*1 COMPANY, UNION The GRAND Petitioner, COMMISSION, TRADE

FEDERAL Respondent. 7, Docket

No. Appeals

United States Court Circuit. Second

Argued 10, 1961. Oct.

Decided Feb. 1962. *2 WATERMAN, CLARK, Before Judges.

MOORE, Circuit Judge. CLARK, Circuit petition is a This to review order Commission, the Federal Trade order- ing petitioner, The Grand Union Com- pany, operator large of a chain retail n grocery supermarkets, stores cease engaging desist in certain busi- ness 5 of held violate Federal Trade U.S.C. upon 45. The order was a entered stipulation of facts with annexed exhibits hearing submitted to the examiner. a out of co- arises advertising arrangement, operative en- jointly by Union and a tered into Grand Douglas suppliers, group of with Leigh, Inc., firm which operates “spectacular” ad- a owns sign Broadway vertising on located City. Square Times area of New York sign, a which covered two sides of This large building, panels combined several stationary displays with one for “Epok a Panel” —a contained so-called against lamps bank of electric timed background for black which were used display projection of animated advertisements. August 6, Union-ac- Grand On proposal submitted

cepted a By Leigh, the -terms Douglas Inc. Leigh agreement lease the towas sign Union 3625-square-foot to Grand sign The bulk of per annum. for $50 stationary dis- devoted would be area by Leigh designed for Grand plays to be return, Union was to Grand Union. “participating advertisers” fifteen solicit Epok buy Panel. Each on time Piel, Jr., William of Sullivan & Crom- enter into participating advertiser well, City (John Dooling, New York Leigh agreement to rent with separate Jr., Jr., Terry, and Frederick A. of Sulli- $1,000 per panel at rate space on Cromwell, City, van & brief), New York on the twenty out of each minute for one month petitioner. for operated; panel in which minutes Elkins, Atty., participating were to E. K. Federal Trade thus advertisers panel’s Commission, Washington, (James sign per time. cent of D. C. for Henderson, Counsel, the other 25 Mcl. Gen. Union received and Alan Grand panel, Hobbes, Counsel, which it on B. Asst. of the time Gen. Federal cent advertisements, Commission, Washington, own or for its use D. could exchange time. brief), or TV No de- respondent. for radio on the for layout, copy sign, Union, by be used “knowingly inducing could * * * sign receiving portion approval special without payments and writing. contract suppliers Grand Union benefits from which were year, made proportionally ran given one and Grand equal available on *3 option two renew it for competitors,” the terms to [its] committed Leigh one-year had periods. “unfair additional methods of and un- right fair if Grand practices” the to cancel acts the contract in violation of 5§ Union fifteen contracts of failed to secure the Federal Trade CommissionAct. participating from advertisers. These transactions were before this renewed, year recently A court later this contract Paper Corp. in Swanee C., Cir., terms F. the new with modifications. Under In that F.2d twenty participating ad- case be we held there that Swanee, par- were one of the vertisers, ticipating out having one minute Broadway each in advertisers this spectacular every twenty Epok sign, Instead by on Panel. had, the participating in receiving program, time on the the cent of Clay- violated the Act, 5 ton panel, receive amended, the per Union would as 13(d). Grand 15 U.S.C. § monthly paid section, part This the rentals cent of of the Robinson-Pat- Leigh by participating man fifteen the first Act amendments to the Act, paid rental advertisers and all of the makes it pay unlawful for a seller to anything by remaining this In the five. substance value “to or the for benefit agreement 31, of” until December his continued customers for services or facilities “co-operative” “by through” ven- when the entire furnished or the customer in ture ended. connection with the sale seller’s product payment “unless such or con- during four-year period which In the sideration is proportionally available on sign spectacular operation on equal terms competing- to all other” cus- thirty par- Square, Times firms became tomers of the seller. In Swanee we found ticipating solic- advertisers. Most were payments by (Swanee) the seller Union; ited others were Grand Douglas Leigh, Inc., made for were the brought Leigh. All, project the into buyer (Grand benefit Union) all, suppliers or almost of Grand were that the services or were facilities ren- the Union. None of advertisers knew the “by through” dered or buyer. the There with terms of Grand Union’s contract being dispute no in Swanee that Leigh: paid Union little either that Grand payments were “pro- on a available nothing sign space for its portionally equal” basis, up- we therefore Union that Grand received substantial held the decision of the Commission that Leigh payments of their virtue 2(d). Swanee had violated participation. Union knew and Grand instant case ing against proceed- the Commission is agreements approved of all the between in the same trans- Leigh. participating advertisers actions, provision but not under this Many participating advertisers of the Act. co-operative promo- had programs publicly tional allowance an- as most of the Rob Act, nounced and made all cus- available to inson-Patman is aimed at sell ; Generally, however, tomers. firms ers though buyers, these it makes no mention of even participation not consider their did difficult to conceive of a Broadway spectacular part violating 2(d) of those which did not widespread promotion programs. In involve a well as a seller. Two suppliers paid provisions some instances general programs, however, apply under these Union buyers: their terms to participating co-opera- (1) 2(c), 13(c), addition 15 U.S.C. which spectacular project. payment receipt tive On December outlaws of certain n 5,1957, brokerage allowances, (2) Trade Commissionis- 2(f), complaint, charged 13(f), provides sued U.S.C. 2(f), any person cause its contravened § for activities shall “[i]t - * * * pro knowingly or receive induce priety utilizing vague pro- price which a discrimination in precise rather than the standards The Commis- hibited this section.” suggested It has Act. sion not maintain that does when invoked “should not be made of Grand benefit gov meaning question is ever the price transaction in discriminations within by specificprovisions proceeding erned 2(f), of against and thus is Union) ex buyer (Grand under Act.”2 Commission has Since the plicit authority Rather, to enforce the the Robinson-Patman Act. *4 21, rea 11, 15 the chief know- U.S.C. § § a who

here determined that ingly requirement payments son for seem such a solicits and receives complaints in the 2(d) is, issued not- be a fear that under which are unlawful § give withstanding imprecise 5 will that section’s silence § adequate engaged parties offenses buyers, of the in unfair notice nevertheless charged defenses thereto.3 unfair and relevant methods of practices. trade Proceedings misplaced. This fear seems The claims that brought frequently very this section purpose permit under 5 is to it are against of § F. T. Act violations. make and to bolster Sherman such determination outlawing Inc., Institute, U.S. 333 other acts v. Cement antitrust statutes 1010; 793, “spirit,” 68 92 S.Ct. which violate their but not their Packing Co., 257 F. T. C. v. Beech-Nut letter.1 mination, claiming this deter- 2Petitioner contests 307, 441, 19 42 66 L.Ed. that U.S. because Litigants prejudiced buyers liability left part A.L.R. free thereby; complaints that are so drafted under 2 transactions outlawed § (d), particular offense is powerless Act to im- Sherman Commission is Institute, liability pose T. indicated. F. Inc., supra. C. v. Cement under 5. Neither § why party possibility no reason There discusses is § Clayton Act. apply cannot be done be held to here. gives complaint in instant case The adequate We need not determine whether the notice the nature participating made ad- given charged, certainly and has offense to or for the benefit of vertisers Grand ample opportunity petitioner to raise de price” Union are “a discrimination in fenses. meaning 2(f). ques- within tion or not that section outlaws Moreover, Originators’ in Fashion activity petitioner’s open such as was left C., of America Guild v. F. U.S. in Automatic Canteen Co. of America v. F. T. 73 n. holding Supreme Court affirmed a 1017, 1024, 97 L.Ed. 1454. There boycott group construing Court, it, explicitly declined Clayton Act, 3 of the violated 15 U.S.C. pass “to on the whether a ‘dis- 14, constituted an unfair method of price’ prohi- crimination in includes the competition. case, however, For this we in such other bitions sections of the Act activity need not decide whether 2(e).” as §§ This issue was not ipso violates the Act facto proceedings raised below. violation 5. The Commission petitioner’s activity Commission were If the contends here solely regardless against petitioner under be- violates of whether or not Laws, 78; the Commission’s decision herein: March 148-149 n. 1. See Reg.Rep. Oppenheim, Harmonizing Guides to Sec- Complaints, Orders, (FTC Stipulations) tion Federal Trade 5 of the Commission. 12, 1960). U28,980 (FTC Aug. Acts, Act with the Sherman and (1961). Mich.L.Rev. Report Attorney, Na- General’s Study supra Oppenheim, tional Committee to note -at 836-837. Antitrust Act; may day might “plugged

it violation of the in an earlier be a objection loophole original assets we see no to consideration in [the] Sec tion amendatory [of this contention without examination without Act] legislation.” 2(f). therefore, turn, We While we are question originally sympathetic possible presented: Does to this concern over which, activity petitioner’s misplaced extend misuse we feel integral part while an of a the instant case. Clayton Act, outlawed place In the first seems to proscribed expressly nevertheless by why no reason or indeed other statute buyers coverage omitted from the of § antitrust ? statute including 2(c) while them under § widely (f); This mooted in case the omission was “inadvertent”9 more Distinguished Certainly the law reviews.5 com th “studious.” suggested mentators have that the Com were not left out because Con legislative powers mission permit here asserts them favored or wished to permit engage activity which if re proscribed sustained will it to them to disregard formulate antitrust law in sellers. The *5 specific Congress, 1936, following of investiga and to use the acts enacted vague large concept of buyers, “unfair methods com tion of chain-store to “curb petition” “supply prohibit by large has and all devices which studiously gained buyers discriminatory omitted” from anti preferences expressed by trust statutes.6Fear that over smaller ones virtue of their “spirit” Clayton greater purchasing of power.” Act will F. T. C. v. laws, emerging Henry haunt Co., 166, 168, the antitrust Broch & 363 U.S. 80 1158, 1160, wraithlike when the Commission utters 5. 4 Ct. L.Ed.2d 1124.10 The 7 the incantation “section 5.” It specificpractices has Act outlaws several con been adumbrated that the Commis nected with the sale of commodities which supply by large sion’s rule in could case it this had utilized by Clayton in the Act Con suppliers omissions left secure preferences from their specificpurpose; example, generally available; among for a for not these (1961),; 4. Howroy, The Commission com- has framed the 243 see also Utilization plaint 2(f) by in the of the the PTC Section 5 of Federal Clayton Act, claiming that Grand Union Trade Commission as Act an Antitrust knowingly illegal Law, (1960). induced or received 5 Antitrust 161 Bull. payments. might Inducement be read as Handler, supra 6. note 16 The Record requiring receipt, not hence 385, 402-403, 75, 91, quot- 71 L.J. Yale though could violate 5§ even the seller ing Simplicity from F. T. C. v. Pattern 2(d). did not 5 violate Thus § Co., 55, 67, 360 U.S. apply buyer’s attempts be read to 3 L.Ed.2d 1079. 2(d). to have the seller violate § We receipt question, supra Oppenheim, need not decide 7. note at 837-838. shown here. was Handler, supra note 16 The Record Alexander, 5 Section 71 Yale L.J. Act, Trade Commission A ex Ma- Deus 9. One the authors of the Robinson- Tragic Interpretation china suggested Patman Act has the fail- Act, Syracuse L. explicitly ure to include under the ban (1961); Handler, Rev. 317 Annual Re- receipt pay- §of inducement and Developments, view Antitrust 16 The violating (e) ments was in- (1961); Handler, Record Recent Dunn, advertent. See Developments, Antitrust 71 Yale L.J. 75 (e), New York State Bar Association Oppenheim, supra (1961); 2; Rahl, note Symposium Robinson-Patman Act Does Section 5 of the Federal Trade (CCH 1946). Act Extend (1960); Note, Representative Act? 5 Antitrust Bull. 533 10. See remarks of Patman, (1961); Note, Cong.Rec. 61 Col.L.Rev. 291 (1936). 49 Geo. Note, (1960); L.J. 379 8 U.C.L.A.L.Rev. agreements brokerage “dummy” payments11 gas by operators were station pump disproportionate equipment supplied by use Sin- Despite solely evi clair below gasoline pump cost similar allowances.12 Sinclair purpose Act, operators reasons did for bind dent not not to * ** Congressional his apparent “use or deal in commodities many practices competitor” made of a tory, were Sinclair, of these and that specifically apply. one of therefore unlawful for 3 did Since in both underlying eases participants activity signifi- economic in the the economic themselves, cantly different transaction. outlawed that. contrary however, falling were declared outside its “spirit” public policy, question using unlawful. interest and therefore no violations, “supplement Since, in the case of bolster” the preference Act no unlawful there could be raised.14 received unless it was made a seller Curtis, In Sinclair and did Court by buyer, did clear rejection not consider its buyers to continue not intend to sanction charge dispositive Act issue, activity.13 engage it went on to consider the of a 5 in the possible for resort to Thus the basis 5 violation on its own merits. substantially from instant case differs The later decision in F. T. C. Eastman early presented decisions Co., Kodak 274 U.S. delineating scope as F. however, clearly L.Ed. question raised the activity v. Curtis Pub. 210, proscribed Clayton might, and F. T. C. v. Sinclair virtue of its *6 450, Co., 463, Refining 261 U.S. beyond S.Ct. statute, exclusion from that the 67 L.Ed. 746. In the Kodak, Curtis Sinclair reach of 5. In the § dealing arrange- FTC attacked exclusive 5, issued a cease and desist order under § Clay- directing ments under both 3 of the Eastman Kodak and Lab- Allied ton Act. In both cases the found agreement Court oratories to terminate an arrangements whereby agreed did not foreign- violate the Allied use agreement Clayton Act. film, The Curtis was made on condition that Kodak would agency, sale, to be one of operate held and not film several laboratories it prohibition therefore not within acquired the compete had with Allied. The Similarly, in 3. Sinclair the Court held further order directed Kodak to divest Henry Co., 11. knowledge F. T. C. v. Broeh & 363 U.S. to our has not been utilized 166, 169, 1158, 1124; against 2(d), although SO S.Ct. 4 L.Ed.2d violators of § the Simplicity Co., sufficiently F. T. v. Pattern is broad to cover party U.S. 79 S.Ct. 3 L.Ed.2d 1079. either to a transaction in violation thereof. Report 12. See Final on the Chain Store Investigation, Sen.Doc. No. 74th Curtis, agency agreement 14. In created Cong., (1934); 1st F. Sess. T. C. v. relationships responsibilities, a set of Simplicity Co., Pattern 360 U.S. unlike which would have resulted S.Ct. 3 L.Ed.2d 1079. from contracts of sale. Under the anti- Indeed, 3 of the trust laws difference between Act, 13a, agency 49 Stat. relationship U.S.C. § and an “sale” is not any per- simply form, makes it criminal offense for one but be “out- * * * party any son “to abe come-determinative.” United States v. * * * Co., of sale which dis- General Elec. 47 S.Ct. knowledge against criminates his Sinclair, 71 L.Ed. 362. And competitors purchaser, that, very heart of a 3 violation —sale * * * any advertising charge buyer’s pur- service conditioned refusal granted purchaser goods competitor over and chase the of seller’s * * * lacking. Moreover, above service —was in neither * * * charge proof available at the time case was there to com- competitors respect said petition, of a sale of which would have been neces- goods grade, quantity.” Clayton quality, sary of like under Act. See How- frequently invoked, rey, supra This section is not note at 166. policy. presents very The Court itself the laboratories. Thus Kodak dif- commanding upheld questions posed by termina- the order ferent from those agreement, situation, aside that tion but set instant case, for, unlike the earlier ordering part utilizing v. divestiture. T. C. F. is not here Co., supra. Eastman 5 to Kodak create a substantive extension of agree Act. We do not had earlier held that the Com- It been opinion represents the Commission’s here power mission lacked 7 and §§ attempt “supply has of the order divesti- studiously omitted.” they assets, ture of quired even if had been ac- accept Nor can we the notion that the means of an stock legislating Commission is a “new here purchase, “purpose since the prohibition.” practice antitrust The [Clayton] prevent act continued was to clearly proscribed by 2(d); itself is holding peculiar of stock and the evils novelty solely application of 5 incident thereto.” F. T. C. West- buyer’s knowing receipt to a payments. of unlawful 554, 561, ern Meat 272 U.S. up- is not 175, 178, 71 The Court setting Congressional policies; Kodak considered Meat’s hold- Western proceedings did “circumvent the ing give Act did not illegality prescribed essential criteria of power dispositive Commissionsuch express prohibitions whether have such activity, Act.”17 No economic once law- powers under C. Eastman ful, suddenly brought within the Co., supra, Kodak 274 U.S. prohibition of the laws. Juris- antitrust 71 L.Ed. 1238. For this rea- diction, perhaps, expanded has been son, unnecessary it was to consider the technical confines of but acquisition and retention of the only fully policy to realize the basic assets “unfair constituted methods of the Robinson-Patman prevent which was to though competition,” even control of the buying power. abuse integral illegal part assets was agreement. decision Commission’s here 688, 71 L.Ed. 1238. *7 entirely pur is pose consistent with the basic policy While the situation in Kodak bears 5 of the Federal § case, similarities to instant there are Trade Commission Act. That section did controlling. marked differences which competition”; are not define “unfair the con explicitly cept Western Meat flexible, held that 7 of was left so that the § Commis acquisi- apply Congressional extended Act to sion could the broad ownership. myriad tions stock The'Court rec- standard to the fact situations ognized that it was harmful effect which would arise. The Act was intended holding companies give and other forms power to to ownership designed every practice, stock which 7 was existing “hit at trade then contrived, This notion curb. 7 lim- or thereafter which restrained ownership ited to the evils of stock lead to such re reiterated stopped the Kodak incipient decision. Since straint if not in its stages.” there found the Court that the Institute, limitation F. T. C. v. Cement Inc., supra, of the of 7 to ownership 683, 693, stock 333 U.S. 68 S.Ct. specific Congressional purpose, 799, Activity 793, reflected 1010. L.Ed. public 5 could resort not be policy based on the “runs counter to the de supplement need to clared in the Sherman and Acts” supra. Report Attorney 15. note 6 See See General’s Study National Committee the Anti- Tait, dissenting 16. Commissioner below. Laws, trust March 149 n. 78. Co., Reg.Rep. The Grand Union Trade (FTC Complaints, Orders, Stipulations) 12, 1960). 1128,980 (FTC Aug. competition. support seem to gress is an unfair method of this conclusion. Con- Originators’ America established Guild Com- Fashion 457, 463, 61 C., supra, expert body apply mission as an F. T. U.S. v. imprecise Moreover, 5, Act was 703, 706. standards of and “[i]ts S.Ct. stop expert weight opinion great prophylactic: intended to entitled to Siegel reviewing incipiency full- when acts which courts.” Jacob monopoly undue Co. F. T. v. blown would 327 U.S. lead 758, competition. 761, 888; v.C. F. T. hindrance of F. T. C. v. Ce- Co., Institute, supra, 51 S.Ct. ment Inc., Raladam 587, 283 U.S. 333 U.S. 1191; 720, A.L.R. 75 L.Ed. S.Ct. 793. no reason to We see Originators’ upset America Fashion Guild Commission’sdetermination. C., supra; Motion T. F. Petitioner further contends that Advertising Co., 344 U.S.

Picture 392, Service injury prove the Commission must 97 L.Ed. 73 S.Ct. competition as an element of the § incon- Grand Union’s activities disagree. violation. We Section purpose sistent with the illegal per defines an offense which is se. Clayton Act, resort one need not Simplicity Co., F. T. C. v. Pattern metaphysical to denominate subtleties L.Ed.2d why unfair com- There is no conduct an method of reason this rule should its apply as well as to the petition. represents a Con- seller. tinction; has made no such dis gressional payments determination that 2(f), being corollary participating those made such as 2(a), requires proof to com to or for the of Grand advertisers benefit petition brought against buyers, in cases give a firm in Union’s Union 2(c) applies per buy while se rule to advantage competi- position an over ers as well as sellers. Ibid. Since § tors, especially over smaller retail firms. integral is here utilized to part reach an has found The Commission that Grand of a violation the rationale knowingly payments received the poli is to fulfill though equivalent were even allowances prohibition, cies of that grocers, would seem to other not made available large retail legisla unwarranted amendment of Thus, or small. benefit of its apply size, tive scheme to Grand Union was able to secure a different standard competitive competitive benefits form of free effects to applies and cash than it to the seller. supplies Simplicity lowered the real cost of the it Cf. F. T. C. v. Pattern purchased participating supra, ad- *8 making 2d 1079. In some, all, vertisers —benefits de- but not contrary public policy.18 to clared be to outlawed original illegal per se, One of the aims of 5 to Robinson-Patman Con against giant “protect small indicated that business those selected for competitiors.” Co., per always T. C. F. v. Raladam se treatment led to the un supra, 587, competition. 283 51 per U.S. S.Ct. desired effects on And Using policies 5; 591. as a se violations not unknown under § yardstick, illegal price-fixing, the Commission has declared declared se under Union’s Grand conduct to be “unfair.” the Sherman Act in United States v. meaning plain Co., The the word would 392, Trenton Potteries 273 U.S. Report

18. The Senate own business and is thus enabled to on § stated: unjust portions vendor substantial “Such allowance becomes his when shift advertising cost, agreed is his oivn the service rendered as ivhile his paid for, when, competitor, rendered, or if smaller mand such unable to com- payment grossly allowances, value, is in excess of its cannot do so.” when, any [Emphasis supplied.] Sen.Rep. in case is or customer 1502, No. deriving equal it Cong., (1936), to his 2d 74th 7 Sess. benefit 100 989, case, presenting an ad A.L.R. 50 71 L.Ed. mittedly_noyel~ap,plication Beech- 5 T. C. v. of 5. F. a violation Act, Packing 42 Federal Co., Trade Commission supra, 257 U.S. Nut 882; specificity we as to the need for 307, 19 A.L.R. said 150, 66 S.Ct. Paper orders Swanee Manufacturers’ Container Standard Corp. Cir., C., supra, 262. v. F. T. C., Cir., F.2d 291 F.2d Ass’n F. T. especial significance.20 problems 837-838, unique has Of course there are provisions under the application Federal As new 5 of the enforcement of § buyer Act, who 15 U.S.C. so Trade Commission Act 5(1) engages 2 under Federal Com transaction outlawed in a 45(1), mission (d) U.S.C. violations Act. Section pro of the ceedings sellers order payments are enforceable civil not outlaw all does the federal courts. Adminis rendered or facilities services agencies customers; trative have a wide discretion declares propor enjoining to frame past practices aon orders continuation of those which are offered unlawful, Unlike all found as tional basis to customers. well similar seller, over those or related future has no control violations. they

payments- Bros., Inc., are T. C. v. Mandel cannot U.S. insure —he may difficult 79 “proportionalized.” be S.Ct. It 893. But this L.Ed.2d injunction permit seller is discretion does out whether even find just making equal proportionally allowances all violations the statute be single in seller’s .violation are often cause a has been available. files; data found. publicly Express Pub. if information N. L. R. B. 426, even available, make be difficult 85 L.Ed. Grand necessary deter Union’s cannot be considered violations subtle assessments ^flagrant. highly In this uncertain area “proportionality.” It be a mine Union thelaw Grand cannot be held to who burden to harsh hold that certainty part known its payment later found induces or receives a engaged a violation transactions was disproportionate there has to be by arrangement here ter attacked competition. has The Commis in unfair minated, nothing in and there is the rec correctly limited the this case sion in suggest 'to Union ord intends that Grand “knowing receipt or complaint induce activity. related resume this payments; disproportionate ment” of t.o finding that the order therefore hold We supports record and the practice particular found limited to the knew, in the exercise of Paper known, violate statute. Swanee should have reasonable care Cir., C., supra, Corp. v. F. T. been made F.2d received had not Further, 833, 838. Grand Union proportionally to its customers. since available pay received as well as Canteen Co. of America v. here solicited Automatic Cf. ments, C., supra, also the order should limited F. T. knowing prohibition receipt of either *9 Co., Cir., for are not limited to allowances Tea F.2d cer 19. Sellers program. type promotional Corp. single tiorari denied General Foods a v. allowances, Grocers, They may offer to customers Wholesale State variety programs a tailored 3 L.Ed.2d 352. for needs, re- and still meet the customer’s quirement equality.” separate “proportional peti a 20. Grand Union- has filed supplier provide seeking dona the must tion review But modification of fide alternatives; he cannot offer a the broad terms of the order. reasonable But since sought original a service if “the status relief can customer economic this be the petition, Paper Corp. business him unable s.ee [his] renders Swanee v. F. accept offer,” Cir., grant the is “tanta- to for that T. 291 F.2d we no offer Commission’s motion to mount to to him.” State the dismiss Whole- petition. Pacific sale Grocers Great Atlantic & second watchdog for Department was the receipt. Justice We knowing and inducement and Act violations and Sherman ¿oduqement have may decided competition” for “unfair the Commission solicitation to mean be construed practices in com- used as that term was not believe receipt, dowe without and although legal parlance1 mon in tested first this issue of law be overlapping. some and desist cease a a enforce order giant growth of the the result of As The decision of mid-thirties, stores, by the chain 13(Í), Rules Rule affirmed. Pursuant to large quantity assumed had greater Appeals Court of the United States economy place than was in our far Circuit, for the Second Congress passed the true when conformity with “in shall enter an order years twenty earlier. and Acts some FTC may petitioner opinion,” to naturally power Such concentration counterpro- filing object by timely aof placed many in a non- units smaller posal. Investigation en- competitive position. investigation had re- sued. After its specific with Judge (dissenting). vealed the factual situations MOORE, Circuit Congress set cope, which it desired importance be ease is to of this formulating equally itself to the task of and found not in its “cease so much remedy evils dis- statutes large grocery chain order that desist” conduct closed so far as it certain believed seeking promo- for itself refrain from The result unlawful. should be declared were tional benefits from sellers probably was the Robinson-Patman amendments granted but others Congress must Act which holding, effect, Federal its hoped remedy such evils. arrogate itself Trade Commission can Congress legislative powers when- reading amendments, pur- In these Congress appears ever there field which pose kept must of their enactment be the Commis- has not covered but which enacting legislation, Congress mind. legis- sion believes should be covered presumed to intend to authorize must be making. lation of own its prohibit or to those acts which are em- achieving purpose For the moderate language par- braced within the over-simplification brevity, ticular statutes enacted. And where the regulate order. To business various unambiguous, clear and n inimical our deemed to be coverage scope of the statute should economy enterprise public free and the thereby. expressed be circumscribed As passed the Sher- welfare had Congressman co-sponsor, Patman, man, Federal Trade Com- protect independent “to his bill was merchant, (FTC) Specific practices mission Acts. public serves, whom he (see prohibited were and in the FTC Act buys, the manufacturer from whom he competi- 5(a) (1) “unfair methods of exploitation competi- his chain tion” were declared unlawful. Cong.Rec. (79 (1935)). Thus, tor” telling upon during passed intent Time which each of the specifically quite Department and the seller was used the Justice Acts they do, prosecute could could each re- activity. part, orbit of within its own Con- strain violations. For the most brought Attorney General, nothing opinion these find We recent specific. Henry must clear Broch & orders *10 7 L.Ed.2d good finding “opposed to morals because char which is inconsistent with our fraud, by deception, faith, bad the Commission’s orders are too acterized Gratz, suggests, oppression”; FTC v. broad. As that case or situa subject agency tions where orders are (1920). to automatic enforcement in civil suits writing obviously thereby a series was this section general “price” applying of definitions to the because and be- is not involved competition” FTC cause term it does not “unfair wish be burdened to Quite pro- proof required contrary, support Act. to to violation. hibiting manner no certain complaint hybrid. The is a Certain dependent upon facts under- the basic “knowingly 2(f), words of in- section lying legal unfair com- conclusion of ducing receiving,” are with combined completely petition. The are amendments provisions namely, benefits integrated They unambiguous. do and proportionally not made “available on any sec- support from not have to receive equal terms.” The Commissionthen adds (except tion of ment). for enforce- the FTC Act phrases 2(a) prac- to found in that the subparagraphs is Each of the complained prejudice tices of “are to the designed pur- separate to serve its own competitors public” and and the pose. tendency and have a to obstruct and re- charge strain sellers, against commerce. Unable 2(a),’ directed Section (much 2(a), prove) less price a violation be- prohibited discrimination 2(d) 2(f) avoid the unable to such purchasers where but tween inexorable mathematical three anti-competitive law discrimination had n zero, relating zeros still total (e), (c) and effect. Sections primarily precipitately brokerage abandons the and to to sellers generously which had so its contributed applicable services, here. are not language (but blessing) its sections two sections here involved are complaint majeure seeks the 2(f). 2(d), a seller’s Section force protection alleging of its act, natal section, pay “to or unlawful to makes it guilty Grand Union is of “unfair methods compensa- a customer” for the benefit of prac- and unfair acts and by the cus- tion for services furnished commerce, tices in in violation of Section on tomer which are not made available 5 of the Federal Trade Commission Act.” proportionally equal other terms all Having just cast off sections competing in the distribution customers (f), quickly words, returns to commodity other sold. (by process) them to turn some alchemic gives make one he must seller what the paragraphs two these not violated words are to the other. No available Grand Union into making a violation of section it unlawful found in the section for the to receive to include for services. The failure The Commission cannot find direct buyer clearly in- not have been could and, therefore, Act violation very purpose rely advertent because the on “spirit” a violation of its as legislation power of the constituting to curb the competition. So, unfair indeed, buyer. Moreover, would, likewise, mass majority is the forced to concede in a statute de- anomalous activity that Grand Union’s “is not ex- signed encourage competition put pressly proscribed by that statute [sec. stamp 2(d)] who the attempted advantages of unlawfulness or indeed other antitrust secure commercial 96) better (Maj.Op., p. statute” and that making using for themselves before Commission is section “not- purchases. withstanding that section’s silence toas buyers” support conclusion of un- buyer’s mak- is a section competition by fair (Maj.Op., ing for him it unlawful “to induce or re- p. 95). price.” a discrimination in ceive Two qualifications specified. case, majority must concedes, The act This “knowingly” admittedly presents application be done discrimina- “an novel tion, “price,” limited to must be one of 5 of “prohibited yet which is this section indeed it And does. [Sec. Act”—as Commission, novelty however, really 2].” is not not so much as there *11 analyst developments presented good a dif- been an illustration of astute of is a namely, field, in “The judicial philosophies, the antitrust said: has ference in plain implication opinion is that are whether Commissions courts Commission, interpret Con- it discovers whenever the laws which enforce legislative they limitations in should which has enacted or judicial legislation proc cannot create laws which be overcome the liberal statutory construction, they opinions have esses of can in believe their vagueness Thus, in neither utilize the convenient concept of been enacted. this case competi majority can of ‘unfair of nor the methods Commission why independent power Congress, care- tion’ source understand a of fully Congress studiously supply ‘to has delineated the wished sanctions impose against buyers, omitted’111 111: “Federal [Footnote sellers and buyers coverage Simplicity of Trade Commission Pattern omitted from 2(d). any justifying For rea- want of they (1959)] son, enactments.” that the omission must 2d from its conclude scarcely (Handler, Develop flat- Review of Antitrust have “inadvertent” — tering Congress ments, Record, to a Ass’n the Bar of had the benefit investigation subject City lengthy 7, p. York, of a of New Yol. No. dealing October, 1961.) quite capable and showed itself 2(f)) (2(c), with those who received majority recognize frankly that, felt it should deal with insofar as it them. “Distinguished sug- have commentators consequence gested Another Commission that the Commission here asserts judicial legislation such legislative is that all powers which if sustained will always post are ex laws It has permit it too antitrust in reformulate law facto. (if only policy a the disregard Congress” been point from specific sound acts play) of view of fair business- “sympathetic and are concern over opportunity men to know possible have they of 5” find “no misuse but permitted which proscribed that which specific why Congress reason omitted they coverage so that act accord- buyers 2(d)” and, from of § system ingly. permits When our hence, that the omission must conclude group they individuals whether more than have been inadvertent studi- judges commissioners or however, substitute If, ous. the Commission under personal conceptions “spirit” pow- Section 5 has such broad unlimited statutes, we, instead of words of our omissions, ers to fill in assumed then “the indeed, government of men a acts antitrust laws. field which the Commission administers essentially superfluous” (Handler, pp. are Regardless disclaimer, of half-hearted 402-3). majority sup- rewriting actually porting its are decision Moreover, even if be assumed that 2(d) 2(f). They either are section can fathom the unenact- adding substance, either intent and amend ed either “and also words it shall unlawful 2(f) (by way or section section person to receive such benefits” Act) Section 5 FTC so as to reach they deleting 2(f) the words knowingly receiving price pro- “discrimination which is payments, ques- still remains the substituting by this section” and hibited injury of whether tion “any benefits words set forth partici- While must be shown. a seller’s As above.” Tait Commissioner pation transaction is se directly says dissent, in his clarion so violation, buyer’s participation in a 2 legislates-a effect, “in decision new anti- buyer’s (f) is not. A conduct prohibition.” trust condemned cannot be unless Referring can to the Commission’s deci- show to com- sion, Handler, Thus, long petition. Professor if we who assume with *12 nothing incongruous majority used There Section can be about holding buyers Union, we find reach as Grand Commission must the injury competition enjoin still to look the must decide whether enjoin 2(f) or to “indicia when need not find the to determine the other so enforcing illegality.” answering ques- of tion, this seller. In the case later it is again specific Congressional majority prohibition; it can a feels Congress clearly whereas, case, pulse major- in the instant sense of Congress allowing ity, effect, and concludes that legislate general buy- grant to authority have wanted the to make under its court participation er’s in a per My senses se violation of Section 5. I would set aside Commission’s keen, are not find evi- so and I cannot order. Congress expanded dence that would have desired to rather than it —had buyers. extend Act to Congres-

Without evidence of responsi- intent,

sional we should not be creating per

ble se violation. To do ignore policy so is to conflict of the with the other laws, including antitrust the FTC Act. dissenting Frankfurter, See Mr. Justice AMERICAN NEWS COMPANY and The Advertising in FTC Motion Picture Company, Petitioners, Union News Service (1953). To the extent COMMISSION, FEDERAL TRADE the Robinson-Patman Act inhibits Respondent. price competition generally, and service No. Docket 26857. objective often conflict with the Appeals United States Court of protecting of the antitrust laws of Second Circuit. fostering vigorous competition for the 10, 1961. Argued Oct. public (and benefit of not for the competitors). benefit of the individual 7, 1962. Decided Feb. Supreme that, Court has indicated Congress where left courts free determination, make this conflict is to in favor be resolved of the “broader

policies” of the antitrust laws. Auto- matic Canteen Co.v. F. T. (1953). L.Ed. 1454 illegality The narrow areas se created Robinson- expanded Patman Act should buyer’s not make us. We should in- receipt promotional ducement illegal in allowance the absence of a

showing when only prohibition directed allows defense. illegality 2. “The identical Att’y indicia Trade Commission Act.” Gen. moreover, govern, Rep. (1955) Commis- whenever Nat’l Comm. Antitrust pursue arrange- (Judge Oppen- chooses to sion exclusive Barnes and Professor competition’ Co-Chairmen). heim, ‘unfair methods ments as by Section 5 of forbidden