Passed in 1936, the robinsonpatman act prevents unfair competition by regulating price discrimination. The possibility of a suit brought under robinson patman increases the costs of efficient competitors. 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. 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. But, i think every marketer who engages in pricing actions of sorts should be aware of this act. Terms pushback strategy tps meets the robinsonpatman. The act prohibits sellers from charging different prices to different buyers for identical products when the effect might be injurious to competition. The robinsonpatman act protects inefficient competitors rather than consumers. The robinsonpatman act of 1936 was a result of this public outcry against the chain store. S congress in 1936 in order to outlaw discrimination on price basis. Robinsonpatman act and its implications for marketers.
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. The robinsonpatman act and vertical relationships request pdf. The supreme court has ruled that price discrimination claims under the robinsonpatman act should be evaluated consistent with broader antitrust policies. Terms pushback strategy tps meets the robinsonpatman act. Third, the robinsonpatman act applies only to actual sales, not to licenses or leases. Robinson patman act law and legal definition uslegal, inc. Recent changes to the ftcs robinsonpatman act guidance. Article information, pdf download for the robinsonpatman act. Kaiser foundation health plan letter from markus h. The ronbinsonpatman act robinsonpatman antitrust law. Auto dealer robinsonpatman act cases after stevens creek. Terms and conditions army and air force exchange service.
Robinsonpatman act article about robinsonpatman act by. The robinsonpatman act rp, an antitrust statute aimed at protecting small businesses, limits price setting in distribution channels. The act prohibits sellers from charging different prices to different buyers for identical products when the. According to this act, businesses are required to sell their. 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. 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. The robinsonpatman act1 bans price discrimination,2 or more precisely, differential pricing. The robinson patman act of 1936, also called the antiprice discrimination act, made it illegal for companies to engage in price discrimination. That act prohibits socalled price discrimination, where a seller sells the same product to similar buyers at different prices. To avoid costly penalties under rp, managers take a variety. The robinson patman act of 1936 was a result of this public outcry against the chain store. Theres more to life than just work let the aba help balance your personal life with tips on wellness, relationships, worklife balance. 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. Robinsonpatman act is not a very commonly used phrase in the marketers arsenal.
Robinsonpatman act 1936 robinsonpatman act 1936 refers to a federal law that was passed by the u. Discriminatory pricing and the robinsonpatman act every crs. The robinsonpatman act is the black sheep of antitrust. As you counsel your clients regarding the robinsonpatman act dont be too disdainful, regardless of your opinion of the economic policy behind it. This document will not be included in each solicitation or contract. Patman and his allies of twentyfive years ago and the federal trade commission. 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. 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. Walmart and price discrimination by dukes, anthony j.
It was designed to protect small retail shops against competition from chain stores by fixing a minimum price for retail products. The robinsonpatman act protects inefficient competitors rather than. Congress in 1936 to supplement the clayton antitrust 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. Introduction to the robinsonpatman act federal trade commission. 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 act is a depressionera law aimed at maintaining a healthy level of competition in the market.
But the technicalities of the robinsonpatman act are not. The robinson patman act rp, an antitrust statute aimed at protecting small businesses, limits price setting in distribution channels. The robinsonpatman act prohibits a seller of commodities from selling comparable. 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.
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. Introduction to the robinson patman act in introducing this introduction to the roblnson patman act, i shall be briefly chronological. The robinsonpatman act and consumer welfare seattle. Pdf the robinsonpatman act rp, an antitrust statute aimed at protecting small businesses, limits price setting in distribution channels. Robinsonpatman act or why walmart has not yet taken over. A federal law passed in 1936 to outlaw price discrimination. 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. Robinsonpatman act legal definition of robinsonpatman act. The house judiciary committee in july 1935, heard five days of testimony on this bill and two others introduced by representative mapes h. Section 2a of the act prohibits certain forms of price discrimination by sellers that threaten to injure competition.
Familyowned wholesalers brought a robinsonpatman claim against the maker of 5hour energy alleging discounts given. The bottomline message is that the robinsonpatman act is a fact of life that companies must be mindful of in making pricing decisions. D robinson patman act and the ownuse exemption in health systems, american journal of healthsystem pharmacy, volume 56, issue 10, 15. 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. 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. This historyplex post will give you all the details, and even a few examples of the robinson patman act of 1936. Even the supreme court has acknowledged that the law by no means represents an exemplar of legislative clarity. Section 2d relates to the proscription of discrimination in payments or promotional allowances as. Robinsonpatman act and vertical conflicts in distribution, the. Robinson patman act article about robinson patman act by. The act specifically limits price discrimination and it is an amendment to the clayton antitrust act. Commission administrative decisions addressing section 2e of the robinsonpatman act. There is a rarely litigated but often irritating antitrust and distribution law known as the robinsonpatman act.
Robinsonpatman act and the ownuse exemption in health. Robinsonpatman act definition, price discrimination. The robinsonpatman act of 1936, also called the antiprice discrimination act, made it illegal for companies to engage in price discrimination. In its meaning as simple english a discrimination is more. The robinson patman act is part of the antitrust legislation of the clayton act of 1914. The amendment to the clayton antitrust act prevented unfair price discrimination for the. In fact, the robinson patman act is historically referred to as the antichainstore act. Robinson patman act application to variable pricing and. The robinsonpatman act of 1936 is a united states federal law that prohibits anticompetitive. 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.
Also known as the robinson patman antidiscrimination act and as the robinson patman price discrimination act. The robinsonpatman act is an amendment to the 1914 clayton antitrust act and is. In practice, robinsonpatman claims must meet several specific legal tests. The robinsonpatman act is part of the antitrust legislation of. Robinsonpatman act and vertical relationships american. The robinson patman act1 bans price discrimination,2 or more precisely, differential pricing. An overview of the robinson patman act of 1936 with notable examples. 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. Sep 16, 20 robinsonpatman act is not a very commonly used phrase in the marketers arsenal. Congress in 1936 to supplement the clayton antitrust act clayton antitrust act, 1914, passed by the u. The robinsonpatman act of 1936 or antiprice discrimination act, pub. In the marketing world today, from a pricing standpoint, we dabble more in terms of map, list price, msrp, invoice price, ir, pos rebate. The robinson patman act of 1936 is a united states federal law that prohibits anticompetitive practices by producers, specifically price discrimination.
Introduction to the robinsonpatman act in introducing this introduction to the roblnsonpatman act, i shall be briefly chronological. In practice, robinson patman claims must meet several specific legal tests. So maybe the robinsonpatman act isnt dead after all. Bargaining between consumerproduct manufacturers and their retail customers is at least nominally constrained by the prohibitions on price discrimination. April 2425, 2008 law seminars international pharmaceutical antitrust 042408 in washington, dc stephen j. 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.
The robinson patman act protects inefficient competitors rather than consumers. Also known as the robinsonpatman antidiscrimination act and as the robinsonpatman price discrimination act. Competitive injury and damages under the robinsonpatman act. One of the most important laws that keeps competition vigorous on the retail level is the robinsonpatman act. Patman act applies only to the sale of commodities e. The supreme court has ruled that price discrimination claims under the robinson patman act should be evaluated consistent with broader antitrust policies. An overview of the robinsonpatman act of 1936 with notable. 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. The possibility of a suit brought under robinsonpatman increases the costs of efficient competitors. Apr 01, 2015 there is a rarely litigated but often irritating antitrust and distribution law known as the robinson patman act. The act applies to commodities, but not to services, and to purchases, but not to leases. D robinsonpatman act and the ownuse exemption in health systems, american journal of healthsystem pharmacy, volume 56, issue 10, 15. The latest edition or change number will be shown in the solicitation, or contract, in.
The law grew out of practices in which chain stores were allowed to purchase goods at lower prices than other retailers. 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. 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 robinson patman act is an amendment to the 1914 clayton antitrust act and is supposed to prevent unfair. 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. In fact, the robinsonpatman act is historically referred to as the antichainstore act. To violate the robinsonpatman act, the sellers price discrimination must have an anticompetitive effect. Robinson patman act law and legal definition the robinsonpatman act was passed by the u. Robinson patman act legal definition of robinson patman act. In the marketing world today, from a pricing standpoint, we dabble more in.
The tension between the robinsonpatman act and accepted antitrust policy has resulted in hostility in the courts often shared by juries to robinsonpatman claims. The act, which prevents unfair competition, is based on the amendment of the clayton antitrust act of 1914. Bargaining between consumerproduct manufacturers and their retail customers is at least nominally constrained by the prohibitions on price discrimination of the robinsonpatman act rpa of 1936. Fourth, robinsonpatman claims for price discrimination must meet several specific legal tests. The act prohibits sellers from setting different prices for competing. 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. The act, advanced by congressman wright patman, prohibited any person or firm engaged in interstate commerce to discriminate in price to different purchasers of the same commodity when the effect. 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. 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 robinsonpatman act is an antitrust law, ignored for the most part by the federal.
Congress as an amendment to clarify and supplement the sherman antitrust act of 1890. 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 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. Jan 21, 2016 robinsonpatman act 1936 robinsonpatman act 1936 refers to a federal law that was passed by the u. The robinsonpatman act is an amendment to the 1914 clayton antitrust act and is supposed to prevent unfair competition. 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.
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