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Anti-Competitive Discrimination by Sellers Under the Clayton Act

The federal Clayton Act contains prohibitions against various specific anti-competitive practices and is designed to supplement the broad prohibitions of the Sherman Act against anti-competitive agreements and monopolization. Section 2 of the Clayton Act, 15 U.S.C.S. § 13, as amended by the Robinson-Patman Act, specifically prohibits discrimination in the price of commodities or in commissions, allowances, services or facilities if such discrimination is anti-competitive.

 

Section 2(a) of the Clayton Act bars discrimination while Section 2(b) of the Clayton Act provides a “meeting competition” defense to charges of price discrimination. Under Section 2(a), a seller may not charge different prices to different buyers if, in doing so, competition is reduced. However, the seller may defend its price discrimination by showing that any difference in price was the result of a difference in the cost of production or sales for the products being sold. The seller may also defend its price discrimination by showing that it was simply responding to market conditions that changed the ability of the seller to charge the same price.

 

 

Fees and Commissions

 

Various brokerage fees or commissions are prohibited by Section 2(c) of the Clayton Act unless those fees are being paid for services that were provided. Sections 2(d) and (e) bar discrimination in “allowances” such as those found in promotions and advertising. Section 2(f) of the Clayton Act focuses on the purchaser and bars the purchaser from trying to induce illegal price discrimination by the seller in the purchaser’s favor.

 

 

Each of the subsections of Section 2 of the Clayton Act has been the subject of extensive case law and legal literature that should be reviewed for further details regarding the meaning and significance of specific words and phrases in the statute.

Copyright 2012 LexisNexis, a division of Reed Elsevier Inc.

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