Great Atlantic and Pacific Tea Company desired to achieve cost savings by switching to the sale of “private label” milk.

A&P asked Borden Company, its longtime supplier of “brand label” milk, to submit a bid to supply certain A&P private label dairy products. A&P was not satisfied with Borden’s bid, however, so it solicited other offers. Bowman Dairy, a competitor of Borden’s, submitted a lower bid. At this point, A&P contacted Borden and asked it to rebid on the private label contract.

A&P included a warning that Borden would have to lower its original bid substantially to undercut Bowman’s bid.

Borden offered a bid that doubled A&P’s potential annual cost savings. A&P accepted Borden’s bid. The FTC then brought an action, charging that A&P had violated the Robinson-Patman Act by knowingly inducing or receiving illegal price discrimination from Borden. Discuss whether the FTC is correct in its allegations.