Two pieces of legislation, enacted in 1914, largely complete the structure of American antitrust law, the first of these in the Clayton act.

The Clayton Act prohibits a number of specific business practices. Section 2 of this act prohibits price discrimination:

It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality … where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition…

Price discrimination arises when different customers are charged different prices for the same product. Note that the Clayton act prohibits price discrimination only when it is likely to be anticompetitive: “where the effect . . . may be . . . to lessen competition. “No guidelines are given for deciding whether or not this condition has been met. In chapter 15, we will discuss the interpretation courts have given to this qualification.

In language that is omitted here, this section of the Clayton act allows price differences if they can be shown to reflect differences in cost. The burden of proof is on the firm accused of discrimination to prove that the price difference in question reflects a cost difference.

Section 3 of the Clayton act prohibits marketing goods “on the condition, agreement, or understanding that the lessee or purchaser . . . shall not use or deal in the goods . . .