Robinson Patman Act Law & Legal Definition

The Robinson-Patman Act was  passed by the U.S. Congress in 1936 to supplement the Clayton Antitrust Act. The act, advanced by Congressman Wright Patman, prohibited any person or firm engaged in interstate commerce to discriminate in price to different purchasers of the same commodity when the effect would be to lessen competition or to create a monopoly. Sometimes referred to as the Anti-Chain-Store Act, this act was directed at protecting the independent retailer from chain-store competition, but it was also strongly supported by wholesalers eager to prevent large chain stores from buying directly from the manufacturers for lower prices.

It aims to ensure that businessmen at the same functional level would stand on equal competitive footing so far as price is concerned.  The main thrust of the act is to make it illegal for a supplier to charge lower prices to certain customers simply because they purchase in larger quantities than other customers. In order to bring the substantive portions of the Act into play, there must be

   1. two or more consummated sales,
   2. reasonably close in point of time,
   3. of commodities,
   4. of like grade and quality,
   5. with a difference in price,
   6. by the same seller,
   7. to two or more different purchasers,
   8. for use, consumption, or resale within the United States or any territory thereof,
   9. which may result in competitive injury. Furthermore,
  10. the "commerce" requirement must be satisfied.