They also carved out another exception.
You're allowed to lower your price in order to meet a competitors price.
But that competitor must be servicing only a subset of the businesses that you serve.
For example, suppose you're selling hot sauce.
You're a national brand hot sauce manufacturer.
But in comes this new hot sauce in the state of Virginia., it's Ron's Hot Sauce.
And you're charging $2.59 for your hot sauce, but Ron's is selling for
$1.99, and it's just killing your business, everybody's buying Ron's sauce.
Well, you are allowed to go into that marketplace and drop your price, and
you don't have to drop it in other parts of the country or the world.
You can do it just in the state of Virginia if that's where Ron's Hot Sauce
is being sold.
Now, some cases, or a particular case that's of interest to the courts now.
Woodman's market versus the Clorox Company.
The background on this is that Clorox stopped supplying Woodman's market with
those larger sized packages that you often see perhaps at places like Sam's Club,
Costco, BJ's, etc.
For those of you who have shopped in those stores,
you know that sometimes you see sizes and packages
that are just much larger then what you're able to get at your local grocery store.
And the allegation in this case is that, Clorox's failure to allow Woodman's Market
to purchase these large size packages, constituted unlawful price discrimination.
Essentially, Woodman's saying, you're selling to Walmart or
your selling to Costco at a lower price than you're selling to us, because
you're offering these big discounts on this large sizes and that is unfair.
So that's an ongoing suit in the marketplace.
My overall impression of these cases is that they're difficult to win.
Now, again, you need to talk to an attorney in your organization about this,
not necessarily take my word exactly about which cases you're going to win and
which cases you're going to lose, because I'm not a legal expert.
But overall, my impression is it's tough to win these cases,
because courts broadly interpret the cost differences provision, and allow
these cost differences to make that B2B price discrimination essentially legal.
Now, what are the big takeaways?
The big takeaways are, don't charge different prices to different customers,
unless it can be justified based on cost differences, or
that price is needed to meet a local competitor's price.