The US Court of Appeals for the Seventh Circuit validates cigarettes manufacturer’s discount program and holds that it does not constitute a violation of the Robinson-Patman Act (R.J.R. Tobacco / Cigarettes Cheaper)

The Robinson-Patman Act has given rise to some truly awful court decisions that have created a seller-buyer environment of sometimes unforgiving price rigidity, as well as complex and difficult-to-comply-with principles about when and to whom sellers must offer price discounts and nonprice promotions. For example: Unlike any other antitrust statute, the Robinson-Patman Act can be violated merely upon proof of a « reasonable possibility » that competition between two buyers might be impaired (the Morton Salt standard). The old Fred Meyer case requires sellers to offer promotions to entities that do not buy from the sellers and with whom the sellers may not even want to have a relationship. The meeting competition defense (which allows a seller to lower its price to a buyer in a

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Michelle K. Fischer, Thomas Demitrack, The US Court of Appeals for the Seventh Circuit validates cigarettes manufacturer’s discount program and holds that it does not constitute a violation of the Robinson-Patman Act (R.J.R. Tobacco / Cigarettes Cheaper), 24 August 2006, e-Competitions Bulletin August 2006, Art. N° 33824

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