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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