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In what sense does the Robinson Patman Act arguably reduce efficiency, thus harming consumer welfare?. United States Magistrate Judge Gold This complex, long-pending antitrust litigation has been the subject of numerous written decisions by various courts. . . . In short, plaintiffs are a number of individually-owned retail pharmacies. Plaintiffs allege that defendants, five manufacturers of brand name prescription drugs ( BNPDs ), offered discounts and rebates to plaintiffs competitors but not to plaintiffs, and that this constitutes price discrimination in violation of the Robinson-Patman Act. BACKGROUND In 2007, Senior United States District Judge I. Leo Glasser granted defendants motion for summary judgment . . . on the ground that plaintiffs have failed to show they are entitled to damages. * * * * * After Judge Glasser dismissed the claims of the designated parties, approximately 3,700 individual retail pharmacy plaintiffs remained. Confronted with Judge Glasser s decision these remaining plaintiffs devised a plan to gather evidence in discovery that might show that specific plaintiff pharmacies lost sales of BNPDs manufactured by defendants to any specific favored purchaser. Pursuant to this plan, which came to be known as the matching process, plaintiffs compiled lists of specific BNPD customers who no longer purchased drugs from them, and then searched the databases of non-party favored purchasers (and one favored purchaser who is a party) to see whether those same individuals were obtaining the same BNPDs from those favored purchasers. * * * * * [O]nly approximately 3% (5,147 of 164,501) of the potential lost customers plaintiffs culled from their own records could be matched to a customer who subsequently filled the same prescriptions with one or more favored purchasers. * * * * * The nature of these results is further illustrated when they are broken down and analyzed by defendant. 2. Antitrust Injury . . . A plaintiff seeking to recover damages on a Robinson Patman claim must establish an antitrust injury. * * * * * Price discrimination does not entitle a disfavored purchaser to automatic damages. J. Truett Payne Co. v. Chrysler Motors Corp., 451 U.S. 557, 561, 101 S.Ct. 1923, 68 L. Ed. 2d 442 (1981). Rather, * * * * * Because they are essentially unable to match up a significant number of the customers they lost with those the favored purchasers gained, plaintiffs have failed to demonstrate antitrust injury. . . . CONCLUSION For all these reasons, defendants motion for summary judgment is granted. Questions 1. Why did the retail pharmacies lose this case? 2. a. In your opinion, have small pharmacies and small businesses generally lost significant revenue over the years to retail giants such as Walmart and Custom? Explain. b. If so, does that loss constitute an antitrust wrong that should be remedied by law? Explain. 3. In what sense does the Robinson Patman Act arguably reduce efficiency, thus harming consumer welfare? 4. Texaco sold gasoline at its retail tank wagon prices to Hasbrouck, an independent Texaco retailer, but granted discounts to distributors Gull and Dompier. Dompier also sold at the retail level. Gull and Dompier both delivered their gas directly to retailers and did not maintain substantial storage facilities. During the period in question, sales at the stations supplied by the two distributors grew dramatically, while Hasbrouck s sales declined. Hasbrouck filed suit against Texaco, claiming that the distributor discount constituted a Robinson Patman violation. Texaco defended, saying the discount reflected the services the distributors performed for Texaco, and that the arrangement did not harm competition. Decide. Explain. See Texaco v. Ricky Hasbrouck, 496 U.S. 543 (1990). 5. Utah Pie produced frozen pies in its Salt Lake City plant. Utah s competitors, Carnation, Pet, and Continental, sometimes sold pies in Salt Lake City at prices beneath those charged in other markets. Indeed, Continental s prices in Salt Lake City were beneath its direct costs plus overhead. Pet sold to Safeway using Safeway s private label at a price lower than that at which the same pies were sold under the Pet label. Pet employed an industrial spy to infiltrate Utah Pie and gather information. Utah Pie claimed that Carnation, Pet, and Continental were in violation of Robinson Patman. Decide. Explain. See Utah Pie Co. v. Continental Baking Co., 386 U.S. 685 (1967). . . The post In what sense does the Robinson Patman Act arguably reduce efficiency, thus harming consumer welfare? appeared first on Brainy Term Papers. In what sense does the Robinson Patman Act arguably reduce efficiency, thus harming consumer welfare?


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