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BUS 5110: Unit 5 Group Assignment
323
University of the People
BUS 5110: Managerial Accounting
Unit 5: Group Assignment
[Robinson-Patman Act of 1936]
Group 5A: Presenter Names
1. Sarita Simon
2. Oleg Romanov
3. Andrew Puga Semeli
4. James Karcher
6th October, 2018
AGENDA
Robinson-Patman Act of 1936 Explained
AGENDA
Case Law FTC vs Morton Salt Co. & Limitations
Our Case
The Act
References
Robinson-Patman Act of 1936
Explanations of the Act
Explanations of the Act
The Purpose of the Act
1
Purpose 1:
The Robison-Patman Act of 1936 is a Federal Anti-Trust law which prohibits the sale or purchase of identical goods at different prices.
2
Purpose 2:
Under this law, "no individual or business can charge different prices for the same goods" (Historyplex Staff, 2017)
- This means that the seller will have to charge the same price to a small retailer as a big relator. This will help prevent small retailers being undercut by larger retailers.
3
Purpose 3:
The Robinson-Patman Act is enforced by both the Department of Justice and the Federal Trade Commission (MacAvoy, n.d).
- Most claims arising out of the Robinson-Patman Act however raised between private parties (MacAvoy, n.d).
Case Law and Limitations
Case Law and Limitations
Robinson-Patman Act of 1936 CASE LAW FTC vs. Morton salt co.
CASE LAW
1
1
In this case, the Federal Trade Commission found that Morton Salt violated the Robinson-Patman Act when it sold its “Blue Label” salt at a discounted price based on the quantity purchased (“Robinson-Patman Act.” n.d).
2
2
Morton Salt argued that they did not violate the Act because the discounted price was available to all buyers in that specified geographical area (“Robinson-Patman Act” n.d).
3
3
The Supreme Court however found that the discounted price based on quantities purchased violated the Act because it gave large buyers a competitive advantage over smaller buyers (“Robinson-Patman Act” n.d).
LIMITATIONS
Robinson-Patman Act of 1936 LIMITATIONS
1. Applies only to:
- Sales of goods or commodities
2. Does not apply to:
- Transactions in services (including licenses or leases)
- Sales of different grade or quality products
- Sales outside the U.S.A.
- Sales between divisions or subsidiaries of the selling company
- Sales directly to the government.
Robinson-Patman Act of 1936 OUR CASE
Our Case & Core Sections of the Act
Our Firm’s Situation
Our Firm’s Situation
1. Our firm has discovered some essential cost information from a competitor in a specific geographic market and from this valuable commercial intelligence, we believe we can accurately estimate the break-even, pricing point of your competitor.
2. Management of the firm believes it can temporarily lower its prices (in just that specific geographic area) to a point just below your competitor’s break-even price point and effectively eliminate it as a meaningful competitor.
Application of the Act
There is no formal violation of law, for example, if firm sells services and want to lower prices in the specified geographical area outside US based on internal competitive information, but it’s better not do:
- Such action undermines the market influencing next-level resellers and end-customers by unstipulated and dishonest price discrimination
- Creates a case for the firm’s management which can became a repeatable practice
- Distorts the firm’s internal culture by demonstrating to employees that dishonest actions are a normal business attitude.
Question
Can we legally achieve this?