The Robinson-Patman Act Sections 2(d) and 2(e): Promotional Allowances and the Per Se Rule of Illegality

Authors

Julian Chung, Benjamin N. Cardozo School of Law

Abstract

The Robinson-Patman Act (the "Act"), as part of the antitrust laws, was designed to prevent direct and indirect price discrimination. Specifically, the Act prohibits price discrimination through the use of certain types of discounts granted by sellers to select customers. Sections 2(d) and 2(e) of the Act attempt to further this prohibition by expressly regulating promotional allowances and services. Although Federal Trade Commission ("FTC") enforcement of the sections has declined, private litigation under sections 2(d) and 2(e) of the Robinson-Patman Act has recently been revived. Three recent suits involving the compact disc ("CD") market exemplify this trend. Retailers of CDs instituted Robinson-Patman actions against certain CD manufacturers after they were denied advertising allowances given to other retailers. The plaintiff-retailers claimed that the manufacturers were improperly punishing them for their participation in the sale of used CDs. Although these particular suits were settled out of court, the question remains whether sections 2(d) and 2(e) should be available to strike at allegedly discriminatory advertising policies which may have valid economic justifications.

Keywords

Good Faith, Contracts, Business and the Law, Parents and Children, Trade Regulation, Discrimination, Social Group Issues, Price Discrimination, Sales

Disciplines

Antitrust and Trade Regulation | Civil Rights and Discrimination | Contracts | Law

Recommended Citation

Julian Chung, The Robinson-Patman Act Sections 2(d) and 2(e): Promotional Allowances and the Per Se Rule of Illegality, 16 Cardozo L. Rev. 1795 (1995).
Available at: https://larc.cardozo.yu.edu/clr/vol16/iss5/14