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Restraint of Trade? 

MOD. NOTE:  Further to the message suggesting that librarians remember
about the Robinson-Patman Act, our Liblicense project attorney did
some research on the matter.

As we read this, we should remember that the message is NOT intended
to be legal advice but is for informational purposes only.  Readers
in need of advice should, as always, consult with their own experts.

__________________________
Rodney Stenlake wrote:
Date: Fri, 11 Apr 1997 08:35:57 -0400
From: Rod Stenlake <rodney.stenlake@yale.edu>
Subject:  Robinson-Patman

About Robinson-Patman --Section 2(f) makes it illegal for a buyer
"knowingly to induce or receive a discrimination in price which is
prohibited."  I believe that what this was intended to do was to prevent
large buyers or groups of buyers from pressuring a seller to give them a
better price than the rest of the market.  However, it appears that the
intent of that provision has been whittled down so that a buyer can only
be liable if the seller is violating the act as well. 

Groups of buyers who form cooperatives designed to enable members to
purchase (and therefore to resell) at a lower price have been found liable
under the act.  (I suspect this would not apply to educational libraries,
as libraries don't usually resell the services--if they did charge user
fees, then maybe, but then university libraries don't usually compete with
each other).

Liability under the act requires discrimination in the price for the sale
of a commodity that is not justified by cost or meeting competition.  As
an historical note, the RP Act was passed to protect small mom and pop
stores from going out of business because of the ability of large chain
stores to charge cheaper prices. 

The act applies only to sales--not leases. And it applies to sales of
"commodities", not services.  Since licensing agreements rarely involve
the sale of anything and usually involve provision of a service, it is, as
I interpret the matter, doubtful the act would apply. 

On a practical note, the government doesn't seem aggressively to have
enforced the RP Act since the 1970's.  I would be interested to hear
of other interpretations and experiences of this matter particularly
as it could or has applied to educational licenses.


Rod  Stenlake


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