The supreme court has ruled that price discrimination claims under the robinsonpatman act should be evaluated consistent with broader antitrust policies. In the marketing world today, from a pricing standpoint, we dabble more in terms of map, list price, msrp, invoice price, ir, pos rebate. In fact, the robinsonpatman act is historically referred to as the antichainstore act. The house judiciary committee in july 1935, heard five days of testimony on this bill and two others introduced by representative mapes h. Also known as the robinsonpatman antidiscrimination act and as the robinsonpatman price discrimination act. The robinsonpatman 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. The robinsonpatman act of 1936, also referred to as the anti price discrimination act, is a part of united states federal law that prohibits producers of products from participating in anticompetitive practices. Even the supreme court has acknowledged that the law by no means represents an exemplar of legislative clarity. The robinsonpatman act prohibits a seller of commodities from selling comparable. A federal law passed in 1936 to outlaw price discrimination. Robinsonpatman act legal definition of robinsonpatman act.
That act prohibits socalled price discrimination, where a seller sells the same product to similar buyers at different prices. But, i think every marketer who engages in pricing actions of sorts should be aware of this act. Commission administrative decisions addressing section 2e of the robinsonpatman act. Also known as the robinson patman antidiscrimination act and as the robinson patman price discrimination act. This historyplex post will give you all the details, and even a few examples of the robinson patman act of 1936.
It was designed to protect small retail shops against competition from chain stores by fixing a minimum price for retail products. Theres more to life than just work let the aba help balance your personal life with tips on wellness, relationships, worklife balance. S congress in 1936 in order to outlaw discrimination on price basis. The robinsonpatman act of 1936 is a united states federal law that prohibits anticompetitive. 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. The robinson patman act1 bans price discrimination,2 or more precisely, differential pricing. Introduction to the robinsonpatman act in introducing this introduction to the roblnsonpatman act, i shall be briefly chronological. The robinson patman act of 1936 is a united states federal law that prohibits anticompetitive practices by producers, specifically price discrimination. Robinsonpatman act and the ownuse exemption in health. The robinsonpatman act of 1936 was a result of this public outcry against the chain store. Robinson patman act application to variable pricing and. Congress in 1936 to supplement the clayton antitrust act clayton antitrust act, 1914, passed by the u.
Walmart and price discrimination by dukes, anthony j. Third, the robinsonpatman act applies only to actual sales, not to licenses or leases. The ronbinsonpatman act robinsonpatman antitrust law. Sep 16, 20 robinsonpatman act is not a very commonly used phrase in the marketers arsenal. Robinson patman act law and legal definition uslegal, inc. Patman and his allies of twentyfive years ago and the federal trade commission. Functional availability and the robinson patman act the robinsonpatman act applies whenever a manufacturer charges competing customers different prices for the same goods or provides them with different promotion packages. The robinson patman act rp, an antitrust statute aimed at protecting small businesses, limits price setting in distribution channels. The robinsonpatman act of 1936, also called the antiprice discrimination act, made it illegal for companies to engage in price discrimination. Robinsonpatman act article about robinsonpatman act by. Recent changes to the ftcs robinsonpatman act guidance. Recently, i considered how vendors providing goods can use the robinsonpatman act to rebuff a customers request for extended terms or, alternatively, use the acts meet the competition exception to limit extended terms to just the requesting customer. Robinsonpatman act definition, price discrimination.
The robinsonpatman act protects inefficient competitors rather than consumers. Act june 19, 1936, which amended this section and added sections a, b, and 21a of this title, is popularly known as the robinsonpatman act, as the robinsonpatman antidiscrimination act, and also as the robinsonpatman price discrimination act. Section 2a of the act prohibits certain forms of price discrimination by sellers that threaten to injure competition. The act prohibits sellers from charging different prices to different buyers for identical products when the effect might be injurious to competition. 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.
Congress in 1936 to supplement the clayton antitrust act. This document will not be included in each solicitation or contract. Robinson patman act article about robinson patman act by. 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 amendment to the clayton antitrust act prevented unfair price discrimination for the. Terms pushback strategy tps meets the robinsonpatman. The robinsonpatman act1 bans price discrimination,2 or more precisely, differential pricing. The bottomline message is that the robinsonpatman act is a fact of life that companies must be mindful of in making pricing decisions. So maybe the robinsonpatman act isnt dead after all.
Article information, pdf download for the robinsonpatman act. Introduction to the robinsonpatman act federal trade commission. 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. Patman act applies only to the sale of commodities e. In its report on the robinson patman amendment to section 2 of the clayton act, it was the opinion of the judiciary committee of the house that price discrimination practices exist to such an extent that the. Passed in 1936, the robinsonpatman act prevents unfair competition by regulating price discrimination. The act prohibits any person or firm engaged in interstate commerce from discriminating in price to different purchasers of the same commodity if such discrimination would. Apr 01, 2015 there is a rarely litigated but often irritating antitrust and distribution law known as the robinson patman act.
The robinson patman act of 1936, also called the antiprice discrimination act, made it illegal for companies to engage in price discrimination. Robinsonpatman act or why walmart has not yet taken over. Pdf the robinsonpatman act rp, an antitrust statute aimed at protecting small businesses, limits price setting in distribution channels. There is a rarely litigated but often irritating antitrust and distribution law known as the robinsonpatman act. Robinsonpatman act 1936 robinsonpatman act 1936 refers to a federal law that was passed by the u. The woodmansclorox dispute has reminded practitioners and clients alike that section 2e of the robinson patman act is not only still on the books but may be a source of liability, particularly if courts continue to apply the ftcs administrative decisions and the fred meyer guidelines. 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. Congress as an amendment to clarify and supplement the sherman antitrust act of 1890. 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 robinsonpatman act, of comparable scope and depth, which has. But the technicalities of the robinsonpatman act are not. The robinsonpatman act and vertical relationships request pdf. According to this act, businesses are required to sell their. Fourth, robinsonpatman claims for price discrimination must meet several specific legal tests.
Robinsonpatman act and vertical conflicts in distribution, the. 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. To avoid costly penalties under rp, managers take a variety. The tension between the robinsonpatman act and accepted antitrust policy has resulted in hostility in the courts often shared by juries to robinsonpatman claims. Kaiser foundation health plan letter from markus h. The act prohibits sellers from charging different prices to different buyers for identical products when the. The robinsonpatman act rp, an antitrust statute aimed at protecting small businesses, limits price setting in distribution channels. The robinsonpatman act is an amendment to the 1914 clayton antitrust act and is supposed to prevent unfair competition. D robinsonpatman act and the ownuse exemption in health systems, american journal of healthsystem pharmacy, volume 56, issue 10, 15. Familyowned wholesalers brought a robinsonpatman claim against the maker of 5hour energy alleging discounts given. The robinsonpatman act protects inefficient competitors rather than.
The act, which prevents unfair competition, is based on the amendment of the clayton antitrust act of 1914. The robinson patman act is part of the antitrust legislation of the clayton act of 1914. Bloch, dated february, 2008, concerning whether under the nonprofit institutions act exemption to the robinsonpatman act kaiser may lawfully purchase discounted pharmaceuticals for use in certain programs to provide health care services. In fact, the robinson patman act is historically referred to as the antichainstore act. The robinsonpatman act is the black sheep of antitrust. When a competitor, who sells a homogeneous product in the same market, receives a wholesale cost advantage from a manufacturer, economists should expect some competitive injury absent extraordinary circumstances. An overview of the robinson patman act of 1936 with notable examples. An overview of the robinsonpatman act of 1936 with notable. Discriminatory pricing and the robinsonpatman act every crs. D robinson patman act and the ownuse exemption in health systems, american journal of healthsystem pharmacy, volume 56, issue 10, 15. Robinson patman act legal definition of robinson patman act. Damages under the robinsonpatman act the federal circuit courts of appeals are in conflict concerning the proof required at the buyer level to support a verdict for damages for a robinsonpatman act violation. The robinsonpatman act of 1936 or antiprice discrimination act, pub.
The act prohibits sellers from setting different prices for competing. Robinsonpatman act and vertical relationships american. Terms pushback strategy tps meets the robinsonpatman act. The law grew out of practices in which chain stores were allowed to purchase goods at lower prices than other retailers. Short title act june 19, 1936, which amended this section and added sections a, b, and 21a of this title, is popularly known as the robinsonpatman act, as the robinsonpatman antidiscrimination act, and also as the robinsonpatman price discrimination act. The robinsonpatman act and consumer welfare seattle. The robinsonpatman act is an amendment to the 1914 clayton antitrust act and is. Act june 19, 1936, which amended this section and added sections a, b, and 21a of this title, is popularly known as the robinson patman act, as the robinson patman antidiscrimination act, and also as the robinson patman price discrimination act. Introduction to the robinson patman act in introducing this introduction to the roblnson patman act, i shall be briefly chronological.
The possibility of a suit brought under robinson patman increases the costs of efficient competitors. April 2425, 2008 law seminars international pharmaceutical antitrust 042408 in washington, dc stephen j. As you counsel your clients regarding the robinsonpatman act dont be too disdainful, regardless of your opinion of the economic policy behind it. In practice, robinson patman claims must meet several specific legal tests. In practice, robinsonpatman claims must meet several specific legal tests. Section 2d relates to the proscription of discrimination in payments or promotional allowances as. The act provides specific circumstances where price discrimination violates federal antitrust law, and allows private parties who were injured by illegal price discrimination to pursue litigation. Robinsonpatman act is not a very commonly used phrase in the marketers arsenal. The robinsonpatman act is an antitrust law, ignored for the most part by the federal. The robinson patman act is a depressionera law aimed at maintaining a healthy level of competition in the market.
In its meaning as simple english a discrimination is more. To violate the robinsonpatman act, the sellers price discrimination must have an anticompetitive effect. The robinsonpatman act is part of the antitrust legislation of. 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. The act requires a business to sell its products at the same price regardless of who the buyer is and was intended to prevent largevolume buyers from gaining an advantage over smallvolume. It is too soon to say who will win this case, but at the minimum both sides are going to have significant legal fees. The possibility of a suit brought under robinsonpatman increases the costs of efficient competitors. The act specifically limits price discrimination and it is an amendment to the clayton antitrust act. Competitive injury and damages under the robinsonpatman act. In its report on the robinsonpatman amendment to section 2 of the clayton act, it was the opinion of the judiciary committee of the house that price discrimination practices exist to such an extent that the.
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. One of the most important laws that keeps competition vigorous on the retail level is the robinsonpatman act. Jan 21, 2016 robinsonpatman act 1936 robinsonpatman act 1936 refers to a federal law that was passed by the u. Functional availability and the robinson patman act the robinson patman act applies whenever a manufacturer charges competing customers different prices for the same goods or provides them with different promotion packages. Bargaining between consumerproduct manufacturers and their retail customers is at least nominally constrained by the prohibitions on price discrimination. The robinson patman act protects inefficient competitors rather than consumers. 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 act applies to commodities, but not to services, and to purchases, but not to leases.
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