Robinson-Patman Act
According to the New York Times, President Barack Obama is offering American companies a tax break to encourage the return of production to the U.S. One could ask why corporations care about a tax break when there is still a ten-to-one profit margin for companies who keep production operations in China. It is possible that President Obama is not receiving the best advice on this topic. In fact, his advisors seem to be neglecting a crucial law that has been protecting American businesses for over 70 years.
The Robinson-Patman Act of 1936, also known as the Anti-Price Discrimination Act (Pub. L. No. 74-692, 49 Stat. 1526, codified at 15 U.S.C. § 13), is a federal law prohibiting anticompetitive pricing practices. The Act specifically targets price discrimination as carried out by producers. The Act was drafted as an amendment to the Clayton Antitrust Act. It was considered necessary as chain stores at the time were permitted to purchase goods at lower prices than independent retailers.
The Robinson-Patman Act was a groundbreaking piece of legislation. The Act was the first federal law to prohibit unfair price discrimination. To this day, it requires that sellers offer the same pricing terms to buyers who conduct similar levels of trade. Sellers are not permitted to adjust prices based upon company ownership. While providing for criminal penalties, the act allows a special exemption for cooperative associations. However, many contemporary businesses are circumventing these rules without exemption—and without punishment.
Major retailer Wal-Mart began has long bent Robison-Patman rules. Many other businesses have followed suit. The Robert Rodriguez Design Collection, a division of retail giant Jones New York, has shipped production to China. Given the high price point of the companys merchandise, there is simply no excuse for outsourcing production operations. These designers are supported by celebrities such as Angelina Jolie, Scarlett Johansson, Angela Bassett, Nicole Kidman and Eva Longoria. Celebrities seem more than happy to ignore the greed of these designers.
While I understand that corporations are greedy, I do not understand how they can be so selfish. Such corporations show no remorse to domestic workers who have lost their jobs and homes to outsourcing. When will consumers demonstrate social responsibility and stand against these criminal actions? Inflation is rising and many domestic workers are unable to purchase homes in metropolitan areas. The effect of outsourcing has trickled down into many