	The Act and Some Issues It Raises

The Robinson-Patman Act (R-P)(15 U.S.C. In pertinent part, the statute states 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 between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce, where such commodities are sold for use, consumption, or sale within the United States ..., and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with the customers of either of them. Since its enactment in 1936, the Robinson-Patman Act has been less than enthusiastically viewed by the Department of Justice, which believes that the act is not beneficial to consumers. In its 1977 Report on the Robinson-Patman Act, the Antitrust Division noted that
It should not be surprising ... that Robinson-Patman can be shown to have many adverse effects on the economy. Government enforcement of the act, therefore, has always been entrusted to the Federal Trade Commission (FTC), which over the years has acted inconsistently with respect to R-P actions. Other Defenses to Robinson-Patman Challenges

		Meeting Competition

In addition to the commodities-not-of-"like grade and quality" and sales-for-export justifications for price differentials, an additional, affirmative defense permitted to refute the Robinson-Patman illegality of differential pricing is the so-called "meeting competition" defense, which has at least two levels: a defendant may assert (and must prove) that the lower price charged to a favored buyer was selected in order to permit the seller to meet that of a competing seller (primary line competition); or he may assert (and must prove) that the challenged price was necessary in order to enable his buyer to meet the competition of one of the buyer's competitors (secondary line competition). A seller may not, however, knowingly "beat" the prices of a competitor. The Non-Profit Exemption

There is yet another defense to an allegation of unlawful price differentials under the Robinson-Patman Act. The 1938 Nonprofit Institutions Act (15 U.S.C. Further, a number of courts have specifically held that health maintenance organizations, such as HPs, are charitable institutions for tax purposes. Further, the court relied on the expression of the "for their own use" criterion propounded by the Supreme Court in Abbott Laboratories v. Portland Retail Druggist s to decide that the "basic institutional function" of a health plan—providing a "complete panoply" of health-care services, including continuing and preventative services, to its members—requires that "drugs purchased by an HMO ... for resale to its members [be considered as] purchased for the HMO's 'own use' within the meaning of the Nonprofit Institutions Act." To our knowledge, the inclusion of HMOs in the list of entities entitled to take advantage of the "for their own use" language of the Nonprofit Institutions Act has not been judicially repudiated, although the Supreme Court has not yet provided an opinion on the subject. That the successful plaintiff is entitled to damages in the amount of the unlawful price differential is not, however, a foregone conclusion. § 15, which requires as a prerequisite to recovery that one have been 'injured in his business or property'], then, a plaintiff must make some showing of actual injury attributable to something the antitrust laws were designed to prevent. At that time, representatives of small business, and others, contended that retention of Robinson-Patman was essential. Whether the current economic climate will result in a further renewal of efforts to modify or repeal the statute, or whether Congress will determine that statutory intervention is appropriate, is not known at this time.
The Robinson-Patman (R-P) Act, 15 U.S.C. §§ 13, 13a, 13b, 21a, makes it unlawful, with certain exceptions, to knowingly sell goods "in commerce," for use or sale within the United States, at differing prices to contemporaneous buyers of those goods. The "in commerce" 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 "in the stream of commerce"—that is, across state lines.
Enacted 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.
Allegations of Robinson-Patman violations may be defended by asserting and proving either that the differing prices reflect only the cost of the seller's manufacture or delivery (the "cost justification" 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" 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. § 13c, and the goods are purchased for the institution's "own use"; 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 "charitable"; the Supreme Court has not had occasion to rule on the status of HMOs.
Disfavored 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 "may be substantially to lessen competition, (emphasis added)," not all proven R-P violations actually damage those who prove them: "[t]o recover treble damages … a plaintiff must … make some showing of actual injury attributable to something the antitrust laws were designed to prevent"—that is, a causal connection between the violation and the injury allegedly suffered.
Although 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 "reduces pricing flexibility [and] discourages the development of efficient distribution systems." Small businesses, and others, have contended, on the other hand, that their survival depends on the prevention of unjustified price differentials.
Whether 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.