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Federal Trade Commission v. Morton Salt Company
United States Supreme Court
334 U.S. 37 (1948)
Morton Salt Company (Morton) (defendant) sold table salt. Morton used a quantity-discount system to set prices. The price paid by a buyer depended on the quantity purchased. Only five companies were large enough to buy the massive quantities necessary to take advantage of the lowest price. As a result, those five companies sold salt at retail prices that were lower than the wholesale prices for other competitors. The Federal Trade Commission (FTC) (plaintiff) sued Morton, arguing the quantity-discount system was a method of price discrimination in violation of the Robinson-Patman Act. Morton argued its quantity discount was not discriminatory pricing, because it was available to any purchaser that bought a given quantity of salt. Morton also justified part of the quantity discount on grounds that larger quantities were cheaper to ship. The court of appeals agreed with Morton, and the United States Supreme Court granted certiorari.
Rule of Law
Holding and Reasoning (Black, J.)
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