THE CLAYTON ACT. II. PRICE-DISCRIMINATION
There remains the practice of price-discrimination which was made unlawful by section 2 of the Clayton Act. It is clear that what the 1914 Congress had in mind when writing this section was the vigorous local price-cutting that some of the big 'trusts' had been found to adopt as a weapon against inconvenient competitors. With its huge resources the 'trust' could cheerfully face a period of selling well below cost in a selected area where, for example, an obstinate 'independent' was refusing to sell out or where an impudent new entrant was making inroads into the local market. It was not uncommon for small concerns to be put out of business by predatory price-cutting of this kind. In short, the competition which the Congress regarded as threatened by price-discrimination was that between the discriminating supplier and his competitors; they were not much concerned with the effect of discrimination on the supplier's customers.
It was realized that not every difference in price was discriminatory; that, for example, a bulk buyer might properly get more favourable terms than one who bought in penny numbers. There was also a strong desire not to penalize the small firm which found it necessary to lower its price in a particular area or to a particular customer in order to meet a price offered by a powerful competitor. The law makers tried to meet these points in a proviso to the general prohibition.1
It was found in practice that the proviso made the section very____________________