Thanks for clarifying the legal use of "commodity" -- I did not realize it essentially means "tangible product" as opposed to a service.
I did find some links that make me wonder whether Robinson-Patman really has much practical application to this case.
First, FWIW, Wikipedia's entry on RPA says it does not apply to sales to OEMs:
In general, the Act prohibits sales that discriminate in price on the sale of goods to equally-situated distributors when the effect of such sales is to reduce competition. Sales to original equipment manufacturers (OEM) are not subject to RPA. Price means net price and includes all compensation paid. The seller may not throw in additional goods or services. Injured parties or the US government may bring an action under the Act.
en.wikipedia.org
Second, my interpretation is that AMD must prove damages under section 2.a
The injury to competition element is more difficult to establish. Harm to only the individual plaintiff is not enough to prove injury to competition. Although the plaintiff need not prove actual harm to competition, due to the difficulty of proving it in court, there must be at least a "reasonable possibility" that the price discrimination affected competition in the overall market for the product. As noted earlier, there are two types of injury to competition due to price discrimination: primary line injury and secondary line injury. Primary line injury refers to injury to the competitors of the seller, who lose the business of the buyers who take advantage of the seller's discriminatory price. Secondary line injury refers to injury to the competitors of the buyer, who are unable to take advantage of the discriminatory prices obtained by the buyer.
A primary line injury may be proved in two ways. A plaintiff may present evidence of the seller's intent to destroy a competitor, either by direct evidence or indirect evidence such as business tactics and unexplained price moves. Otherwise, the plaintiff must prove that the seller's discriminatory price caused a substantial change in market shares in the product. The latter is nearly impossible to prove, because courts, commentators, and economists have frequently rejected the idea that discriminatory pricing poses a long-term threat to competition. It is also difficult to prove a seller's intent to destroy a competitor, because a seller isn't likely to leave evidence of such an intent and it is difficult to infer such an intent. One way to prove intent to injure competition is to show that the seller made sales at prices below the seller's average cost of producing the product long enough to force equally efficient competitors out of business. Because of the difficulties in proving a primary line injury under the Robinson-Patman Act, plaintiffs alleging a primary line injury from a discriminatory price are more likely to seek a remedy under other antitrust statutes.
A plaintiff claiming a secondary line injury must also meet several requirements to prove injury to competition. The plaintiff must show that it competed in fact, not potentially, with a buyer who received a discriminatory price, that the price difference was substantial, and that the price difference existed over time. Once these factors are established, a presumption is created that the price discrimination injured competition. This presumption can be overcome only by evidence proving there was no causal connection between the discriminatory price received by the buyer and lost sales or profits of the buyer's competitors.
answers.com
This is confirmed in a speech by the FTC secretary in a speech in 1995.
15 U.S.C. 13(a). The crucial question, with respect to section 2(a), is the type and extent of injury to competition that can satisfy this standard. 27 Two types of possible injury are most commonly alleged. The first is often referred to as "primary line injury," because the actual or threatened injury is to competition between the seller granting the discriminatory discount and other sellers. 28 In Brooke v. Brown & Williamson, the Supreme Court held that
primary-line competitive injury under the Robinson- Patman Act is of the same general character as the injury inflicted by predatory pricing schemes actionable under 2 of the Sherman Act. . . . With whatever additional flexibility the Robinson-Patman Act standard may imply . . . two prerequisites to recovery remain the same. First, a plaintiff seeking to establish competitive injury resulting from a rival's low prices must prove that the prices complained of are below an appropriate measure of its rival's costs. . . [Second, the plaintiff must demonstrate] . . . that the competitor had a reasonable prospect, or, under 2 of the Sherman Act, a dangerous probability, of recouping its investment in below-cost prices. 29
Similarly, the Commission has held that prima facie primary line injury can be established, subject to rebuttal, by showing that a seller engaged in predatory conduct, such as by making sales at prices below average variable cost for a significant period of time. 30
The second type of injury is often referred to as "secondary line injury," because the actual or threatened injury is to competition between the favored customer of the seller who receives the discriminatory price and the seller's disfavored customers. 31 The existence of this type of injury may be established directly by evidence of displaced sales. It also may be established "prima facie by proof of a substantial price discrimination between competing purchasers over time;" 32 that is, it "may be inferred from evidence that some purchasers had to pay their supplier 'substantially more for their goods than their competitors had to pay.'" 33 The inference of injury can be overcome by "evidence breaking the causal connection between a price differential and lost sales or profits." 34 Evidence on that score might include a showing that the advantaged and disadvantaged buyers operate in different geographic markets or at different levels of distribution, or for other reasons are not in competition with each other.
ftc.gov
The primary line requires proving that the sales price was below cost. The second line method applies to the injuries for those buyers that were discriminated against and would not apply to AMD.
So I don't see too much of relevance here as I don't expect AMD to be able to prove that prices were below cost. Since I'm not a lawyer, it's very possible I'm mis-reading or misinterpreting.
Misen |
