{
  "id": "R40146",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R40146",
  "active": false,
  "source": "EveryCRSReport.com",
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      "source": "EveryCRSReport.com",
      "id": 363559,
      "date": "2009-01-16",
      "retrieved": "2016-04-07T02:53:17.898497",
      "title": "Discriminatory Pricing and the Robinson-Patman Act: Brief Background and Analysis",
      "summary": "The Robinson-Patman (R-P) Act, 15 U.S.C. \u00a7\u00a7 13, 13a, 13b, 21a, makes it unlawful, with certain exceptions, to knowingly sell goods \u201cin commerce,\u201d for use or sale within the United States, at differing prices to contemporaneous buyers of those goods. The \u201cin commerce\u201d 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 \u201cin the stream of commerce\u201d\u2014that is, across state lines.\nEnacted during the Depression at the behest of small grocers who feared the buying power of large and growing chain grocers, Robinson-Patman 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. \nAllegations of Robinson-Patman violations may be defended by asserting and proving either that the differing prices reflect only the cost of the seller\u2019s manufacture or delivery (the \u201ccost justification\u201d 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\u201d 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. \u00a7 13c, and the goods are purchased for the institution\u2019s \u201cown use\u201d; 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 \u201ccharitable\u201d; the Supreme Court has not had occasion to rule on the status of HMOs. \nDisfavored purchasers who prove a Robinson-Patman violation are not, however, automatically entitled to damages on that account. The Supreme Court has held that since, technically, Robinson-Patman prohibits any price differential whose effect \u201cmay be substantially to lessen competition, (emphasis added),\u201d not all proven R-P violations actually damage those who prove them: \u201c[t]o recover treble damages ... a plaintiff must ... make some showing of actual injury attributable to something the antitrust laws were designed to prevent\u201d\u2014that is, a causal connection between the violation and the injury allegedly suffered.\nAlthough there have been some attempts at amending or repealing Robinson-Patman, none has been successful. The Antitrust Division of the Department of Justice has always believed the statute to be inflationary; that it artificially deprives consumers of the advantages of the lower prices that are the aim of the antitrust laws; and that, inter alia, it \u201creduces pricing flexibility [and] discourages the development of efficient distribution systems.\u201d Small businesses, and others, have contended, on the other hand, that their survival depends on the prevention of unjustified price differentials.\nWhether the current economic climate will revive efforts to modify the statute, which has not been enforced by the Department of Justice since its enactment, and has been enforced sporadically by the Federal Trade Commission, is not known.",
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