Explain the purpose and scope of the Robinson-Patman Act. What factors will courts use in determining whether or not a violation has occurred? Discuss fully

Answer 1

The Robinson-Patman Act prohibits price discrimination. By outlawing price discrimination, Congress believed that it could protect independent businesses by preventing the formation of monopolies. The legislators assumed that price discrimination was the means by which trusts were built and that discriminatory price concessions were the means by which large retail chains expanded at the expense of smaller independent retailers. Six elements must be proved to establish a price-discrimination case under the Robinson-Patman Act: (1) there must be discrimination in price, that is, a difference in the price at which goods are sold, in the terms and conditions of sale, or in such items as freight allowances or rebates; (2) some part of the discrimination must involve sales in interstate commerce, that is, at least one sale must be across state lines; (3) the discrimination must involve sales for use, consumption, or resale within the United States; (4) there must be discrimination between different purchasers; (5) the discrimination must involve sales of tangible commodities of like grade and quality; and (6) there must be a probable injury to competition. The probable injury to competition is assessed at three levels: (1) the seller level, (2) the buyer level, and (3) the customer level.