Great Atlantic and Pacific Tea Company desired to achieve cost savings by switching to the sale…

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.