Federal Trade Commission v. Sun Oil Co.

371 U.S. 505 (1963)

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Federal Trade Commission v. Sun Oil Co.

United States Supreme Court
371 U.S. 505 (1963)

  • Written by Heather Whittemore, JD

Facts

Sun Oil Company (defendant) supplied gasoline to almost 40 independent Sunoco dealers in Jacksonville, Florida. One of the independent dealers was Gilbert McLean, who sold gasoline across the street from another service station called Super Test. Super Test usually charged its customers two cents less per gallon of gasoline than McLean did. After Super Test lowered its prices even more, McLean asked Sun Oil to lower its prices so he could better compete with Super Test. Sun Oil did so, offering gasoline to McLean at almost two cents less than it charged the other independent retailers. McLean’s business improved through his ability to offer his customers lower prices, but the business of the other independent retailers suffered. The Federal Trade Commission (FTC) (plaintiff) accused Sun Oil of illegal price discrimination in violation of § 2(a) of the Robinson-Patman Act and issued a cease-and-desist order against Sun Oil. Sun Oil admitted that it violated § 2(a), but Sun Oil argued that it was allowed to do so in order to match the prices of McLean’s competitor, Super Test, through the meeting-competition defense provided by § 2(b) of the Robinson-Patman Act. Sun Oil relied on the purpose of the Robinson-Patman Act, which was enacted to protect small independent businesses, to argue that its actions should be allowed under the § 2(b)’s meeting-competition defense. The United States Court of Appeals for the Fifth Circuit set aside the FTC’s cease-and-desist order, and the FTC appealed.

Rule of Law

Issue

Holding and Reasoning (Goldberg, J.)

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