Auto parts manufacturers used two distribution channels: (1) a two-step process in which they sold to big box stores, such as Wal-Mart, Sam’s Club, and AutoZone, who then sold the parts to the end users, and (2) a three-step process in which they sold to warehouse distributors (WDs), who then sold to mom and pop auto parts stores (also called jobbers), who sold to the end users. 

The WDs and jobbers alleged that the manufacturers and big box stores were violating the Robinson-Patman Act. The manufacturers charged the WDs the official list price, while granting all sorts of discounts to the big box stores, such as allowances for defective and obsolete merchandise, volume discounts, and deferred payment agreements. For example, AutoZone only paid for a part once the item sold, while plaintiffs were required to pay within 30 days of receipt. According to the plaintiffs, manufacturers sold to the defendants below their cost of production—at a price 40 to 50 percent less than they charged plaintiffs.The defendants filed a motion to dismiss. 

Questions:

1. Did the manufacturers and big box stores violate the Robinson-Patman Act?

2. When is illegal to charge different prices to different purchasers under the Robinson-Patman Act?

3. When is it legal to charge a lower price to a particular buyer under the Robinson-Patman Act?