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Robinson-Patman Act


Definition: The Robinson-Patman Act is U.S. legislation of 1936 which made rules against price discrimination by firms. Agitation by small grocers was a principal cause of the law. They were under competitive pressure and displaced by the arrival of chain stores. The Robinson-Patman Act is thought by many to have prevented reasonable price competition, since it made many pricing actions illegal per se. For many of its provisions, 'good faith' was not a permitted defense. So it can be argued that it was confusing, vague, unnecessarily restrictive, and designed to prevent some competitors in retailing from being driven out rather than to further social welfare generally, e.g. by allowing pricing decisions that would benefit consumers.


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