We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What is the Robinson-Patman Act?

By Ken Black
Updated: May 17, 2024

The Robinson-Patman Act is a 1936 law that prohibits discriminatory pricing practices. The law specifically prohibits different prices being charged to different buyers, based solely on that fact that the buyers are different. The act is supposed to help smaller buyers who may be at a competitive disadvantage when it comes to competing against larger buyers who buy larger quantities. For example, the Robinson-Patman Act may be invoked if large, big box retailers are being sold goods at a lower rate than other retailers can get them for.

Under the Robinson-Patman Act, goods have to be sold for the same price, no matter who the buyer is, unless certain conditions were met. While the act applies to many different products, some products were exempt from the law. These exemptions included products such as telecommunications services and newspaper advertising. Also the act does not apply unless the products being bought are comparable in quality, and are bought at nearly the same time as the purchase from other buyer.

The overall purpose of the act is to make sure there is fair competition and gives smaller retailers equal footing with larger ones. This may not ensure the survival of the smaller businesses, but it provides them with a way to get the products from the supplier at a price comparable to other retailers. Thus, it gives the smaller retailer a chance to compete based on profit margins.

There are a number of different obstacles that make violations of the Robinson-Patman Act difficult to prove. While the pricing difference may be easily to prove once the information is received, finding a way to get that information could be extremely difficult. Often, the prices larger buyers negotiate are proprietary information, and those prices are not generally available to the general public, and especially not to competitors.

One of the main defenses of the Robinson-Patman Act is that cost differences account for the differences in the prices charged. For example, if it costs a business owner more to deliver a smaller quantity, per unit, then the price can be adjusted accordingly. This leads to one of the main criticisms of the act—that it is almost impossible to enforce when it comes to price discrepancies based on quantity.

The Robinson-Patman Act was not the first or the last act to try to eliminate price discrimination. Its immediate predecessor was the Clayton Antitrust Act of 1914. Congress passed both of these acts in an effort to follow up on the Sherman Antitrust Act of 1890, which tried to break up monopolies. The Robinson-Patman Act was later followed by the Celler-Kefauver Act of 1950, which put further restrictions on monopolies in an effort to increase competition.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.