The Robinson–Patman Act and Competitive Fairness: Balancing the Economic and Social Dimensions of Antitrust

• Author: Clark R. Silcox,A. Everette MaCintyre
• Published date: 01 September 1986
• Date: 01 September 1986
• DOI: 10.1177/0003603X8603100302
• Subject Matter: Article

The Antitrust Bulletin/Fall 1986

The Robinson-Patman Act

and competitive fairness:

balancing the economic and

social dimensions

of

antitrust

BY CLARK R. SILCOX* and A. EVERETTE MACINTYRE**

611

The

Robinson-Patman

Act, which regulates discrimination in

price

and

services in connection with the sale

of

goods, holds a

unique place in antitrust jurisprudence. Unlike the Sherman and

Clayton Acts, the statutory language in the Robinson-Patman

Act extends beyond the focus on monopolies, tendencies toward

monopoly, cartel behavior, and substantial lessening

of

competi-

tion which is the subject

of

those statutes.

For

the first time

within the umbrella

of

the federal antitrust laws,' the Congress

declared that it was enacting legislation to remedy injury to

McKean, MacIntyre, Wilson &Richardson,

P.c.,

Washington,

D.C. Member, District

of

Columbia and California Bars.

•• McKean, MacIntyre, Wilson &Richardson, P'C., Washington,

D.C. Member, District

of

Columbia, Virginia, and North Carolina

Bars. Former Member, Federal Trade Commission.

"Antitrust laws" are defined at 15

U.S.c.

§12 (1982) to include

the Sherman Act (15

U.S.c.

§§ 1-7), the Wilson Tariff Act (15

U.S.c.

§§ 8-11), and the Clayton Act (15 U.S.C. §§ 12-27 and 29 U.S.C.

§§ 52-53) as amended by the Robinson-Patman Act. The term does not

include the Federal Trade Commission Act (15 U.S.C §§ 41 et seq.)

which prohibits "unfair methods of competition and unfair or deceptive

acts or practices."

<:S

1986 by Federal Legal Publications, Inc.

612 The antitrust bulletin

competitors rather than a generalized injury to competition it-

self.' This dichotomy between the Robinson-Patman Act and

other antitrust statutes is widely recognized.' One

of

the act's

critics, Ward Bowman, for example, in decrying a trend

of

Supreme Court rulings in the 1960s under the Sherman and

Clayton Acts, which, he asserted, had the effect

of

protecting

competitors rather than competition, once urged the judiciary

and the enforcement agencies to stop "Robinson-Patmanizing"

the antitrust laws.'

2The critical language in this regard is:

"It

shall be

unlawful.

to discriminate in price between different purchasers of commodities

of

like grade and quality. . . where the effect of such discrimination may

be.

. . to injure, destroy, or prevent competition with any person who

either grants or knowingly receivesthe benefit of such discrimination, or

with customers

of

either of them

...

" 15 U.S.C. §13(a) (1982)

(emphasis added). There is a general consensus that the Sherman Act

and the Clayton Act, enacted in 1890and 1914respectively, are intended

to preserve the process of competition which promotes the public

welfare as opposed to the private welfare of the market participants.

For

a variety of views on this issue, see generally Hovenkamp, Distribu-

tive Justice and the Antitrust Laws, 51

GEO.

WASH.

L.

REV.

1 (1982);

Lande,

Wealth

Transfers as the Original and Primary Concern

of

Antitrust: The Efficiency Interpretation Challenged, 34

HASTINGS

L.J.

67 (1982); Fox, The Modernization

of

Antitrust, 66

CORNELL

L.J.

1140

(1981).

3H.R.

RER

No. 2287, 74th Cong., 2d Sess. 8 (1936) ("The existing

law has in practice been too restrictive in requiring a showing

of

general

injury to competitive conditions in the line of commerce concerned,

whereas the more immediately important concern is injury to the

competitor victimized by the discrimination"). Accord FTC v. Sun Oil

Co.,

371

U.S. 505, 518-20 (1963); Boise Cascade Corp., 50

ANTITRUST

&"

TRADE

REG.

RER

(BNA) 335, 340 (Feb. 20, 1986); General Motors

Corp., 103 ET.C. 641,

700-01

(1984). But see United States v. United

States Gypsum Co., 438 U.S. 422, 459 (1978) ("The Robinson-Patman

Act should be construed so as to insure its coherence with the broader

antitrust policies").

4Bowman, Contrasts in Antitrust Theory: II, 65

COL.

L.

REV.

417,

421 (1965). The remark is aimed squarely at the Supreme Court's

statement in Brown Shoe Co. v. United States, 370 U.S. 294, 344

(1962):

"It

is competition, not competitors, which the [Clayton] Act

protects. But we cannot fail to recognize Congress' desire to promote

Competitive fairness 613

If

the

protection

of

competitors

from

one

another

was

the

sole objective

of

the

Robinson-Patman

Act,

as claimed by some

of

its critics, Congress could have written a

more

forbidding

statute.

Even

the

language

of

the

proposed

legislation submitted

in 1935

contained

provisos which would justify price differentials

based

on

cost differences, functional discounts,

and

aproviso

which preserved

the

unilateral right to select

one's

own

cus-

torners.' These provisos

purportedly

left

the

proposed

law flexible

enough

to

fit within

the

dynamic

contours

of

acompetitive

economic system whose

hallmark

was

the

ability

of

the

price

mechanism to

adjust

to

rapidly changing economic conditions.

However critical

one

might

be

of

the original legislative proposal,

the

House

and

Senate ultimately restored, to a limited degree,

the

"meeting-the-competition" defense which

the

proponents

of

the

bill felt was partly responsible for rendering

the

original price

discrimination legislation

found

in section 2

of

the

Clayton Act

competition through the protection of viable, small locally owned

businesses." See Bork &Bowman, The Crisis in Antitrust, 65

COL.

L.

REV.

363, 373 (1965).

Congressman Patman's original bill, H.R. 8442, 74th Cong., 1st

Sess., prohibited price differences as follows: "SEC. 2.(a) That it shall

be unlawful for any person engaged in commerce, in the course of such

commerce, either directly or indirectly, to discriminate in price or terms

of sale between purchasers of commodities of like grade and quality,

where either or any of the purchases involved in such discrimination are

in commerce, and where such commodities are sold for use, consump-

tion, or resale within the United States or any Territory thereof or the

District of Columbia or any insular possession or other place under the

jurisdiction of the United States: Provided, That nothing herein con-

tained shall prevent differentials in prices between purchasers depending

solely upon whether they purchase for resale to wholesalers, to retailers,

or to consumers, or for use in further manufacture; nor differentials

which make only due allowances for difference in the cost of manufac-

ture, sale, or delivery resulting from the differing methods or quantities

in which such commodities are to such purchasers sold or delivered:

And provided further, That nothing herein contained shall prevent

persons engaged in selling goods, wares, or merchandise in commerce

from selecting their own customers in bona fide transactions and not in

restraint of trade."