Unfair Trade Practices – Robinson-Patman Act – Exclusion of Seller’s Broker From Coverage Under Section 2

Petitioners, a brokerage partnership acting as a seller’s agent, sold a commodity to a buyer at five cents below the seller’s normal price. The seller agreed to this reduction only because the petitioners agreed to reduce their commission on the sale from 5% to 3%. Thus 2.75 cents of the reduction was absorbed by the brokers and 2.25 cents was absorbed by the seller. Respondent Federal Trade Commission ordered petitioners to cease and desist from selling at such a reduction on the ground that the reduction in the regular rate of commission constituted an indirect payment by the brokers of part of their commission to the buyer, and as such was unlawful under section 2(c) of the Clayton Act as amended by the Robinson-Patman Act. On review, held, order set aside. Neither the language of section 2(c) nor its legislative history indicates that a seller’s broker is covered by that section. Henry Broch and Company v. Federal Trade Commission, (7th Cir. 1958) 261 F. (2d) 725.