Chapter 8: Price Discrimination
primary line injury
Injury is to competition between the seller granting the discriminatory discount and other sellers
Robinson-Patman Act
a 1936 law that makes illegal price discrimination if it injures competition
direct price discrimination
a clear difference in the price offered to different buyers as seen in the cost of the product; selling to "A" for a dollar and to "B" for two
price discrimination
a difference in price for each parties, can either be direct or indirect
indirect price discrimination
a difference in price offered to different buyers as seen in differences in the charges or benefits surrounding the products; e.g., buyer "a" has to pick up their goods and buyer "b" gets shipped their goods at no extra cost, buyer "a" gets to deffer payment, buyer "b" has to pay upfront
which defenses are complete defenses
all three
Oklahoma's allowed defenses
all three, just like fed statute
commerce requirement
at least one of the sales in question must be across state lines; if you don't have federal jrx, you must rely on state laws
primary price discrimination defenses
cost justification, meeting competition/good faith competition, change in condition
meeting competition/good faith in competition defense
defense stating that seller was meeting a competing offer in good faith to compete; shown by demonstrating 1) price reasonable in marketplace, 2) price is offered by others in the marketplace, or 3) there is a record to show that other sellers were selling at the same amount as you were and buyers wouldn't buy at this price
change in condition defense
defense that market conditions changed in such a way as to justify a lower price being offered; primarily comes up in the area of tech and items frequently become lower in price
like grade and quality
defined as "chemically or physically the same;" this standard is not met if the products are different in any significant way
injury form requirements
has to meet either a primary line injury, a secondary line injury, or a tertiary line injury
most common defense
meeting competition defense
sales requirement
must be one sale at a favored price and another sale at a disfavored price
effects test
must be satisfied in addition to all other elements; does the transaction (1) substantially lessen competition (2) tend to create a monopoly, or (3) tend to injure, prevent, or destroy competition with sellers, buyers or both?
cost justification defense
permits a defendant to avoid liability by showing that differential price treatment was cost justified, as the seller had a higher marginal cost with respect to the disfavored buyer than he did for the favored buyer; restrictive standard, least frequently utilized and successful
prima facie elements for RPA action
price discrimination, two sales, interstate commerce, hard good requirements, effects test, injury form requirements
primary RPA litigants
private parties; DOJ has not filed a claim under the RPA in decades
main effects test factor
tendency to injure, prevent, or destroy competition with sellers, buyers, or both; mention the others, but spend time on this one
secondary line injury
when favored customers of a supplier are given a price advantage over competing customers.
US v. Borden
Price discrimination among customer groups may be justified, but only if customers are classified using characteristics that are directly related to the cost for that customer.
hard good requirement
RPA does not protect in cases of services; commodities must be of like grade and quality
tertiary line injury
Occurs when the recipient of a favored price passes the benefits of the lower price on to the next level of distribution
