Discuss whether the ftc is correct in its allegations

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Reference no: EM131390684

Great Atlantic and Pacific Tea Company desired to achieve cost savings by switching to the sale of ‘‘private label'' milk. A&P asked Borden Company, its long-time supplier of ‘‘brand label'' milk, to submit a bid to supply certain A&P private label dairy products. A&P was not satisfied with Borden's bid, however, so it solicited other offers. Bowman Dairy, a competitor of Borden's, submitted a lower bid.

At this point, A&P contacted Borden and asked it to rebid on the private label contract. A&P included a warning that Borden would have to lower its original bid substantially in order to undercut Bowman's bid. Borden offered a bid that doubled A&P's potential annual cost savings. A&P accepted Borden's bid.

The Federal Trade Commission (FTC) then brought this action, charging that A&P had violated the Robinson-Patman Act by knowingly inducing or receiving illegal price discrimination from Borden. Discuss whether the FTC is correct in its allegations.

Reference no: EM131390684

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