United States: Revised "Fred Meyer Guides" Leave Treatment Of Key Robinson-Patman Act Provisions Unchanged

While hardly ever enforced in modern times by government enforcement agencies, and rarely the subject of antitrust treble damage actions, Sections 2(d) and (e) of the Robinson Patman Act (15 U.S.C. §§ 13(d) and (e)) have had a colorful heritage.  In response to the Supreme Court's decision in FTC v. Fred Meyer, Inc., 390 U.S. 341 (1968), the Federal Trade Commission issued its Guides for Advertising Allowances and Other Merchandising Payments and Services, codified at 16 CFR, Part 240 (1969).  The "Fred Meyer Guides", as they are generally referred to, were revised in 1990, and most recently in November 2014.  In the wake of efforts through the years to better equate the aims and goals of Robinson-Patman enforcement with those of the other antitrust laws, there has been a vigorous debate over modifications.  These included proffered amendments suggested by the American Bar Association Section of Antitrust Law, the Antitrust Law Institute, and others.

Modernization and harmonization was arguably called for in the wake of the Supreme Court's decision in Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc., 546 U.S. 164 (2006).  Volvo concerned a manufacturer's uneven provision of price supports to dealers endeavoring to meet competition from dealers of other brands.  The Supreme Court held that absent a showing of actual competition with a favored Volvo dealer, the plaintiff could not establish competitive injury.  The Court made clear that the purpose of all of the antitrust laws, including the Robinson-Patman Act, is to protect interbrand competition, and not individual dealers claiming intrabrand discrimination.

While changes were made in the 2014 Fred Meyer Guides, nothing has changed as to the application of Sections 2(d) and (e).  Commentators urged the Federal Trade Commission to make clear that pursuant to Volvo, Sections 2(d) and 2(e) would only apply where there was evidence of "injury to competition", as opposed to injury to a competitor.  This would have equated the anticompetitive effects analysis of these Sections to the basic price discrimination Section (2)(a).  The Federal Trade Commission declined to adopt these recommendations.  While it recognized that proof of competitive effects would be sound enforcement policy, it simply revised the Guides to state its own intent to enforce the Act only in cases of likely harm to the competitive process.  Where enforcement is pursuant to a private treble damage action, a treble damage plaintiff must allege and prove injury to the competitive process, even under Section 2(d) and 2(e), which otherwise is "per se" in an action by a governmental enforcement agency.  This is because private enforcement is grounded in Section 4 of the Clayton Act.

A recent decision from a Wisconsin district court confirms that the 2014 Fred Meyer Guides revisions leave the treatment of Sections 2(d) and 2(e) unchanged.  Woodman's Food Market, Inc. v. The Clorox Company, Case No. 14-cv-734-slc, Feb. 2, 2015 (U.S. D.C. W.D. Wisc.)

Woodman's Food Market, Inc. ("Woodman's") had been a longtime customer of The Clorox Company ("Clorox").  Woodman's had purchased over 480 "stock keeping units" ("SKUs") from Clorox.  Historically, Woodman's purchased "large pack" products from Clorox.  These products are larger containers or packages of a product that typically it has offered to customers at a cost savings per unit.  In 2014, Clorox announced its "Differentiated Products Offering Plan."  It announced to Woodman's that it would be classified in a different channel than was Sam's or Costco.  As a result, Sam's and Costco could purchase the same products in the larger package offerings at lower prices.  Thus, Clorox was considering the new larger container plan as an offering of a new product, and not simply a larger configuration of an existing product already being purchased by Woodman's.

Woodman's brought a civil action for declaratory and injunctive relief.  It sought a declaration that Clorox's "Differentiated Products Offering Plan" violated the price discrimination provisions of Sections 2(d) and 2(e).

Woodman's decision to frame its action in terms of declaratory and injunctive relief, rather than as a treble damage suit, was arguably intended to avoid the aforementioned requirement in treble damage actions of proving an injury to the competitive process.  In labeling its large pack offerings as "differentiated products marketing", Clorox argued that the larger size packaging constituted a separate, and "differentiated" product, which need not be offered to competing purchasers.  While noting the semantic differences, the District Court rejected the argument.  It noted that Section 2(e) declares that it is unlawful for any person to discriminate in favor of one purchaser against another purchaser of a commodity bought for resale 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 upon terms that according to all purchasers on proportionately equal terms.

This places in issue the question whether packaging the same goods and materials in larger size offerings constitutes the furnishing of a "service or facility" or a "separate product".  In other words, the question may be translated as "does the promotional service or facility offered" somehow aid the buyer in reselling the product, such as advertising, packaging, informational brochures, and the like.  Areeda Hovenkamp, XIV Antitrust Law Section 2363(e) at p. 291 (3d ed. 2012).  As the offering of a larger size grouping of the same product may be referred to in the vernacular as "packaging", it would, indeed, seem to be in violation of Section 2(e).  Clorox argued that by labeling its program "differentiated products", a package size is not a "promotional service".  The Court disagreed.  In the absence of case law to the contrary, the Court noted that this had been the interpretation by the Federal Trade Commission since 1969, as revised in 1990, and again as further revised in 2014.  The same products in a larger package is not "differentiated".  It is a product of "like grade and quality".

In light of the continued enforcement agency interpretation of the proper application of the statute, it seems appropriate to paraphrase the Rodgers and Hart song, "My Funny Valentine":

". . .  don't change a hair for me, not if you care for me."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
3 Dec 2018, Other, Los Angeles, United States

National Contract Management Association’s Government Contract Management Symposium

20 Feb 2019, Seminar, Orange, United States

The annual seminar addressing changes and developments in state and federal wage and hour laws is a unique one-day program and hundreds of California employers, personnel managers, controllers, attorneys, payroll managers, and supervisors attend each year.

21 Feb 2019, Seminar, Orange, United States

The seminar is designed to provide a guide to Human Resource Officials, Personnel Specialists, Consultants, Supervisors and other management officials through the ever-increasing maze of state and federal employment discrimination laws.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions