Federal Trade Commission v. Cement Institute

Background

The Federal Trade Commission brought charges against the Cement Institute — an industry trade association — 74 cement companies, and 21 associated individuals. The FTC said these firms used a multiple basing-point delivered-price system to keep delivered prices identical across localities and to discriminate between buyers, and it issued a cease-and-desist order after a multi‑year hearing with thousands of pages of testimony and exhibits. The Circuit Court of Appeals vacated the order, and the Supreme Court reviewed the case.

Reasoning

The core question was whether cement producers’ coordinated use of the basing-point delivered-price system was an unfair method of competition under the FTC Act and whether it violated the Clayton Act’s ban on price discrimination. The Court relied on the Commission’s extensive findings of concerted practices — including coordinated freight factors, punishments of price-cutters, and industry pledges — and on prior decisions dealing with basing-point pricing. The Court concluded the coordinated basing-point system eliminated price competition and produced unlawful discriminations, so the FTC’s cease-and-desist order was valid and should be enforced.

Real world impact

The decision requires cement firms to stop acting together to maintain uniform delivered prices; trade association coordination that enforces basing-point pricing can be barred. The ruling is aimed at collective schemes, not isolated sales by a single company, and the Court emphasized the order targets concerted, not individual, conduct. Enforcement may open room for real price competition and affect public procurement and local buyers.

Dissents or concurrances

A dissenting Justice argued the evidence did not support a finding of an industry‑wide combination and warned the Court left unresolved whether independent freight absorption by a single seller in honest competition is lawful.