Passed in 1936, the Robinson-Patman Act prevents unfair competition by regulating price discrimination. The Act prohibits any person or firm engaged in interstate commerce from discriminating in price to different purchasers of the same commodity if such discrimination would ¿lessen competition.¿ So a person or firm selling commodities must offer the same price to all purchasers.
The Robinson-Patman Act is intended to protect independent retailers from retail chains, who may be able to purchase commodities at a reduced price, due to the large volume of their purchases. The act also benefits wholesalers by preventing retail chains from buying directly from manufacturers at a reduced price.
How Broad Is the Robinson-Patman Act?
The Constitution limits the application of the Act to any activities related to interstate commerce. There are several exceptions to the Act, so check with an attorney if you have questions regarding price discrimination.
What Are the Penalties for Violating the Robinson-Patman Act?
If found guilty, a violator of the Robinson-Patman Act could face a fine of up to $5,000 and imprisonment of up to one year.