Essay On The Robison-Patman Act
As an amendment to the Clayton Antitrust Act, the Robison-Patman Act originated as a result of price fixing and biased preferential treatment by suppliers to specific members of their client base. Suppliers looking to aid in the development or expansion of a favored supplier may provide better prices than other customers of the same purchasing rate and quality, per the Federal Trade Commission, “This kind of price discrimination may give favored customers an edge in the market that has nothing to do with their superior efficiency” (Federal Trade Commission, n.d.). The Act penalizes suppliers for this anti-competitive behavior, thus deters future organizations from conducting themselves in this manner. According to the American Bar Association,
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Supreme Court, that must be satisfied to render a violation of the Robison-Patman Act, these requirements include, “The Act applies to commodities, but not to services, and to purchases, but not to leases. The goods must be of like grade and quality. There must be likely injury to competition (that is, a private plaintiff must also show actual harm to his or her business, and the sales must be "in" interstate commerce (that is, the sale must be across a state line)” (Federal Trade Commission, n.d.). There are two types of injury that can occur because of violations of the Robison-Patman Act, including Primary Line and Secondary Line. Primary line is the result of one supplier reducing the price within a defined geographic market, thus causing loss to competitors situated within that market. Secondary Line is the result of a supplier offering favored pricing to a single customer within their customer base and not offering those pricing concessions to other customers. An interesting dynamic to the Act includes the sale of product to Non-profit organizations. In select cases, suppliers are afforded the ability to sell their goods to Nonprofits at prices lower than those extended to general customers. This allowance is heavily regulated to ensure it is not being misused, but allows nonprofits to receive significant discounts individual to their business
Supreme Court, that must be satisfied to render a violation of the Robison-Patman Act, these requirements include, “The Act applies to commodities, but not to services, and to purchases, but not to leases. The goods must be of like grade and quality. There must be likely injury to competition (that is, a private plaintiff must also show actual harm to his or her business, and the sales must be "in" interstate commerce (that is, the sale must be across a state line)” (Federal Trade Commission, n.d.). There are two types of injury that can occur because of violations of the Robison-Patman Act, including Primary Line and Secondary Line. Primary line is the result of one supplier reducing the price within a defined geographic market, thus causing loss to competitors situated within that market. Secondary Line is the result of a supplier offering favored pricing to a single customer within their customer base and not offering those pricing concessions to other customers. An interesting dynamic to the Act includes the sale of product to Non-profit organizations. In select cases, suppliers are afforded the ability to sell their goods to Nonprofits at prices lower than those extended to general customers. This allowance is heavily regulated to ensure it is not being misused, but allows nonprofits to receive significant discounts individual to their business