"Knowing" Inducement or Receipt of Unlawful Price Concessions

"Knowing" Inducement or Receipt of Unlawful Price Concessions

The Supreme Court opinion, Automatic Canteen Co. v. FTC, brought some order to Section 2(f). Prior to that time, the FTC had not brought an action under Section 2(f). Automatic Canteen promulgated substantive and evidentiary rules for determining what constitutes a prima facie showing of "knowledge" as contemplated by the buyer provision of the Robinson-Patman Act. This Commentary is excerpted from Antitrust Laws and Trade Regulation.

Mr. Sullivan writes: Sellers are not the only persons who may be found liable under the Robinson-Patman Act. Liability for price discrimination under Robinson-Patman also extends to buyers. Section 2(f) of the Clayton Act, as amended by the Robinson-Patman Act, prohibits any person engaged in commerce, in the course of such commerce, from knowingly inducing or receiving a price discrimination illegal under Section 2(a). This section is known as the "Buyer Provision."

It took almost 20 years from the passage of the Robinson-Patman Act for the courts to define the parameters of Section 2(f)'s requirement of a "knowing" inducement. In 1953, the Supreme Court issued its landmark opinion, Automatic Canteen Co. v. FTC, which finally brought some order to Section 2(f). Prior to that time, the FTC had not brought an action under Section 2(f), and the only two reported cases involving Section 2(f) involved private litigants.

Automatic Canteen promulgated substantive and evidentiary rules for determining what constitutes a prima facie showing of "knowledge" as contemplated by the buyer provision of the Robinson-Patman Act. It, however, did not end all of the controversies surrounding Section 2(f). [footnotes omitted]

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