United States Supreme Court Cases & Opinions

U.S. Supreme Court

Automatic Canteen Co. v. FTC, 346 U.S. 61 (1953)

Automatic Canteen Company v. Federal Trade Commissions

No. 89

Argued December 12, 15, 1952

Decided June 8, 1953

346 U.S. 61

Syllabus

Section 2 (f) of the Robinson-Patman Act makes it unlawful for anyone engaged in interstate commerce "knowingly to induce or receive a discrimination in price which is prohibited" by the Act, but the Act does not prohibit a price differential which makes only due allowance for cost differences. The Federal Trade Commission issued a complaint charging violation of § 2(f) by petitioner, a large buyer of candy and confections for resale through automatic vending machines operated in many States. At the hearing, the Commission introduced evidence that petitioner received, and in some instances solicited, prices that petitioner knew were as much as 33% lower than the prices to other buyers. Petitioner's motion to dismiss the complaint on the ground that the Commission had not made a prima facie case was denied, and, on petitioner's failure to introduce evidence, the Commission entered a cease and desist order.

Held:

1. A buyer does not violate § 2(f) if the lower prices he induces are either within one of the seller's defenses, such as the cost justification, or not known by him not to be within one of those defenses. Pp. 346 U. S. 69-74.

2. Proof that the buyer knew that the price he induced or received was lower than that offered other buyers is not sufficient to shift to the buyer the burden of introducing evidence to show justification. Pp. 346 U. S. 74-81.

194 F.2d 433, reversed.

In a proceeding against petitioner under § 2(f) of the Robinson-Patman Act, 15 U.S. C. § 13, the Federal Trade Commission entered a cease and desist order. 46 F.T.C. 861. On a petition for review, the Court of Appeals affirmed. 194 F.2d 433. This Court granted certiorari. 344 U.S. 809. Reversed and remanded, p. 346 U. S. 82.

Page 346 U. S. 62