Robinson-Patman Act

Robinson-Patman Act

  • Submitted By: bharke
  • Date Submitted: 03/07/2009 11:47 AM
  • Category: Business
  • Words: 2249
  • Page: 9
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Robinson-Patman Act
The Robinson-Patman Act is a 1936 statute (15 U.S.C.A. ยงยง 13(a-f) that amended Section 2 of the Clayton Act (Oct. 15, 1914, ch. 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.
The Robinson-Patman Act seeks to limit the ability of large, powerful buyers to gain price discounts through the use of their buying power. Although the act remains an important antitrust statute, private parties do not use it nearly as often as they use the Sherman Act, in part due to the Robinson-Patman Act's convoluted and complicated language. The government, which may bring an action under the Robinson-Patman Act through the Federal Trade Commission (FTC), rarely initiates actions under the statute.
In fact, the Robinson-Patman Act has been severely criticized throughout its history, both for its poor drafting and the economic theory behind it. Even the Supreme Court has criticized the act on more than one occasion, stating in 1952 that it is "complicated and vague in itself and even more so in its context. Indeed, the Court of Appeals seems to have thought it almost beyond understanding" (FTC v. Ruberoid Co., 343 U.S. 470, 72 S. Ct. 800, 96 L. Ed. 1081 [1952]). Nevertheless, the Robinson-Patman Act remains an important deterrent and remedy to market power abuses by large and powerful buyers.
The Robinson-Patman Act was passed during the Great Depression following the emergence of large, successful grocery-store chains. Small, independent grocery stores and their suppliers lobbied Congress to do something about the large chains, which were alleged to have exercised their superior buying power to achieve price discounts, driving small grocers out of business. The United States Wholesale Grocers Association drafted the original bill of what was to become the...

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