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Indirect Purchasers and Direct Purchasers Explained

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The Robinson-Patman Act requires that to maintain a 2(a) price discrimination action for monetary recovery, the plaintiff must have purchased substantially the same products at about the same time from the same manufacturer (or other supplier). Thus, independent retailers obtaining their inventory from an independent wholesaler do not have a monetary claim for price discrimination against a manufacturer that gives a lower price to a major retailer than it gives to the independent wholesaler. The fact that the independent retailer is an indirect purchaser disqualifies him/her from suing for monetary relief under Section 2(a) or 2(f). [Note: the indirect purchaser could sue for injunctive relief, and may well decide to add this claim to the complaint, when being drafted.]

A direct purchaser, one who purchases directly from the same manufacturer (or other supplier) which is selling to the favored major retailer does have a cause of action for monetary recovery under Section 2(a). The problem is that if the direct purchaser sues his/her supplier (or manufacturer), the supplier (or manufacturer) may invite the customer to stop buying from the supplier or manufacturer. As a result, whatever suits there are under 2(a), by a direct purchaser, are often brought after the retailer has gone out of business and is no longer purchasing from the manufacturer.

The indirect purchaser is in a better position. He can sue the manufacturer with far less fear of being subject to any reprisals, but the indirect purchaser is limited to a 2(d)/2(d) lawsuit for monetary relief, and a non-monetary claim for injunctive relief under 2(a).

What a disfavored customer can do depends on whether he/she is a direct purchaser or an indirect purchaser. That distinction must be kept in mind.