Price Discrimination Law and Legal Definition

Price discrimination is the practice of charging different persons different prices for the same goods or services. Price discrimination is made illegal under the Sherman Antitrust Act. 15 U.S.C. §2, the Clayton Act, 15 U.S.C. §13, and by the Robinson-Patman Act, 15 U.S.C. §§13-13b, 21a, when engaged in for the purpose of lessening competition, such as tying the lower prices to the purchase of other goods or services.

If different prices are charged to different customers for a good faith reason, such as a an effort by the seller to meet the competitor's price or a change in market conditions, it is not illegal price discrimination. Merely charging different prices to different customers is not illegal, when there is no intent to harm competitors.