## Facts

- Standard Oil Company (Indiana) sold “Red Crown” gasoline in the Detroit area.
- It charged four large “jobber” customers a tank-car price 1.5 cents per gallon lower than the tank-wagon price charged to many smaller service-station customers for identical gasoline in the same area.
- The discounted “Red Crown” sales to jobbers constituted about 90% of Standard’s Detroit gasoline sales.
- Standard lowered the jobber price to prevent losing those customers to competitors offering equally low prices.
- The FTC found the differential likely injured competition between jobbers and smaller service-station customers and issued a cease-and-desist order under § 2(a) of the Clayton Act as amended by the Robinson-Patman Act.
- The court of appeals modified and enforced the FTC order.

## Issues

1. Whether the challenged gasoline sales were “in commerce” within the meaning of the Robinson-Patman Act.
2. Whether § 2(b)’s meeting-competition defense is a complete defense when the seller in good faith meets a lawful and equally low competitor price, even if the discrimination tends to injure competition.

## Decision

- The Supreme Court held the sales were “in commerce” for Robinson-Patman purposes.
- The Court reversed the judgment enforcing the FTC’s order and remanded.
- The Court ruled that § 2(b) provides a complete defense if the seller proves the lower price was made in good faith to meet a lawful and equally low price of a competitor, even if the differential injures competition.
- The Court rejected an approach that would condition the defense on the FTC’s assessment of competitive injury at downstream levels or require balancing harms against the seller’s need to meet competition.

## Legal Principles

- A prima facie showing of price discrimination under § 2(a) may be rebutted by the seller under § 2(b) by proving the lower price was made in good faith to meet (not beat) a lawful and equally low competitor price.
- The § 2(b) meeting-competition defense is not defeated merely because the price differential benefits favored buyers or tends to injure competition; once established, it operates as a complete defense.
- Robinson-Patman restricts the defense to good-faith matching of a lawful competitor price, but does not make the defense contingent on a finding of no competitive injury.
- Sales may fall “in commerce” when they are part of an interstate flow of goods into the relevant market sufficient to satisfy the statute’s jurisdictional requirement.

## Conclusion

The Court held that the challenged Detroit gasoline sales were within the Act’s commerce requirement and that a seller who proves a discriminatory lower price was set in good faith to meet a lawful, equally low competitor price has a complete § 2(b) defense, regardless of any resulting injury to competition.


Standard Oil Co. v. Federal Trade Comm’n, 340 U.S. 231 (1951)