price discrimination price discrimination, which is covered specifically under the Robinson-Patman Act, refers to the practice whereby a supplier, either directly or indirectly, sells at different prices to the same class of channel members to the extent that such price differentials tend to lessen competition. for example, small independent book retailers represented by their trade association,the American Booksellers Association,filed an antitrust lawsuit against major book publishers. the retailers allege that these publishers regularly favor giant chain stores with secret discounts and promotional deals that are not made available to smaller bookstores.
price discrimination price discrimination, which is covered specifically under the Robinson-Patman Act, refers to the practice whereby a supplier, either directly or indirectly, sells at different prices to the same class of channel members to the extent that such price differentials tend to lessen competition. for example, small independent book retailers represented by their trade association,the American Booksellers Association,filed an antitrust lawsuit against major book publishers. the retailers allege that these publishers regularly favor giant chain stores with secret discounts and promotional deals that are not made available to smaller bookstores.
this case actually hinged on the competitive structure of whether the two types of stores were actually in competition with each other in the sale of sewing patterns. subsequent observers of this case believe that if Simplicity had presented a better documented case for its argument of no competition between the variety and fabric stores, it may have won the case.
if is, of course, debatable as to whether the outcome would have been different if the competitive structure issue had simply been better articulated, but the case does bring up the kinds of subtle issues and interpretive difficulties that often emerge when dealing with the issues of price discrimination in channels of distribution as governed by the Robinson-Patman Act. if is no wonder that confusion and inconsistencies have been common in court interpretations involving the Robinson-Patman Act throughout its history. consequently, accurate generalizations about whether specific channel pricing policies and practices constitute price discrimination are difficult to make. A study by Norton marks and Neely Inlow, however, found that the courts have focused mainly on more flagrant violations involving price discrimination. Moreover, large firms (sales exceeding $1 billion) constituted almost 40 percent of the defendants, who came most frequently from the food, tobacco, oil, gas and petrochemical industries.
price maintenance a supplier's attempt to control the prices charged by its channel members for the supplier's products is typically referred as price maintenance or fair trade. the supplier, in effect, dictates the prices charged by channel members to their customers. thus, prices at which products are sold by channel members are not based on the discretion of the channel members in response to market forces, but rather on the requirements of the supplier. Such price maintenance arrangements can help manufacturer gain greater control over the distribution of their products.
strangely enough, this type of anticompetitive price fixing, which is really what such practices amount to,was exempted from federal antitrust legislation through passage of the Miller-Tydings Act in 1937 and the McGuire Act in 1952. These acts exempted retail price fixing by manufacturers in states that permitted vertical pricing arrangements between manufacturers and retailers.
price discrimination price discrimination, which is covered specifically under the Robinson-Patman Act, refers to the practice whereby a supplier, either directly or indirectly, sells at different prices to the same class of channel members to the extent that such price differentials tend to lessen competition. for example, small independent book retailers represented by their trade association,the American Booksellers Association,filed an antitrust lawsuit against major book publishers. the retailers allege that these publishers regularly favor giant chain stores with secret discounts and promotional deals that are not made available to smaller bookstores.price discrimination price discrimination, which is covered specifically under the Robinson-Patman Act, refers to the practice whereby a supplier, either directly or indirectly, sells at different prices to the same class of channel members to the extent that such price differentials tend to lessen competition. for example, small independent book retailers represented by their trade association,the American Booksellers Association,filed an antitrust lawsuit against major book publishers. the retailers allege that these publishers regularly favor giant chain stores with secret discounts and promotional deals that are not made available to smaller bookstores.this case actually hinged on the competitive structure of whether the two types of stores were actually in competition with each other in the sale of sewing patterns. subsequent observers of this case believe that if Simplicity had presented a better documented case for its argument of no competition between the variety and fabric stores, it may have won the case.if is, of course, debatable as to whether the outcome would have been different if the competitive structure issue had simply been better articulated, but the case does bring up the kinds of subtle issues and interpretive difficulties that often emerge when dealing with the issues of price discrimination in channels of distribution as governed by the Robinson-Patman Act. if is no wonder that confusion and inconsistencies have been common in court interpretations involving the Robinson-Patman Act throughout its history. consequently, accurate generalizations about whether specific channel pricing policies and practices constitute price discrimination are difficult to make. A study by Norton marks and Neely Inlow, however, found that the courts have focused mainly on more flagrant violations involving price discrimination. Moreover, large firms (sales exceeding $1 billion) constituted almost 40 percent of the defendants, who came most frequently from the food, tobacco, oil, gas and petrochemical industries.price maintenance a supplier's attempt to control the prices charged by its channel members for the supplier's products is typically referred as price maintenance or fair trade. the supplier, in effect, dictates the prices charged by channel members to their customers. thus, prices at which products are sold by channel members are not based on the discretion of the channel members in response to market forces, but rather on the requirements of the supplier. Such price maintenance arrangements can help manufacturer gain greater control over the distribution of their products.strangely enough, this type of anticompetitive price fixing, which is really what such practices amount to,was exempted from federal antitrust legislation through passage of the Miller-Tydings Act in 1937 and the McGuire Act in 1952. These acts exempted retail price fixing by manufacturers in states that permitted vertical pricing arrangements between manufacturers and retailers.
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