Automatic Canteen Co. v. Federal Trade Commission

346 U.S. 61 (1953)

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Automatic Canteen Co. v. Federal Trade Commission

United States Supreme Court
346 U.S. 61 (1953)

  • Written by Heather Whittemore, JD

Facts

Automatic Canteen Company (defendant) operated over 200,000 vending machines throughout the United States. To supply its vending machines, Automatic Canteen purchased large amounts of candy and other confectionary products from various suppliers. Automatic Canteen was charged lower prices for its candy than other purchasers of candy from its suppliers. Automatic Canteen would often tell potential suppliers how much it was willing to pay for candy without considering how much the suppliers charged their other customers. Through its actions, Automatic Canteen was charged up to a third less than other customers of the same suppliers. The Federal Trade Commission (FTC) (plaintiff) accused Automatic Canteen of violating § 2(f) of the Robinson-Patman Act. Section 2(f) created liability for purchasers who knowingly induced or received lower prices from sellers than other purchasers received. The FTC held that Automatic Canteen violated § 2(f) and issued a cease-and-desist order against Automatic Canteen. Automatic Canteen appealed, and the court of appeals affirmed the FTC. As this case was the first instance of the FTC accusing a purchaser of violating § 2(f), the Supreme Court granted certiorari to explain the mechanics of a § 2(f) claim.

Rule of Law

Issue

Holding and Reasoning (Frankfurter, J.)

Dissent (Douglas, J.)

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