The Supreme Court’s decision in Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc. (No. 04-905), issued today, suggests that it will be the unusual case in which the Robinson-Patman Act’s prohibition against price discrimination applies to sales involving special-order products sold through a customer-specific competitive bidding process. 

The case involved allegations that Volvo violated the Robinson-Patman Act by providing different prices to different Volvo dealers for special-order trucks sold through a competitive bidding process.  The Court’s opinion emphasized that "[i]nterbrand competition," as opposed to intra-brand competition, "is the ‘primary concern of antitrust law,’" and that the "Robinson-Patman Act signals no large departure from that main concern."  It observed that the central concern of the Robinson-Patman Act "ordinarily is not involved when a product subject to special order is sold through a customer-specific competitive bidding process."  And it refused to accept an "interpretation [of the Act] geared more to the protection of existing competitors than to the stimulation of competition." 

Nevertheless, the Court declined to hold broadly, as Volvo and the United States Justice Department and Federal Trade Commission had urged, that the Robinson-Patman Act "does not reach markets characterized by competitive bidding and special-order sales, as opposed to sales from inventory."  On the record before it, the Court found that the Volvo truck dealer "did not establish that it was disfavored vis-à-vis other Volvo dealers in the rare instances in which they competed for the same sale -- let alone that the alleged discrimination was substantial."  Indeed, it found only one sale opportunity where the truck dealer had both received a less favorable price and lost the sale to another Volvo truck dealer.  The Court held "if price discrimination between two purchasers existed at all, it was not of such magnitude as to affect substantially competition between Reeder and the ‘favored’ Volvo dealer" and therefore violate the statute.  

While the Supreme Court left open the question whether the Robinson-Patman Act could ever be applied to sales involving special-order products sold through a customer-specific competitive bidding process, the Court’s opinion suggests that such cases are likely to be rare.