Monday, May 28, 2012
Posted by D. Daniel Sokol
Hagit Bulmash (Tel Aviv University) undertakes AN EMPIRICAL ANALYSIS OF SECONDARY LINE PRICE DISCRIMINATION MOTIVATIONS.
ABSTRACT: The prohibition of secondary line price discrimination stated in the Robinson-Patman Act probably still affects more business decisions than any other antitrust law. This article applies a new methodology, developed in the study, of systematic content analysis of all court decisions of Robinson-Patman cases published from 1990 to 2000 (inclusive), traced using the lexis.com database, in order to expand our knowledge regarding such discrimination. I present two empirical claims concerning the act. First, I analyze the preliminary procedures conducted in secondary line private complaints, showing that the procedures themselves can harm competition among suppliers, encourage collusion, and increase monopoly prices. Second, I fill in the factual background to show how the act harms consumers and competition, and, by contrast, how the use of secondary line discrimination can encourage competition. The results help to understand the reasons why suppliers employ such discrimination and its affect on business behavior and competition. They also help to explain the motivations of those discriminated purchasers to file a complaint for such discrimination. The results show empirically why the Robinson-Patman Act should be repealed in its entirety and why it would not be sufficient to dismiss private complaints filed to courts, or to interpret it in keeping with broader antitrust policies.