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15 U.S.C. § 13Discrimination in price, services, or facilities

submitted 112 years ago by ch. 323 to r/title-15-COMMERCE-AND-TRADE · 869 words · no verdicts yet

in plain englishAI-generated · not legal advice

Sellers usually can't charge different buyers different prices for the same goods. That's illegal if it seriously hurts competition. Exceptions exist for real cost differences, matching a competitor's price, or spoiling goods. Sellers also can't pay hidden brokerage fees or favor some buyers with extra services. Buyers can't knowingly demand a price break that breaks this rule.

This section is the core price-discrimination rule for sellers of goods in commerce. (a) Price discrimination between buyers. It is unlawful for someone engaged in commerce to directly or indirectly charge different buyers different prices for goods of like grade and quality, when at least one sale is in commerce, the goods are sold for use, consumption, or resale in the United States or its territories, and the price difference might substantially lessen competition, tend to create a monopoly, or hurt competition with anyone who gives or knowingly gets the benefit of that price difference, or their customers. This does not stop price differences that only reflect real cost differences in manufacturing, selling, or delivering the goods because of different methods or quantities. The Federal Trade Commission may, after investigation and a hearing, set (and revise) quantity limits for particular goods where few enough buyers purchase in larger quantities that price breaks for those quantities would be unfair or promote monopoly; price differences based on quantities above those limits are then not allowed. This section also does not stop sellers from choosing their own customers in good-faith deals that do not restrain trade, or from changing prices in response to changing market conditions — such as spoiling perishable goods, seasonal goods going out of style, court-ordered distress sales, or good-faith sales when going out of business. (b) Burden of proof. Once discrimination in price, services, or facilities is proven at a hearing on a complaint under this section, the accused person has the burden of justifying it. If they cannot, the Commission may order the discrimination stopped. A seller can still justify a lower price, or extra services, by showing it was offered in good faith to match an equally low price or equal services offered by a competitor. (c) Brokerage payments. It is unlawful for someone engaged in commerce to pay, grant, receive, or accept a commission, brokerage fee, or similar compensation — except for services actually rendered in connection with buying or selling goods — to the other party in a deal, or to an intermediary who is actually working for, or controlled by, someone other than whoever is paying. (d) Paying for a customer's services. It is unlawful for someone engaged in commerce to pay a customer for services or facilities that customer provides in processing, handling, or selling the seller's products, unless that payment is available on proportionally equal terms to all the customer's competitors. (e) Furnishing services or facilities. It is unlawful to favor one buyer of a commodity over another by providing services or facilities connected to processing, handling, or selling that commodity, unless it is offered to all buyers on proportionally equal terms. (f) Buyers cannot induce or accept discrimination. It is unlawful for someone engaged in commerce to knowingly induce or receive a price discrimination that this section prohibits.
the actual law source: uscode.house.gov ↗public domain
(a) Price; selection of customers

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 contact 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.

Source credit: (Oct. 15, 1914, ch. 323, § 2, 38 Stat. 730; June 19, 1936, ch. 592, § 1, 49 Stat. 1526.)

history & why it existsrecord from the source credit
  • 1914Enacted · Act of Oct. 15, 1914, ch. 323 · 38 Stat. 730
  • 1936Amended · Act of June 19, 1936, ch. 592 · 49 Stat. 1526

A history note hasn’t been published yet. The record shows enactment by ch. 323 on 1914-10-15.

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