Question

Hines Cosmetic Co. sold beauty preparations nationally to beauty shops at a standard or fixed- price schedule. Some of the shops were also supplied with a free demonstrator and free advertising materials. The shops that were not supplied with them claimed that giving the free services and materials constituted unlawful price discrimination. Hines replied that there was no price discrimination because it charged everyone the same. What it was giving free was merely a promotional campaign that was not intended to discriminate against those who were not given anything free. Was Hines guilty of unlawful price discrimination? Explain

Answer 1

Answer: No,the company is not guilty.

Explanation: In the given case, Hines could not be considered guilty of price discrimination as the price charged from different shops was same. The free samples were distributed for the purpose of campaign and the discretion to which shop they want to provide lies completely with the company.

Price discrimination refers to the practice of charging different prices from different customer which the company have definitely not done.

Hence, Hines could not be charged of guilty of price discrimination.