The Ambit Group Retail Channel Conference for the Computer Industry
San Jose, California
The views expressed in this speech are those of the author, and do not necessarily represent the views of the Federal Trade Commission or of any of the Commissioners.
I appreciate the opportunity to appear before you today. I should first note that the views I express are my own, and do not necessarily represent the views of the Federal Trade Commission or of any of the Commissioners. As you know, the Commission currently includes Chairman Robert Pitofsky and Commissioners Mary Azcuenaga, Janet Steiger, Roscoe Starek, and Christine Varney. The Commission's generic statute is the Federal Trade Commission Act, which prohibits unfair methods of competition -- the antitrust mission -- and unfair or deceptive acts or practices -- the consumer protection mission. On the antitrust side of the ledger, unfair methods of competition include practices that violate sections 1 and 2 of the Sherman Act. In addition, the Commission is authorized to enforce directly the Clayton Act and the Robinson-Patman amendments to the Act.
The Commission maintains two operating bureaus -- the Bureau of Competition and the Bureau of Consumer Protection -- and ten regional offices across the country. The Bureau of Economics provides economic support to the antitrust and consumer protection missions, and the Office of the General Counsel provides a variety of different types of litigation support. The heads of these offices include William Baer, the Director of the Bureau of Competition; Joan Bernstein, the Director of the Bureau of Consumer Protection; Jonathan Baker, the Director of the Bureau of Economics; and Stephen Calkins, the General Counsel.
I thought I would take this opportunity to discuss the basic terms of the Robinson-Patman Act, and a number of Commission proceedings concerning the Act.
I. The Robinson-Patman Act: General Principles
The history of the Robinson-Patman Act actually begins in 1914, when section 2 of the Clayton Act became the first federal statute that expressly prohibited certain forms of price discrimination. In 1936, section 2 of the Clayton Act was amended by the Robinson-Patman Act, and it became a far more complex statute. 1 It is important to consider the context in which the amendments were adopted. In 1936, Congress believed that large firms could dominate markets through predation and other forms of economic warfare directed against smaller firms, and felt that "power buyers" such as large retailers could use their market power to extract price concessions from manufacturers and other sellers that were unavailable to their smaller competitors. As the Commission has stated, [t]he major legislative purpose behind the Robinson- Patman Act was to provide some measure of protection to small independent retailers and their independent suppliers from what was thought to be unfair competition from vertically integrated, multi-location chain stores. 2
Consistent with the context in which the Robinson-Patman Act was created, the Supreme Court and the Commission have concluded that the Act is based on one fundamental principle:
to assure, to the extent reasonably practicable, that businessmen at the same functional level would stand on equal competitive footing so far as price is concerned. 3
To that end, reduced to their essentials without their exceptions -- and provided that a number of jurisdictional requirements are satisfied -- section 2(a) of the Act requires sellers to sell to everyone at the same price, while section 2(f) of the Act requires buyers with the requisite knowledge to buy from a particular seller at the same price as everyone else. Sections 2(c), 2(d), and 2(e) -- as elaborated by the Commission through the FTC Act -- prohibit sellers and buyers from using brokerage, allowances, and services to accomplish indirectly what sections 2(a) and 2(f) directly prohibit.
Interpretation and elaboration of these basic principles are of course crucially important, because maximizing consumer welfare and economic efficiency in a free market economy necessarily means that different firms perform differently. In my view, our objective therefore should be to interpret the Robinson-Patman Act in as economically sound a fashion as possible. The Supreme Court has on several occasions stated that the Act must be interpreted consistently with the "broader policies of the antitrust laws." 4 For example, the Court has warned against interpretations of the Robinson-Patman Act which "extend beyond the prohibitions of the Act# and, in so doing, help give rise to a price uniformity and rigidity in open conflict with the purposes of other antitrust legislation. . . ." 5
Similarly, the Commission has concluded that [t]he interpretation and application of the Act should be consistent with the interpretation and application of the other antitrust laws whenever possible. 6
In 1980, when he was previously a Commissioner, Chairman Pitofsky noted that [i]n recent years, there has been increasing recognition of the necessity to reconcile the Sherman Act's demand for competition with the Robinson-Patman Act's legitimate concern that small business not be done in by powerful rivals who are in a position to coerce lower prices from manufacturers. 7
The best way to effectuate this objective is to interpret the Act so as to emphasize the prohibition of discriminatory practices that injure or threaten to injure competition. The Supreme Court has in the past stated that the Act prohibits price discrimination that creates a "reasonable possibility that a price difference may harm competition."8 In its most recent decision interpreting the Act -- Brooke Group Ltd. v. Brown & Williamson Tobacco Corporation -- the Court confirmed that [b]y its terms, the Robinson-Patman Act condemns price discrimination only to the extent that it threatens to injure competition. . . . Congress did not intend to outlaw price differences that result from or further the forces of competition. 9
Of course, effects on individual competitors frequently can be of evidentiary value in conducting investigations and prosecuting cases under the Act. Moreover, the Act itself contains a number of defenses -- in particular, the meeting competition and cost justification defenses -- that help to make it more consistent with the maximization of consumer welfare and economic efficiency. 10
That leads us to a discussion of the specific provisions of the Robinson-Patman Act. I should first note that the Act requires allegedly discriminatory transactions to satisfy certain jurisdictional prerequisites before its substantive prohibitions apply. Earl Kintner, at one time the Chairman of the Commission, summarized these jurisdictional requirements in the following fashion:
In order to bring the substantive portions of the Act into play, there must be
- two or more consummated sales,
- reasonably close in point of time,
- of commodities,
- of like grade and quality,
- with a difference in price,
- by the same seller,
- to two or more different purchasers,
- for use, consumption, or resale within the United States or any territory thereof,
- which may result in competitive injury. Furthermore,
- the "commerce" requirement must be satisfied.11
These jurisdictional elements are interpreted strictly and technically, and three of them may be of particular interest. First, as the first element indicates, the plaintiff must establish that actual sales occurred. The Act does not apply, for example, to long term leases; to mere offers to sell; to acting as an intermediary between a seller and its customers; or to licensing computer software. 12 Second, as the third element indicates, the Act applies only to commodities; it does not apply to intangible products. Thus, for example, electricity has been classified as a commodity subject to the Act, because "[e]lectric power can be felt, if not touched. It is produced, sold, stored in small quantities, transmitted, and distributed in discrete quantities." 13
By contrast, courts have concluded that the Act does not apply to intangible products such as cellular telephone service and cellular telephone activation service; 14 the printing of comic books;15 newspaper advertising; 16 real estate leases; 17 long distance voice telecommunications services; 18 and cable television service. 19 When a transaction involves both the sale of goods and the sale of services, the Act applies "only if the 'dominant nature' of the transaction is a sale of goods."20
Third, as the sixth element indicates, the two sales at issue must have been made by the same seller. Supreme Court Justice Stephen Breyer addressed this issue, among others, in one of his last opinions for the First Circuit Court of Appeals. 21 In Caribe BMW, the plaintiff, a BMW retailer in Puerto Rico, alleged that a wholly owned North American subsidiary of BMW sold automobiles to competing retailers at lower prices than those at which BMW itself sold automobiles to the plaintiff, in violation of section 2(a) of the Act. 22 The District Court had dismissed the complaint, on the ground, among others, that the plaintiff had failed to allege two sales to different purchasers by a single seller. 23 The Court of Appeals reversed, concluding that the manufacturer and its wholly owned subsidiary constituted a single seller, whether or not the manufacturer actively controlled the sales practices of the subsidiary. 24 The Court based this conclusion on the Supreme Court decision in Copperweld Corp. v. Independence Tube Corp., in which the Court concluded that a parent and its wholly owned subsidiary -- as a single entity -- could not, as a matter of law, conspire with each other in violation of Section 1 of the Sherman Act. 25 The Court expressly declined to follow an earlier Fifth Circuit Court of Appeals determination that whether a parent and a wholly owned subsidiary could be characterized as a single seller under the Act was a function of the extent to which the parent controlled the customer and pricing decisions of the subsidiary. 26
The Act contains six substantive provisions. Section 2(a) prohibits a seller from discriminating in price between two or more competing buyers in the sale of commodities of like grade and quality, where the effect of the discrimination "may be substantially" to
- "lessen competition...in any line of commerce;" or
- "tend to create a monopoly in any line of
- "injure, destroy, or prevent competition with any
person who grants or knowingly receives the
benefit of the discrimination, or with the
customers of either of them."
15 U.S.C. 13(a). The crucial question, with respect to section 2(a), is the type and extent of injury to competition that can satisfy this standard. 27 Two types of possible injury are most commonly alleged. The first is often referred to as "primary line injury," because the actual or threatened injury is to competition between the seller granting the discriminatory discount and other sellers. 28 In Brooke v. Brown & Williamson, the Supreme Court held that primary-line competitive injury under the Robinson- Patman Act is of the same general character as the injury inflicted by predatory pricing schemes actionable under 2 of the Sherman Act. . . . With whatever additional flexibility the Robinson-Patman Act standard may imply . . . two prerequisites to recovery remain the same. First, a plaintiff seeking to establish competitive injury resulting from a rival's low prices must prove that the prices complained of are below an appropriate measure of its rival's costs. . . [Second, the plaintiff must demonstrate] . . . that the competitor had a reasonable prospect, or, under 2 of the Sherman Act, a dangerous probability, of recouping its investment in below-cost prices. 29
Similarly, the Commission has held that prima facie primary line injury can be established, subject to rebuttal, by showing that a seller engaged in predatory conduct, such as by making sales at prices below average variable cost for a significant period of time. 30
The second type of injury is often referred to as "secondary line injury," because the actual or threatened injury is to competition between the favored customer of the seller who receives the discriminatory price and the seller's disfavored customers. 31 The existence of this type of injury may be established directly by evidence of displaced sales. It also may be established "prima facie by proof of a substantial price discrimination between competing purchasers over time;" 32 that is, it "may be inferred from evidence that some purchasers had to pay their supplier 'substantially more for their goods than their competitors had to pay.'" 33 The inference of injury can be overcome by "evidence breaking the causal connection between a price differential and lost sales or profits." 34 Evidence on that score might include a showing that the advantaged and disadvantaged buyers operate in different geographic markets or at different levels of distribution, or for other reasons are not in competition with each other.
As I mentioned earlier, the Act contains a number of exceptions to the prohibitions embodied in section 2(a). First, section 2(a) itself contains a cost justification defense. It permits price differentials that "make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities" in which the commodities are "sold or delivered." Thus, a seller may charge different prices to different purchasers where "justified by savings in the seller's costs of manufacture, delivery or sale."35 If properly interpreted, this exception can ensure that the Act prohibits only price differences that are discriminatory in an economic sense. 36 It is not easy to establish this defense in the usual case, however; as the Supreme Court noted in Texaco v. Hasbrouck, a defendant typically must establish through "rigorous accounting" that the price differential at issue precisely equals the additional costs it incurs in selling to the plaintiff.37 Second, section 2(a) permits price differences due to "changing conditions affecting the market for or marketability of the goods concerned," such as the deterioration of perishable goods, the obsolescence of seasonal goods, distress sales under court process, or "going out of business" sales.
Third, section 2(a) permits price differences that represent a good faith effort to meet the competition of one or more other firms. As you might expect, it has not been easy to define the precise contours of this defense. However, the essential principle is that firms should be able to lower their prices, in order to match the prices of their rivals, without violating section 2(a). The Supreme Court has said that the standard is whether the seller can show the existence of facts which would lead a reasonable and prudent person to believe that the granting of a lower price would, in fact, meet the equally low price of a competitor. 38
More recently, the Court has determined that "territorial price differences that are in fact responses to competitive conditions" satisfy the requirements of the defense. 39 The Commission has similarly concluded that "if a seller has a good reason to believe that competing firms are charging lower prices in a particular market, it may respond with comparably low prices on a territorial basis [that is, throughout the market], rather than on a customer-by-customer basis." 40 Moreover, the seller may reduce prices in order to secure new customers, as well as to retain old ones. 41
Fourth and finally, a seller can defend against allegations that it has violated section 2(a) by arguing that the lower price at issue was functionally available to the allegedly disfavored purchaser, even though that purchaser presumably did not take advantage of it. 42Some courts have held, however, that the seller involved has not made favored treatment "available" to a disfavored customer if that customer "does not know about the favored treatment." 43
Section 2(f) of the Act applies these same principles to the conduct of buyers, by making it unlawful for a buyer "knowingly to induce or receive a discrimination in price" prohibited by other parts of the Act. As a threshold matter, liability does not attach unless the buyer knew or should have known that the discrimination it induced or received was an illegal discrimination. 44 Moreover, buyer liability under Section 2(f) is completely derivative of seller liability under Section 2(a). The injury to competition requirements of Section 2(a) therefore apply to Section 2(f) as well, so that secondary line competitive injury may be rebuttably inferred from "substantial price discrimination between competing purchasers over time." 45 However, a buyer cannot be found liable under Section 2(f) unless a price discrimination that violates Section 2(a) can be established, and the meeting competition, cost justification, and changed conditions defenses cannot be sustained. 46
One of the most recent Supreme Court decisions addressing the Robinson-Patman Act is Texaco v. Hasbrouck, which dealt with the permissibility of functional discounts. A functional discount is one given to a purchaser based on its role in the supplier's distribution system, reflecting, at least in a generalized sense, the services performed by the purchaser for the supplier. 47 The Hasbrouck decision provides some important guidance as to the manner in which the Court currently views the Act as a whole. In Hasbrouck, twelve independent Texaco retailers in Spokane, Washington sued Texaco, alleging that while Texaco sold gasoline to them at retail tank wagon prices, it sold gasoline to two Spokane distributors -- Gull Oil Company and Dompier Oil Company -- at prices 3.65 to 6 cents lower than the retail tank wagon price, and in addition provided a hauling allowance to at least one of the distributors. The distributors in turn both sold gasoline to retailers and sold gasoline at retail themselves, in competition with the twelve independent Texaco retailers.48 Over a nine-year period, this disparity apparently produced a significant improvement in the fortunes of the distributors, and a significant decline in the fortunes of the retailers. In one document placed in evidence, a Texaco vice-president characterized the effects of the arrangement in the following fashion:
We believe that the dramatic shift in gasoline sales from the independent retailer classes of purchaser to the independent distributor classes of purchaser can be explained almost entirely by the magnitude of the distributor discount and the hauling allowance.49
At trial, the jury ultimately found for the twelve plaintiff retailers and assessed total damages in the amount of $450,000. In denying Texaco's motion for judgment notwithstanding the verdict, the District Court concluded that the presumed legality of functional discounts had been rebutted by evidence that the amount of the discounts to Gull and Dompier was not reasonably related to the cost of any function that they performed.50
The Court of Appeals affirmed.
On appeal, the Supreme Court noted that the Robinson-Patman Act contains no express reference to functional discounts, and that the independent Texaco retailers had to establish, in addition to the usual jurisdictional prerequisites (which Texaco did not dispute on appeal), (1) that Texaco had discriminated in price between the distributors on the one hand and the retailers on the other, and (2) that the discrimination had the prohibited effect on competition. 51 With respect to the first question, the Court determined that a price differential "that merely accords due recognition and reimbursement for actual marketing functions" is not illegal, 52 and "a functional discount that constitutes a reasonable reimbursement for the purchasers' actual marketing functions will not violate the Act." 53 The Court also emphasized that mathematical exactitude is not required in justifying a discount. Citing an "extraordinary absence of evidence to connect the discount [at issue] to any savings enjoyed by Texaco," the Court concluded that Texaco had engaged in price discrimination; 54 that is, its "lower prices to Gull and Dompier were discriminatory throughout the entire nine-year period."55 With respect to the second question, the Court concluded that at least Gull, and apparently Dompier as well, were selling at retail during that entire period, and that "the discounts substantially affected competition throughout the entire market" and "injured each of the respondents."56 The Court therefore affirmed the verdict against Texaco.
The Hasbrouck decision makes it clear that functional discounts are permissible under the Robinson-Patman Act when they are a reasonable reimbursement for actual marketing functions performed by the favored purchasers. The Court indicated that it would not countenance "a functional discount completely untethered to either the supplier's savings or the wholesaler's costs," 57 but it also indicated that establishing "a causation defense in a functional discount case does not demand the rigorous accounting associated with a cost justification defense." 58 The Court found it unnecessary to decide, however, whether the amount of the discount should be reasonably related (1) to the costs incurred by the buyer in performing the services at issue, as the Commission had suggested in the Doubleday case, 59 or instead (2) to the cost savings that accrued to the seller as a result of the buyer performing the services at issue, as the Commission had later suggested in the Mueller decision 60 which overruled Doubleday.
As I mentioned earlier, sections 2(c), 2(d), and 2(e) of the Robinson-Patman Act are designed primarily to ensure that firms cannot circumvent the proscriptions of sections 2(a) and 2(f) by granting discriminatory discounts indirectly, through the provision of brokerage, advertising and promotional allowances, or services. Section 2(c) prohibits a seller from paying to or receiving from a buyer certain commissions, brokerage fees, or other compensation, "or any allowance or discount in lieu thereof, except for services rendered." 61Sections 2(d) and 2(e) prohibit a seller from granting advertising and promotional allowances or services to particular customers unless the same allowances or services are available to all competing customers on proportionally equal terms. 62 The services or payments at issue must be in connection with the "processing, handling, sale, or offering for sale" of a product by the customer, i.e., [they] must bear a nexus to the resale or preparation for resale by the retailer. 63
All three subsections create greater or lesser degrees of per se liability (1) because proof of likely adverse competitive effects need not be adduced in order to establish a violation; (2) because there are no defenses to a prima facie section 2(c) case; and (3) because only the meeting competition defense can be raised in response to a prima facie section 2(d) or section 2(e) case. 64
II. Commission Proceedings
With these standards in mind, I can describe three Commission proceedings relating to the Robinson-Patman Act. The first involves six administrative complaints issued by the Commission in late 1988 in the Harper & Row matter. The complaints allege that the respondent book publishers -- Harper & Row, Hearst, Macmillan, Putnam Berkley, Random House, and Simon & Schuster -- violated sections 2(a), 2(d), and 2(e) of the Act. More particularly, the complaints allege that, through discriminatory pricing practices, the respondent publishers sell or distribute books at lower prices to some retailers than to others. The complaints further allege that the favored retailer purchasers include the nation's three largest bookstore chains -- Waldenbooks, B. Dalton, and Crown Books -- and that the disfavored purchasers include most, if not all, of the nation's independent booksellers.
The complaints allege that for certain books the publishers use pricing schedules under which the price is determined by the number of books in individual orders; on larger orders, purchasers allegedly pay a lower price per book than on smaller orders. The complaints allege that the publishers treat orders placed by the three chains as a single order, even if the books are separately packed, itemized, and shipped to individual chain outlets. The complaints further allege that the chains pay lower prices per book than independent bookstores that receive shipments as large as or larger than the shipments to individual chain outlets.
The complaints also allege that some or all of the publishers (1) have granted favored purchasers additional discounts that are not shown on published pricing schedules; and (2) have provided allowances, services, or facilities for promotion, display, and inventory control to favored purchasers without making such allowances, services, and facilities available on proportionally equal terms to all purchasers. The complaints allege that the higher prices paid by disfavored purchasers have, among other things, limited their ability to compete with favored purchasers for retail locations, expansion opportunities, and sales to consumers, and have injured, destroyed, or prevented competition between favored and disfavored purchasers. The publishers maintain in response that the discounts are cost-justified; that is, for example, that they save selling expenses because their representatives need only visit the headquarters of a chain rather than hundreds of individual stores. These six matters have been withdrawn from adjudication for the consideration of consent agreements negotiated with each of the respondents.
A second Commission proceeding of interest is the Boise Cascade matter, an administrative case involving section 2(f) of the Robinson-Patman Act, which ended in 1991 with a negotiated settlement after an administrative trial, two Commission opinions, and an opinion from the Court of Appeals for the District of Columbia Circuit. The case arose in the office products industry; that is, the manufacture, distribution, and sale of products such as stationery, office supplies and office furniture. There are basically four industry levels: manufacturers, wholesalers, retailers, and end users (the ultimate consumers). Dual distributors such as Boise purchase products from manufacturers and resell them both to retailers and to end users. 65
The Commission issued the complaint against Boise in 1980. 66 The complaint alleged that Boise knowingly induced or received functional discounts from some office product manufacturers, and that the discounts were discriminatory because they were not granted by the manufacturers to retailers that compete with Boise for retail sales, in violation of section 2(f) of the Robinson-Patman Act and section 5 of the FTC Act.67 Boise received a wholesaler discount on purchases of office products from six selected manufacturers, so that the prices it paid were from 5 to 33 percent lower than the prices at which these manufacturers sold goods of like grade and quality to competing retail dealers. 68 Boise received these discounts on all of the goods it purchased from these six manufacturers, regardless of whether the specific goods were resold by Boise to other retailers or to end users. 69Boise maintained, however, that the discount it received on goods resold to end users simply compensated it for services it provided which the allegedly disfavored dealers did not provide. 70
After an administrative trial, the Commission considered an appeal by Boise from the administrative law judge's determination that Boise had violated both the Robinson-Patman Act and the FTC Act. The Commission relied on the Morton Salt inference of the requisite competitive injury -- from "proof that manufacturers of office products engaged in substantial price discrimination between competing purchasers over time" 71 -- to conclude that the requisite "reasonable possibility that [the] price difference[s] may harm competition" 72had been established. The Commission determined that Boise had knowingly received unlawful discounts, in violation of section 2(f), and issued an order requiring Boise to cease and desist from inducing, receiving, or accepting from any seller a net price for office products that it knew or had reason to know was below the net prices offered to competing retailers for office products of like grade and quality. 73
Boise appealed, and the Court of Appeals for the District of Columbia Circuit granted the petition for review. 74 The Court held that the rebuttable inference of competitive injury established by Morton Salt and Falls City can be overcome "by evidence showing an absence of competitive injury within the meaning of Robinson-Patman."75 The Court felt that the Commission should consider evidence that the selected dealers were not doing that poorly; evidence that the challenged discounts had been in place for a long time without "measurable competitive effects;" and an absence of evidence that Boise had coerced more favorable discounts than those available to many other wholesalers.76 The Court therefore remanded the case to the Commission for additional proceedings to determine whether Boise's rebuttal evidence overcame the inference of competitive injury the Commission had previously drawn. 77
After directing the parties to submit additional briefs, hearing oral argument, and reviewing the record, in late 1990 the Commission issued a second opinion. The Commission analyzed the Boise rebuttal evidence to which the Court of Appeals had referred, and concluded that it failed to overcome the inference of competitive injury established by the evidence that Boise purchased office products at sustained and substantial discriminatory prices from the manufacturers over a competitively significant period of time. 78
The Commission therefore concluded once again that Boise had violated section 2(f), and reissued the order it had issued in 1986. Boise once again appealed that decision to the Court of Appeals. The Commission and Boise thereafter settled the case with the issuance of a revised administrative order that prohibits Boise from knowingly receiving wholesaler discounts on the portion of its purchases that it makes from manufacturers for resale to end users.
The third relatively recent proceeding involves the Federal Trade Commission Guides for Advertising Allowances and Other Merchandising Payments and Services. 79 The Guides are more commonly known as the Fred Meyer Guides, because the Commission initially issued them in response to a Supreme Court suggestion in one of its opinions that the Commission should explain to sellers how they should make proportionate allowances available both to direct-buying retailers and to competing retailers buying through wholesalers. 80 Although the Guides do not have the force of law, they are intended to provide assistance to businesses seeking to comply with sections 2(d) and 2(e) of the Robinson-Patman Act.
The Guides address a number of issues raised by sections 2(d) and 2(e), including the types of practices to which the sections apply; how to define "seller," "customer," "competing customers," interstate commerce, "services" and "facilities;" the concept of proportionally equal terms; the concept of availability of offers to competing customers; wholesaler or third party performance of seller obligations; steps sellers must take to check customer use of payments made; customer and third party liability; the contours of the meeting competition defense; and the absence of a cost justification defense. The Guides were revised in 1972, and a number of significant changes in the relevant case law have occurred since then. For example, the 1972 Guides indicated that the meeting competition defense was valid only if "the payments were made or the services were furnished in good faith to meet equally high payments made by a competing seller to the particular customer, or to meet equivalent services furnished by a competing seller to the particular customer."81 The Supreme Court and the Commission subsequently determined that the meeting competition defense may be used to defend offers made on an area-wide basis.82 In addition, the 1972 Guides did not suggest the need for a particularly close connection between promotional allowances or services and the resale of the products involved, consistent with the Commission decision in Alterman Foods, Inc. However, in its 1980 decision in Herbert R. Gibson, Sr., and its 1984 decision in General Motors Corporation, the Commission in effect overruled that aspect of the Alterman Foods decision, by emphasizing the need to establish a close connection between a promotional allowance or service and a resale, in holding that promotional assistance for a trade show did not violate section 2(d).83
In order to consider issues such as these, in October 1988 the Commission published for comment a number of staff recommendations for changes in the Guides. Hundreds of individuals and organizations filed comments in response. The section of the Guides that generated the most comment was the section concerning how to determine whether a seller is making allowances or services "available on proportionally equal terms to competing customers." The two traditional bases are "customer's costs" -- in which the seller offers an allowance that is an equal proportion of each customer's cost of providing a promotional service -- and "seller's cost" -- in which the seller offers an equal amount per unit purchased by each competing customer.84 One proposal considered in 1988 was to provide that proportionality could also be based on the actual value that different promotional services produce for the seller. Under this approach, a seller would have been able to reimburse different percentages of the cost of advertising in different media -- such as newspaper and television advertising -- to reflect the seller's judgment as to the different value, per dollar spent, that each medium produces.
In August 1990 the Commission issued a revised set of guidelines, which updated the previous version in several respects, in an effort to make the Guides more consistent with the other antitrust laws, the legislative history of the Act, and with the case law interpreting it.85
First, revised section 240.2 emphasizes the applicability of sections 2(d) and 2(e) only to allowances and services that facilitate the resale of a product, as distinguished from allowances or services that facilitate the original sale from the seller to the first buyer. In addition, revised section 240.5 -- which defines "competing customers" -- now includes an example indicating that sellers may not justify disparate treatment based on class of trade. Thus, if a manufacturer sells a brand of laundry detergent for home use; in a particular metropolitan area, that detergent is sold by both a grocery store and a discount department store; and these two stores compete with each other, then any allowance, service or facility the manufacturer makes available to the grocery store should also be made available on proportionally equal terms to the discount department store. 86
The Commission also determined not to adopt the value approach to proportionality in section 240.9 of the revised Guides, and instead to retain the existing standard, which was that any method that treats competing customers on proportionally equal terms may be used.87 Section 240.9, however, now describes in more detail how promotional allowances can legitimately be granted, and indicates that the easiest approach is to base the payments made -- or the services furnished -- on the dollar volume or the quantity of the product purchased during a specified period. 88 As a corollary, section 240.9 provides that [t]he discriminatory purchase of display or shelf space, whether directly or by means of so-called allowances, may violate the [Robinson-Patman] Act, and may be considered an unfair method of competition in violation of section 5 of the Federal Trade Commission Act. 89
The Commission indicated that payments for preferential position within a store typically enhanced resale efforts, and hence fell within the contours of section 2(d). By contrast, the Commission felt that section 2(d) did not apply as readily to payments for admittance to a store in the first instance. 90
The Commission also modified section 240.10 -- the "availability to all competing customers" provision -- in some respects. The Commission endorsed the principle that "[s]ellers should be permitted to offer promotional programs as they see fit, providing that at least one functionally available, proportionally equal alternative is made available to each competing customer." While the Commission retained the requirement that a seller notify all competing customers of promotional offers, it deleted the requirement that sellers make spot checks every ninety days to verify the effectiveness of their notifications. 91 In addition, the Commission retained the requirement in section 240.12 that sellers take reasonable precautions to see that the services paid for are furnished -- and that the seller is not overpaying for them -- and the requirement that customers should expend the allowances they receive solely for the purpose for which they are given. However, the Commission deleted the requirement that sellers verify non-proportionally equal payments, reasoning that such verification would not, in any event, constitute a defense to section 2(d) liability. 92
The Commission also revised section 240.13 to provide that buyers may be liable for knowingly receiving a discriminatory allowance or service obtained, inter alia, "'indirectly through deductions from purchase invoices or other similar means.'" 93 Section 240.14 of the revised Guides includes a revised discussion of the meeting competition defense, which conforms to the Supreme Court and Commission cases mentioned above. 94 Finally, the 1972 Guides had included an example indicating that if a seller conditioned the provision of co-op funds on a retailer's use of a particular resale price in the advertising at issue, that practice constituted a per se violation of the antitrust laws. Consistent with its earlier rescission of a policy statement on the subject, the Commission deleted that example from the revised Guides, and instead indicated that a rule of reason approach to such practices would be appropriate. 95
As the foregoing discussion suggests, a variety of factors determine whether the manner in which particular promotional allowances or services are provided may constitute a violation of the Robinson-Patman Act. As an initial step, one would have to establish the elements set forth in section 240.2 of the Guides. In order to do so, one would have to establish in particular that the requisite "seller" (the manufacturer) and "competing customers" components described in sections 240.3 and 240.5 are satisfied. The next step is to satisfy the resale requirement embodied in sections 2(d) and 2(e); section 240.7 provides that "the services or facilities [should] be used primarily to promote the resale of the seller's product by the customer." Section 240.7 identifies a number of examples, including cooperative advertising; handbills; demonstrators and demonstrations; catalogues; cabinets; displays; prizes or merchandise for conducting promotional contests; and special packaging, or package sizes.96
If these and the other requirements described in section 240.2 are satisfied, section 240.9 of the Guides provides that the seller should make the services or facilities available to competing buyers on proportionally equal terms; such terms arguably might include the terms of payment for promotional services performed, and the manner in which performance of those services is established. As a corollary, section 240.10 provides that a seller should take reasonable steps to ensure that services and facilities are useable in a practical sense by all competing customers. In addition, section 240.12, as revised, provides that [t]he seller should take reasonable precautions to see that the services the seller is paying for are furnished and that the seller is not overpaying for them. The customer should expend the allowance solely for the purpose for which it was given. If the seller knows or should know that what the seller is paying for or furnishing is not being properly used by some customers, the improper payments or services should be discontinued. 97
As I also noted earlier -- and as section 240.13 of the Guides indicates -- section 2(f) does not prohibit buyer inducement or receipt of allowances or services that are unlawful pursuant to sections 2(d) or 2(e), and there is therefore no private right of action against either type of buyer conduct. However, the Commission has determined that buyer inducement or receipt of illegal allowances or services constitutes an unfair method of competition in violation of section 5 of the FTC Act.98 Thus, section 240.13 provides that
the Commission may proceed . . . against a customer who knows, or should know, that it is receiving a discriminatory price through services or allowances not made available on proportionally equal terms to its competitors engaged in the resale of a seller's product. Liability for knowingly receiving such a discrimination may result whether the discrimination takes place directly through payments or services, or indirectly through deductions from purchase invoices or other similar means. 99
The Commission has in the past adopted industry-specific rules and guides that apply the foregoing standards to specific industries. The Commission recently repealed two such standards -- the Greeting Card Guides and the Tailored Clothing Rule -- because it concluded that the more general principles embodied in the Fred Meyer Guides should govern those two industries.100
I hope that the foregoing review is useful. I would like to encourage all of you to contact us if you have questions or would like to forward information concerning any practice you believe may violate the antitrust laws. Many of our investigations, particularly in the nonmerger area, begin with inquiries or complaints from firms such as those you represent. The Commission is strongly committed to the enforcement of the statutes for which it is responsible, and we appreciate your support.
1 The relevant provisions are set forth in sections 2(a)- (f) of the Clayton Act, 15 U.S.C. 13(a)-(f); references to the Robinson-Patman Act in the text therefore are intended to be to section 2, as amended by the Robinson-Patman Act.
2 Boise Cascade Corp., 107 F.T.C. 76, 210 (1986), citing General Motors Corp., 103 F.T.C. 641, 693-96 (1984), rev'd and remanded on other grounds, 837 F.2d 1127 (D.C. Cir. 1988), on remand, 113 F.T.C. 956 (1990), appeal dismissed pursuant to stipulation.
3 Boise Cascade Corp., 107 F.T.C. at 205, quoting FTC v. Sun Oil Co., 371 U.S. 505, 520 (1963).
4 Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., ___ U.S. ___, CCH 70,277 at 70382 (June 21, 1993), quoting Great Atlantic & Pacific Tea Co. v. FTC, 440 U.S. 69, 80 n.13 (1979); United States v. United States Gypsum Co., 438 U.S. 422, 458-59 (1978); Automatic Canteen Co. of America v. FTC, 346 U.S. 61, 74 (1953).
5 Great Atlantic and Pacific Tea Co. v FTC, 440 U.S. at 80, quoting Automatic Canteen Co. of America v. FTC, 346 U.S. at 63. Thus, the Court has made it clear that firms cannot use the Act as a pretext for anticompetitive conduct. For example, verifying the prices offered by competing firms cannot include systematically checking prices directly with rivals, because this could lead to collusion and price stabilization. United States v United States Gypsum Co., 438 U.S. at 456-59.
6 Boise Cascade Corp., 107 F.T.C. at 204-05.
7 Id. at 82 (Commissioner Pitofsky dissenting from issuance of the complaint).
8 Falls City Industries, Inc. v. Vanco Beverage Co., 460 U.S. 428, 434-35 (1983); accord, Corn Products Refining Co. v. FTC, 324 U.S. 726, 742 (1945); International Tel. & Tel. Corp., 104 F.T.C. 280, 423 (1984).
9 Brooke Group Ltd., CCH 70,277 at 70,382.
10 See Brooke v. Brown & Williamson, CCH 70,277 at 70,381-82.
11 International Tel. & Tel. Corp., 104 F.T.C. at 417, quoting E. Kintner, A Robinson-Patman Primer 35 (2d ed. 1979); accord, L. Sullivan, Handbook of the Law of Antitrust 679-80 (1977).
12 See generally, e.g., Metro Communications v. Ameritech Mobile Com., 984 F.2d 739, 745-46 (6th Cir. 1993) (plaintiffs simply acted as intermediaries between Ameritech (the services seller) and its customers); Seaboard Supply Co. v. Congoleum Corp., 770 F.2d 367, 373 (3d Cir. 1985) (preferences granted to legitimate sales agent not actionable because no sale to agent); Microsoft Corp. v. BEC Computer Co., Inc., 818 F.Supp. 1313, 1318 (C.D.Cal. 1992). But see En Vogue v. UK Optical Ltd., 843 F.Supp. 838 (E.D.N.Y. 1994) (motion to dismiss denied; the buyer could be a covered "purchaser" where it had contracted to make a minimum number of purchases, even though no sales had as yet been made).
13 Metro Communications v. Ameritech Mobile Com., 984 F.2d at 745, quoting City of Kirkwood v. Union Electric Company, 671 F.2d 1173, 1181 (8th Cir. 1982), cert. denied, 459 U.S. 1170 (1983).
14 Metro Communications v. Ameritech Mobile Com., 984 F.2d at 745.
15 First Comics, Inc. v. World Color Press, Inc., 884 F.2d 1033, 1035-38 (7th Cir. 1989), cert. denied, 493 U.S. 1075 (1990).
16 Ambook Enters. v. Time Inc., 612 F.2d 604, 609-10 (2d Cir. 1979), cert. denied, 448 U.S. 914 (1980).
17 Export Liquor Sales, Inc. v. Ammex Warehouse Co., 426 F.2d 251, 252 (6th Cir.), cert. denied, 400 U.S. 1000 (1971).
18 National Communications Ass'n v. AT&T, 808 F.Supp. 1131, 1136 (S.D.N.Y. 1992).
19 Rankin County Cablevision v. Pearl River Valley Water Supply Dist., 692 F.Supp. 691, 692-93 (S.D. Miss. 1988).
20 Metro Communications v. Ameritech Mobile Com., 984 F.2d 739, 745 (6th Cir. 1993), citing General Shale Products Corp. v. Struck Construction Co., 132 F.2d 425 (6th Cir. 1942), cert. denied, 318 U.S. 780 (1943).
21 Caribe BMW, Inc. v. Bayerische Motoren Werke Aktiengesellschaft, 19 F.3d 745 (1st Cir. 1994).
22 Caribe BMW v. Bayerische Motoren Werke, 19 F.3d 745, 747-48 (1st Cir. 1994).
23 Caribe BMW, Inc. v. Bayerische Motoren Werke Aktiengesellschaft, 821 F.Supp. 802, 811-12, citing Acme Refrigeration of Baton Rouge, Inc. v. Whirlpool Corp., 785 F.2d 1243 (5th Cir.), cert. denied, 479 U.S. 848 (1986).
24 Caribe BMW v. Bayerische Motoren Werke, 19 F.3d at 749.
25 Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 771-72 (1984).
26 Acme Refrigeration of Baton Rouge, Inc. v. Whirlpool Corp., 785 F.2d 1240, 1243 (5th Cir.), cert. denied, 479 U.S. 848 (1986). The plaintiff in Caribe did not allege anything about the extent to which BMW exercised actual control over its North American subsidiary. Caribe BMW v. Bayerische Motoren Werke, 19 F.3d at 749.
27 The recovery of damages in a private Robinson-Patman Act suit -- which may be trebled, pursuant to section 4 of the Clayton Act, 15 U.S.C. 15 -- requires a showing not only of a violation of the Act, but also that the plaintiff has suffered actual injury as a result of the price discrimination at issue. Texaco, Inc. v. Hasbrouck, 110 S.Ct. 2535, 2551 (1990). That injury may be measured by lost sales or profits, J. Truett Payne Co. v. Chrysler Motors Corp., 451 U.S. 557, 561-62 (1981), but the Supreme Court has reaffirmed its "traditional rule excusing antitrust plaintiffs from an unduly rigorous standard of proving antitrust injury." Texaco, Inc. v. Hasbrouck, 110 S.Ct. at 2551 (citations omitted). In private actions, therefore, this standard, in effect, supplements the competitive injury standard for demonstrating a section 2(a) violation that the Commission must satisfy. See Boise Cascade Corp., 107 F.T.C. at 208-09 n. 7.
28 Brooke v. Brown & Williamson, CCH 70,277, at 70,382; Texaco, Inc. v. Hasbrouck, 110 S.Ct. at 2543 n.15; International Tel. & Tel. Corp., 104 F.T.C. at 423.
29 Brooke v. Brown & Williamson, CCH 70,277, at 70,382- 83, citing, e.g., Matsushita Electric Industrial Co.. v. Zenith Radio Corp., 475 U.S. 574, 589 (1986).
30 International Tel. & Tel. Corp., 104 F.T.C. at 404, 424- 25. When predatory intent or predatory pricing is relied upon to establish primary line injury, the standards that govern the intent and conduct components of the attempted monopolization offense should apply. Id. at 424; see Boise Cascade Corp., 107 F.T.C. at 203. It may also be possible to establish primary line injury directly, through "a detailed market analysis establishing that the discrimination at issue actually injured competition." International Tel. & Tel. Corp., 104 F.T.C. at 423-24.
31 Texaco, Inc. v. Hasbrouck, 110 S.Ct. at 2543 n.15; International Tel. & Tel. Corp., 104 F.T.C. at 441-42. A third type of injury, known as "tertiary line injury," occurs when competition among customers of a disadvantaged buyer and customers of the favored buyer is or may be injured.
32 Falls City Industries v. Vanco Beverages, Inc., 460 U.S. at 435. Proof of the existence of such injury typically is sufficient to establish a prima facie case, regardless of the magnitude of the injury alleged.
33 Texaco, Inc. v. Hasbrouck, 110 S.Ct. at 2544, quoting FTC v. Morton Salt Co., 334 U.S. 37, 46-47 (1948).
34 Falls City Industries v. Vanco Beverages, Inc., 460 U.S. at 435; accord, Boise Cascade Corp., 107 F.T.C. at 205-06.
35 Texaco v. Hasbrouck, 110 S.Ct. at 2542.
36 As now-Justice Breyer indicated in Coastal Fuels v. Caribbean Petroleum Corp., 990 F.2d 25, 28 (1st Cir. 1993), "price differences, based upon cost savings, will sometimes have a pro-competitive impact."
37 Texaco v. Hasbrouck, 110 S.Ct. at 2547 n. 21.
38 United States v. United States Gypsum Co., 438 U.S. 422, 451 (1978), quoting FTC v. A.E. Staley Mfg. Co., 324 U.S. 746, 759-60 (1945).
39 Falls City Industries, Inc. v. Vanco Beverage, Inc., 460 U.S. at 448.
40 International Tel. & Tel. Corp., 104 F.T.C. at 435 (emphasis in original).
41 Falls City Industries, Inc. v. Vanco Beverage, Inc., 460 U.S. at 445-51; International Tel. & Tel. Corp., 104 F.T.C. at 435. A firm may also rely on the meeting competition defense to support meeting a rival bid that the firm reasonably believes is lower than its own, even though the firm does not know the rival's exact bid, or seeks to match only the total bid amount and not its individual components. Great Atlantic & Pacific Tea Co. v. FTC, 440 U.S. 69, 82-83 (1979).
42 See, e.g., FTC v. Morton Salt Co., 334 U.S. 37, 42, (1948); Caribe BMW v. Bayerische Motoren Werke, 19 F.3d at 751; Comcoa, Inc. v. NEC Telephones, Inc., 931 F.2d 655, 664 (9th Cir. 1991); Bouldis v. U.S. Suzuki Motor Corp., 711 F.2d 1319, 1326, 1328-29 (6th Cir. 1983); Shreve Equipment, Inc. v. Clay Equipment Corp., 650 F.2d 101, 105-06 (6th Cir.), cert. denied, 454 U.S. 897 (1981).
43 Caribe BMW v. Bayerische Motoren Werke, 19 F.3d 745, 751-52 (1st Cir. 1994) (emphasis in original), citing, e.g., Alterman Foods, Inc. v. FTC, 497 F.2d 993, 1001 (5th Cir. 1974).
44 Automatic Canteen Co. of America v. FTC, 346 U.S. 61, 79-80 (1953); Boise Cascade Corp., 107 F.T.C. at 201. The plaintiff must bear the burden of establishing that the buyer knew that the discrimination at issue was illegal, but the plaintiff may be able to discharge that burden by introducing evidence of "trade experience." Automatic Canteen Co. of America v. FTC, 346 U.S. at 79-80.
45 Falls City Industries, Inc. v. Vanco Beverages, Inc., 460 U.S. at 435; FTC v. Morton Salt Co., 334 U.S. 37, 46 (1948). A showing that the discounts at issue are generally and practically available to the competitors of the favored buyer may negate the price discrimination component. See, e.g., FTC v. Morton Salt, 334 U.S. at 42. Other courts have held that a buyer may establish an absence of competitive injury by showing that the discounts at issue are generally and practically available to its competitors. See, e.g., Tri-Valley Packing Ass'n v. FTC, 329 F. 2d 694, 703-04 (9th Cir. 1964).
46 Great Atlantic and Pacific Tea Co. v. FTC, 440 U.S. 69, 78-79 (1979); Automatic Canteen Co. v. FTC, 346 U.S. 61, 70-71 (1953); Klamath-Lake Pharmaceutical Ass'n v. Klamath Medical Service Bureau, 701 F.2d 1276, 1283 (9th Cir.), cert. denied, 104 S.Ct. 88 (1983). But see Kroger Co. v. FTC, 438 F.2d 1372, 1377 (6th Cir.), cert. denied, 404 U.S. 871 (1971) (when a buyer misrepresents the prices it has been offered by a seller's competitors, the seller arguably does not violate Section 2(a) by selling its products to the buyer at discriminatorily lower prices, because it is making a bona fide effort to meet what it believes in good faith to be competition from other sellers. Nevertheless, "the seller's successful defense under 2(b) cannot exculpate the buyer." Id. at 1377. It is unclear whether this view survived the later A&P decision, in which the Supreme Court found it unnecessary to address it. Great Atlantic and Pacific Tea Co. v. FTC, 440 U.S. at 81-82 n.15.
47 Texaco, Inc. v. Hasbrouck, 110 S.Ct. at 2542 n.11.
48 Id. at 2538-40. Dompier resold the Texaco gasoline at retail under the Texaco brand name, while Gull resold it under its own brand name. Id. at 2539. Both firms picked up product at the Texaco bulk plant and delivered it directly to retail outlets, and in addition Dompier received the equivalent of the common carrier rate for delivering the gasoline product to the retail outlets. Id. at 2540.
49 Id. at 2540 n.4.
50 Id. at 2541.
51 Id. at 2542-43.
52 Id. at 2546, quoting Report of the Attorney General's National Committee to Study the Antitrust Laws 208 (1955).
53 Id. at 2550.
54 Id. at 2546.
55 Id. at 2551.
57 Id. at 2546.
58 Id. at 2547 n.21.
59 Doubleday & Co., 52 F.T.C 169, 209 (1955).
60 Mueller Co., 60 F.T.C. 120, 127-28 (1962), aff'd, 323 F.2d 44 (7th Cir. (1963), cert. denied, 377 U.S. 923 (1964).
61 15 U.S.C. 13(c).
62 15 U.S.C. 13(d),(e). The courts have consistently held that sections 2(d) and 2(e) are to be construed in pari materia. General Motors Corp., 103 F.T.C. at 698 n. 2 (citation omitted).
Section 2(f) does not prohibit buyer inducement or receipt of allowances or services that are unlawful pursuant to sections 2(d) or 2(e), and there is therefore no private right of action against either type of buyer conduct. However, the Commission has determined that buyer inducement or receipt of illegal allowances or services constitutes an unfair method of competition in violation of section 5 of the FTC Act. Grand Union Co., 57 F.T.C. 382 (1960), modified and aff'd, 300 F.2d 92 (2d Cir. 1962).
63 Guides for Advertising Allowances and Other Merchandising Payments and Services, 55 Fed. Reg. 33651, 33652 (Aug. 17, 1990) (hereinafter Guides FR Notice), quoting Herbert R. Gibson, Sr., 95 F.T.C. 553, 725 (1980), aff'd, 682 F.2d 554 (5th Cir. 1982), cert. denied, 460 U.S. 1063 (1983); accord, General Motors Corp., 103 F.T.C. 641 (1984).
64 See FTC v. Simplicity Pattern Co., 360 U.S. 55, 58-59 (1959); General Motors Corp., 103 F.T.C. at 697.
65 See Boise Cascade Corp., 107 F.T.C. at 199-200.
66 Id. at 199. The Commission simultaneously issued an order directing the ALJ to receive evidence and make findings of fact under two different competitive injury standards. Id. at 200; compare Mueller Co., 60 F.T.C. 120 (1962), aff'd, 323 F.2d 44 (7th Cir. 1963), cert. denied, 377 U.S. 923 (1964) with Doubleday & Co., 52 F.T.C. 169 (1955); see notes 59 and 60 and accompanying text, supra.
67 Boise Cascade Corp., 107 F.T.C. at 77. As noted above, at the time the complaint was issued, then-Commissioner Pitofsky filed a statement noting that sensible Robinson-Patman cases can be initiated, but dissenting from the issuance of the complaint at issue. Id. at 79.
68 Boise Cascade Corp., 113 F.T.C. 956, 958 (1990) (hereinafter Boise Cascade Corp. II), citing Boise Cascade Corp., 107 F.T.C. at 180, 182.
69 Boise Cascade Corp. II, 113 F.T.C. at 958.
70 Boise Cascade Corp., 107 F.T.C. at 80-81 (Commissioner Pitofsky dissenting from issuance of the complaint).
71 Boise Cascade Corp. II, 113 F.T.C. at 957.
72 Falls City Industries, Inc. v. Vanco Beverage Co., 460 U.S. 428, 434-35 (1983).
73 Boise Cascade Corp., 107 F.T.C. at 224-25.
74 Boise Cascade Corp. v. FTC, 837 F.2d 1127, 1148 (D.C. Cir. 1988).
75 Id. at 1144.
76 See Boise Cascade Corp. II, 113 F.T.C. at 961.
77 Boise Cascade Corp. v. FTC, 837 F.2d at 1148; Boise Cascade Corp. II (Final Order), at 956.
78 Boise Cascade Corp. II, 113 F.T.C. at 1002.
79 16 C.F.R. Part 240 (1995) (hereinafter Guides).
80 FTC v. Fred Meyer, Inc., 390 U.S. 341 (1968).
81 1972 Guides, 16 C.F.R. 240.16 (1989).
82 Falls City Industries, Inc. v. Vanco Beverage, Inc., 460 U.S. 428, 448 (1983); International Tel. & Tel., 104 F.T.C. 280, 435 (1984).
83 Guides Federal Register Notice, 55 Fed.Reg. 33651, 33652 (Aug. 17, 1990), comparing Herbert R. Gibson, 95 F.T.C. 553, 726 (1980), aff'd, 682 F.2d 554 (5th Cir. 1982), cert. denied, 460 U.S. 1068 (1983) and General Motors Corp., 103 F.T.C. 641 (1984) with Alterman Foods, Inc., 82 F.T.C. 298 (1973), aff'd, 497 F.2d 993 (5th Cir. 1974).
84 Guides Federal Register Notice, 55 Fed. Reg. at 33655.
85 Id. at 33652.
86 Id. at 33653-54.
87 Id. at 33657.
88 Guides, 16 C.F.R. 240.9(a) (1995).
89 Id. 240.9, note 1.
90 Guides Federal Register Notice, 55 Fed. Reg. at 33662.
91 Id. at 33658.
93 Id. at 33659.
94 Guides, 16 C.F.R. 240.14 (1995).
95 Guides Federal Register Notice, 55 Fed. Reg. at 33661, citing 6 Trade Reg. Rep. (CCH) 39,057 (1988).
96 16 C.F.R. 240.7 (1995).
97 Id. 240.12.
98 Grand Union Co., 57 F.T.C. 382 (1960), modified and aff'd, 300 F.2d 92 (2d Cir. 1962).
99 16 C.F.R. 240.13 (1995).
100 59 Fed.Reg. 8527 (Feb. 23, 1994).