Trade Regulation-Robinson-Patman Act-Price Discrimination in the Marketing of Gasoline

The emergence of chain stores and mail-order houses in the 1920’s posed a new threat to competition; this time at the retail level. The quantity purchase discounts which large buyers could exact placed the small independent merchant at a competitive disadvantage so substantial as to cast doubt upon his continued presence in the competitive picture. To prevent these competitive advantages, which were felt to be unfair and undesirable, Congress, in 1936, passed the Robinson-Patman Act which, in part, amended section 2 of the Clayton Act. The effect of the amendment was to tighten the application of the quantity purchase defense so as to require a strict cost justification for price differentials. In short, this legislation was intended to prevent price discrimination destructive of competition among buyers, as well as among sellers.