Yes, Virginia, price discrimination is illegal. The examples you give
generally fall within some of the sections. The Robinson Patman Act, 15 USC
sec. 13, says:
It shall be unlawful for any person engaged in commerce, in the course of
such commerce, either directly or indirectly, to discriminate in price
between different purchasers of commodities of like grade and quality, where
either or any of the purchases involved in such discrimination are in
commerce, where such commodities are sold for use, consumption, or resale
within the United States or any Territory thereof or the District of
Columbia or any insular possession or other place under the jurisdiction of
the United States, and where the effect of such discrimination may be
substantially to lessen
competition or tend to create a monopoly in any line of commerce, or to
injure, destroy, or prevent competition with any person who either grants or
knowingly receives the benefit of such discrimination, or with customers of
either of them: Provided, That nothing herein contained shall prevent
differentials which make only due allowance for differences in the cost of
manufacture, sale, or delivery resulting from the differing methods or
quantities in which such commodities are to such purchasers sold or
delivered: Provided, however, That the Federal Trade Commission may, after
due investigation and hearing to all interested parties, fix and establish
quantity limits, and revise the same as it finds necessary, as to particular
commodities or classes of commodities, where it finds that available
purchasers in greater quantities are so few as to render differentials on
account thereof unjustly discriminatory or promotive of monopoly in any line
of commerce; and the foregoing shall then not be construed to permit
differentials based on differences in quantities greater than those so fixed
and established: And provided further, That nothing herein contained shall
prevent persons engaged in selling goods, wares, or merchandise in commerce
from selecting their own customers in bona fide transactions and not in
restraint of trade: And provided further, That nothing herein contained
shall prevent price changes from time to time where in response to changing
conditions affecting the market for or the marketability of the goods
concerned, such as but not limited to actual or imminent deterioration of
perishable goods, obsolescence of seasonal goods, distress sales under court
process, or sales in good faith in discontinuance of business in the goods
concerned.
(b) Burden of rebutting prima-facie case of discrimination
Upon proof being made, at any hearing on a complaint under this section,
that there has been discrimination in price or services or facilities
furnished, the burden of rebutting the prima-facie case thus made by showing
justification shall be upon the person charged with a violation of this
section, and unless justification shall be affirmatively shown, the
Commission is authorized to issue an order terminating the discrimination:
Provided, however, That nothing herein contained shall prevent a seller
rebutting the prima-facie case thus made by showing that his lower price or
the furnishing of services or facilities to any purchaser or purchasers was
made in good faith to meet an equally low price of a competitor, or the
services or facilities furnished by a competitor.
(c) Payment or acceptance of commission, brokerage, or other compensation
It shall be unlawful for any person engaged in commerce, in the course of
such commerce, to pay or grant, or to receive or accept, anything of value
as a commission, brokerage, or other compensation, or any allowance or
discount in lieu thereof, except for services rendered in connection with
the sale or purchase of goods, wares, or merchandise, either to the other
party to such transaction or to an agent, representative, or other
intermediary therein where such intermediary is acting in fact for or in
behalf, or is subject to the direct or indirect control, of any party to
such transaction other than the person by whom such compensation is so
granted or paid.
(d) Payment for services or facilities for processing or sale
It shall be unlawful for any person engaged in commerce to pay or contract
for the payment of anything of value to or for the benefit of a customer of
such person in the course of such commerce as compensation or in
consideration for any services or facilities furnished by or through such
customer in connection with the processing, handling, sale, or offering for
sale of any products or commodities manufactured, sold, or offered for sale
by such person, unless such payment or consideration is available on
proportionally equal terms to all other customers competing in the
distribution of such products or commodities.
(e) Furnishing services or facilities for processing, handling, etc.
It shall be unlawful for any person to discriminate in favor of one
purchaser against another purchaser or purchasers of a commodity bought for
resale, with or without processing, by contracting to furnish or furnishing,
or by contributing to the furnishing of, any services or facilities
connected with the processing, handling, sale, or offering for sale of such
commodity so purchased upon terms not accorded to all purchasers on
proportionally equal terms.
(f) Knowingly inducing or receiving discriminatory price
It shall be unlawful for any person engaged in commerce, in the course of
such commerce, knowingly to induce or receive a discrimination in price
which is prohibited by this section.
CREDIT(S)
1997 Main Volume
(Oct. 15, 1914, c. 323, S 2, 38 Stat. 730; June 19, 1936, c. 592, S 1, 49
Stat. 1526.)
<> General Materials (GM) - References, Annotations, or Tables>
HISTORICAL AND STATUTORY NOTES
Amendments
1936 Amendments. Act June 19, 1936, amended section generally.
Short Title
1936 Amendments. Act June 19, 1936, which amended this section and added
sections 13a, 13b, and 21a of this title, is popularly known as the
Robinson- Patman Anti-Discrimination Act and also as the Robinson-Patman
Price Discrimination Act.
CROSS
>
>Is price discrimination really illegal? If so, why can airlines, hotels,
>car rental companies, etc. change their prices from hour to hour,
>even minute to minute? A couple of years back, Coca-Cola was
>looking into a soft-drink vending machine that monitored outdoor
>temperatures and adjusted prices accordingly.
>
> Ellen
>
>[EMAIL PROTECTED] writes:
> >Nonsense. The higher price paid by and to scalpers reflects price
> >discrimination. It is only the few hardcore fans or people who need to
> >buy
> >tickets on short notice that are willing pay the higher price. In
>theory,
> >ticket agencies could also reap these extra profits by charging a
> >different
> >price to every consumer according to indvidual willingness-to-pay, but -
> >1]
> >blatant price discrimination is illegal, 2] they lack the informational
> >mechanisim to determine individual willingness to pay. Scalpers are able
> >to
> >determine the latter through the extra-legal channel of selling hot
> >tickets
> >at the venue where those with the highest willingness to pay are likely
>to
> >show up. This is so Econ 1 it is hard to believe your professor is
> >serious.
> >But this probably only reflects the poverty of academic economics when it
> >comes to even elementary considerations of real market behavior.
> >
> >By the way, I wouldn't be surprised is ticket agencies aren't trying to
> >figure out ways to increase their ability to exercise price
>discrimination
> >by collecting or purchasing information on individual performance tastes
> >via
> >internet consumer surveys.
> >
> >-----Original Message-----
> >From: Andrew Hagen [mailto:[EMAIL PROTECTED]]
> >Sent: Monday, March 19, 2001 7:34 PM
> >To: [EMAIL PROTECTED]
> >Subject: [PEN-L:9166] maximization?
> >
> >
> >A professor of mine started class today with an interesting question:
> >why don't ticketing companies raise prices to the level that the market
> >will bear? Often these companies hold a monopoly in selling tickets to
> >all events at a particular venue. Currently the event ticket market can
> >bear higher prices, as evinced by the higher prices paid to scalpers,
> >AKA the secondary market. It's apparent that raising prices would
> >maximize profits in the primary ticket market. Why don't they do so? My
> >professor's proposed answer was: companies do not want to maximize
> >their profits; they only want what they perceive as a reasonable return
> >on their investment. It seems to me like a plausible assertion.
> >
> >Could someone point me toward an article or book that questions the
> >maximization assumption?
> >
> >Thanks,
> >
> >Andrew Hagen
> >[EMAIL PROTECTED]
> >
>
_________________________________________________________________
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