11/09/2009 03:33:09 PM EST
Sullivan on Requirement of Competitive Injury
The Robinson-Patman Act states that it is against the law for those engaged in commerce to discriminate in price, services, or facilities when such discrimination may substantially lessen competition. Beyond the need to demonstrate antitrust injury, competitive injury must also be established. Judicial interpretation has clarified the injury component. In this Analysis, Peter Sullivan explores in depth what is required for a claim of competitive injury. He writes:
Injury to Competition Required
Over the years, interpretation of the Robinson-Patman Act has often turned on whether the court views the Act as protecting not only competition but also competitors. It is absolutely clear that in primary line cases, the Act protects competition. In discussing primary line competition, the Supreme Court in Brooke Group, Ltd. v. Brown & Williamson Tobacco Corp. [509 U.S. 209 (U.S. 1993)], held that primary line injury must consist of injury to competition. The Court based this on the fact that it is axiomatic that the antitrust laws were passed for the "protection of competition, not competitors'."
Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc. [546 U.S. 164 (U.S. 2006)], held that a manufacturer does not engage in secondary line discrimination, even if two dealers receive different prices, unless it is demonstrated that there was discrimination between dealers "contemporaneously" competing to resell to the same retail customer. The Supreme Court based its decision on the premise that: "[i]nterbrand competition, our opinions affirm, is the primary concern of antitrust law" and "the Robinson-Patman Act signals no large departure from that main concern." As a result, the Court will "resist interpretation geared more to the protection of existing competitors than the stimulation of competition." The Court reversed the judgment of the Eighth Circuit because the plaintiff had not shown that it competed with the favored purchasers for the same customers.
Despite these pronouncements from the Supreme Court, the rulings of lower courts have not always been consistent. In the secondary line context, some have held that Robinson-Patman not only protects competition but competitors. While the lower courts are still trying to discern Volvo's implications for secondary line cases, it is clear that in those cases injury to competition can be inferred from injury to a competitor. In FTC v. Morton Salt Co. [334 U.S. 37 (U.S. 1948)], the Supreme Court stated just this:
[I]n enacting the Robinson-Patman Act, Congress was especially concerned with protecting small businesses which were unable to buy in quantities . . . . To this end it undertook to strengthen this very phase of the old Clayton Act . . . . The new provision . . . was intended to justify a finding of injury to competition by a showing of injury to the competitor victimized by the discrimination. In secondary line cases, it is permissible to infer competitive injury from evidence that the favored customer received a significant price reduction over a substantial period of time.
Statutory Tests for Competitive Injury
. . . Section 2(a) sets out three tests for the types of competitive injury it prohibits: (1) lessening of competition, (2) tendency to create a monopoly, and (3) injury, destruction, or prevention of competition by certain persons involved in an act of discrimination. The mere fact that those three tests are set out gives rise to the implication that there is a meaningful distinction among them.
(footnotes omitted)