [http://www.usdoj.gov/atr/foia/divisionmanual/ch2.htm#a3 U.S. Department of Justice Antitrust Division: Clayton Act, see footnote 2 for Robinson-Patman Act amendments]

{{United States antitrust law|state=collapsed}}
{{DEFAULTSORT:Robinson-Patman Act}}

[[Category:Acts of the 74th United States Congress]]
[[Category:United States federal antitrust legislation]]
[[Category:United States federal legislation articles without infoboxes]]