The Robinson-Patman Act of 1936 is antitrust legislation that amends Section 2 of the Clayton Act of 1914, which was designed to prevent monopolies by catching early-stage practices leading to corporate mergers. Another provision of the Clayton Act prohibits price discrimination by a seller where the effect is to injure the competition. The Clayton Act was directed at firms that sold goods at higher prices in some areas and at lower prices in others to the detriment of a smaller local seller; it confined the prohibition on price discrimination to the impact on the seller. Thus, competition among buyers could be affected adversely when certain buyers received lower prices. The Robinson-Patman Act is not limited to just price discrimination. It also covers discrimination in the areas of advertising and other promotional programs, as well as in the area of providing services to competing customers.

Price discrimination occurs when a...