The Robinson–Patman Act, sponsored by Senator Joseph Taylor Robinson (D-AR) and Representative John William Wright Patman (D-TX), is a United States federal law passed in 1936 prohibiting price discrimination and other anticompetitive practices by producers. The law was needed because chain stores had been able to purchase goods at lower prices than other retailers, thus enabling them to discount their retail prices. The new law required the seller offer the same price terms to customers of the same type. Publishers have been bound by this law ever since.

There has been quite a bit of litigation about differential pricing in the book business. Wikipedia tells us: “In 1994, the American Booksellers Association and independent bookstores filed a federal complaint in New York against Houghton Mifflin Company, Penguin USA, St. Martin’s Press and others, alleging that defendants had violated the Robinson–Patman Act by offering ‘more advantageous promotional allowances and price discounts’ to ‘certain large national chains and buying clubs.’ Later, complaints were filed against Random House and Putnam Berkley Group, and these cases also were later settled with the entry of similar consent decrees. Eventually, seven publishers entered consent decrees to stop predatory pricing, and Penguin paid $25 million to independent bookstores when it continued the illegal practices. In 1998, the ABA (which represented 3,500 bookstores) and 26 individual stores filed suit in Northern California against chain stores Barnes & Noble and Borders Group, who had reportedly pressured publishers into offering these price advantages.” Since that time publishers have been careful to avoid this sort of trouble. Things like promotional allowances still muddy the waters and much care has to be devoted to terminology. Our Sales Director used to pace up and down muttering “Robinson–Patman, Robinson–Patman”.

At the end of last year at The Digital Reader, Randy J. Morris discussed the Robinson–Patman Act in connection with Amazon’s bricks-and-mortar stores. I’m not sure, though I’m a legal naïve, that Amazon’s offering variable pricing in their bookshops is any different than their offering that same prices on-line. If the discounts they get from publishers which enable them to offer their on-line discounts to customers are OK by Robinson–Patman, I don’t really see why a physical bookstore would alter the situation. As far as I know nobody’s bringing suit.

 

 

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