The Federal Trade Commission issued a cease and desist order under section two of the Clayton Act against petitioner, a manufacturer and distributer of plumbing supplies and equipment having 5.75 per cent of the national market. The gravamen of the FTC prosecution was price discrimination in the allowing by petitioner of a ten per cent price discount on "truck load" orders of its products. Petitioner requested the FTC to stay the cease and desist order until the FTC had investigated and instituted enforcement proceedings against the entire plumbing fixture industry. Petitioner alleged that enforcement of the order would put it at a competitive disadvantage and cause it loss of business, because other firms in the industry, having larger shares of the national market, were giving discounts ranging from thirteen to eighteen per cent on similar customer orders. The FTC denied the request to hold the order in abeyance, and appeal was taken to the Seventh Circuit Court of Appeals, which set aside the FTC's refusal to stay the cease and desist order and remanded the case for enforcement proceedings against the entire industry. Held: It is a "patent abuse of discretion" for the Federal Trade Commission to proceed solely against a single manufacturer having 5.75 per cent of the national market and engaging in discriminatory pricing practices, without a similar enforcement proceeding against manufacturers in the same industry having a larger share of the national market and engaging in equal or greater discriminatory pricing practices. Universal-Rundle Corp. v. FTC, 352 F.2d 831 (7th Cir. 1965).
FTC Proceeding Without Industrywide Enforcement: Patent Abuse of Discretion,
Wash. L. & Rev.
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