Additional discount to mail order seller of paperback books, A seller of paperback books planning to obtain…
69 F.T.C. 1220 · May 10, 1966 · Digest No. 41
source volume section (69 F.T.C. 1220)
Text is machine-OCR of the printed volume and may contain errors. Advisory opinions are the Commission's views on proposed conduct, not binding orders.
No. 41. Additional discount to mail order seller of paperback books, A seller of paperback books planning to obtain additiona1 discounts from publishers for selling through a mail order catalogue has been advised of the possible law violations involved in the plan and that the Federal Trade Commission is unable to give him an unqualified opinion on its legality. ,
ADVISORY OPINION DIGESTS 1221 The Commission pointed out that any p1an which results in discriminations in price or aIJowances between different reseIJers immediate1y raises prob1ems of possible vi01ation of the RobinsonPatman Act, and that on the basis of the information supplied there appear to be two possible ways of viewing this plan. Firstly, the Commission said If the plan invo1ves simply the granting by the pub1ishers of a 10wer price to you than to their other customers, its legality from the publishers' point of view would be governed by Section 2 (a) of the Robinson-Patman Act which prohibits discriminations in price which may adverse1y affect competition. In spite of the fact that your sales would not be made through the same channe1s of distribution as those of other purchasers of paperback books , it seems like1y that you would nevertheless compete with these purchasers to some extent, and that this competition might be lessened by the proposed price discriminations, in violation of Section 2 (a). Although price discriminations otherwise unlawful under Section 2 (a) may be justified by cost savings on the part of the seIJer, the information which you have submitted does not indicate the presence of such 'cost justification' in your plan. If the discounts granted to you by seIJers should violate Section 2(a), your knowing inducement or receipt of such discriminations would also violate Section 2 (f) of the Act.
Continuing, the Commission said the problem wou1d be somewhat different if the discounts granted to the requesting party were considered as promotional or advertising allowances for his listing of the publishers' books in his catalogue. Granting or receiving such aIJowances would be un1awfu1 " they were not made avaiJable on proportionalJy equal terms to competing customers " the Commission advised. "Thus , if your suppliers of paperback books granted proportional advertising or promotional aIJowances or facilities, such as cooperative advertising aIJowances, display racks and the like, to their other purchasers, their granting to you of an aIJowance for the listing of their books in your catalogue would not be unlawful." (File No. 633 7041, released May 10, 1966.