Business Law 4th Edition by David Twomey,Marianne Jennings

Exercise 5

Hines Cosmetic Co. sold beauty preparations nationally to beauty shops at a standard or fixedprice 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.