THE ROBINSON-Patman Act (RPA) enacted in 1936 is part of the antitrust legislation found in the Clayton Act of 1914. It prohibits discrimination in pricing, promotional allowances, and advertising. Better known as the Anti-Chain-Store Act or Anti-Megastore Act, the RPA is designed to protect small businesses from being driven out of the marketplace by giant franchised companies. It is also intended to protect wholesalers from being excluded from the purchasing chain. Wholesalers do not want such franchises bypassing them to buy products directly from manufacturers.

The logic behind the RPA is simple: Large corporations and businesses receive substantial discounts from their wholesale suppliers. If smaller businesses do not receive the same discounts, they cannot offer the same products at competitive prices. Eventually, these small businesses will ...

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