Tuesday, June 7, 2005
The Supreme Court granted review of a case raising issues of competition and dealer foreclosure under the Robinson-Patman Act. The case will be heard during the 2005-2006 term. In Volvo v. Reeder, the Court will decide whether Volvo's practice of receiving competitive bids from potential truck retailers in exchange for price concessions constitutes price discrimination prohibited under the Robinson-Patman Act. The trial court and the US Court of Appeals for the 8th Circuit have found against Volvo, with the appellate court concluding that Reeder's fall in profits after being discontinued as a Volvo dealer was a result of Volvo's disfavoring Reeder in comparison to other retailers. The dissenting judge in the 8th Circuit questioned whether Robinson-Patman was applicable since Volvo granted concessions to retailers who were not in direct competition with Reeder.