Robinson-Patman Act of 1936

The Robinson-Patman Act amended Section 2 of the Clayton Act and serves as the main statute in price discrimination cases

  • The act extends to both direct and indirect instances of price discrimination
    • Indirect price discrimination occurs when a firm alters credit terms, quality, delivery time, etc.
  • The act only applies “where the effect of such discrimination may be to substantially lessen or prevent competition”
    • Most discrimination cases have no effect on competition and are thrown out
  • The act only applies to the sale of “commodities of like grade and quality”
    • The buyers must believe that the discriminated markets are selling the same goods
    • If the goods in different markets have significantly different costs to produce, the act doesn’t apply
  • We group the major legal cases centered on price discrimination into these categories:
    1. Primary-Line Injury
    2. Secondary-Line Injury
    3. Indirect Price Discrimination