Price Discrimination

Definition of Price Discrimination Price discrimination takes place when a seller charges competing buyers different prices for the same ¡§commodity¡¨ or discriminating in the provision of ¡§allowances¡¨¡Xcompensation for advertising and other services¡Xthat may be violating the Robinson-Patman Act. This kind of price discrimination may hurt competition by giving favored customers an edge in the market that has nothing to do with the superior efficiency of those customers. The Robinson-Patman Act The Robinson-Patman Act, …

…buyers or result from a seller¡¦s attempts to meet a competitor¡¦s prices or services. But since price discrimination also might be used as a predatory pricing tactic -- setting prices below cost to certain customers -- to harm competition at the supplier¡¦s level, antitrust authorities use the same standards applied to predatory pricing claims under the Sherman Act and the FTC Act to evaluate allegations of price discrimination used for this purpose.