Discriminatory Pricing and the Robinson-Patman Act: Brief Overview, Including Some Exceptions (CRS Report for Congress)
| Release Date |
Oct. 16, 2002 |
| Report Number |
RS21337 |
| Report Type |
Report |
| Authors |
Janice E. Rubin, American Law Division |
| Source Agency |
Congressional Research Service |
Summary:
The Robinson-Patman Act (hereinafter, R-P), 15 U.S.C. § § 13, 13a, 13b, 21a, 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 buyers of those goods. Enacted during the Depression at the behest of small grocers who feared the buying power of large and growing chain grocers, it is the exception to the notion that the antitrust laws protect competition, not competitors in that it generally prohibits precisely the kind of price differentiation which would normally be thought to result from vigorous competition . Allegations of R-P 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 buyer to meet the competition of a competitor of the buyer ("meeting competition" defense). In addition, there is also a broad exception to the prohibition against price discrimination when one of the sales is made to any of certain entities listed in the Nonprofit Institutions Act, 15 U.S.C. § 13c, and the goods are purchased for the institution's "own use"; nonprofits may not, however, take advantage of their privileged Robinson-Patman status to purchase commodities at favorable prices in order to compete commercially with entities not so entitled. Further, lower courts have found that health maintenance organizations (HMOs) qualify as organizations entitled to take advantage of the Nonprofit Institutions Act, on the theory that they perform services that traditionally have been considered as "charitable," although the Supreme Court has not had occasion to rule on the status of HMOs.
The "in commerce" language of Robinson-Patman has been held to mean that the interstate commerce requirement is satisfied only when at least one of the two (or more) sales is made "in the stream of commerce"âi.e., across state lines.
This report will be updated as warranted.
