Colorado § 6-2-108 - Secret rebates or refunds prohibited.

§ 6-2-108. Secret rebates or refunds prohibited.

The secret payment or allowance of rebates, refunds, commissions, or unearned discounts, whether in the form of money or otherwise, or secretly extending to certain purchasers special services or privileges not extended to all purchasers upon like terms and conditions, to the injury of a competitor and where such payment or allowance tends to destroy competition, is an unfair trade practice. Any person, firm, partnership, corporation, or association resorting to such unfair trade practice commits a class 2 misdemeanor.

Source: L. 37: p. 1284, § 7. CSA: C. 48, § 302(7). L. 41: p. 823, § 7. L. 49: p. 345, § 7. CRS 53: § 55-2-7. C.R.S. 1963: § 55-2-7. L. 2021: Entire section amended, (SB 21-271), ch. 462, p. 3134, § 59, effective March 1, 2022.

ANNOTATION

Law reviews. For article, "Antitrust and the Lay Lawyer", see 44 Den. L.J. 558 (1967).

Section 6-2-109 inapplicable. Since the reference in § 6-2-109 is "to" § 6-2-108, that section is excluded and § 6-2-109 is inapplicable to secret rebates or refunds. Q-T Mkts., Inc. v. Fleming Cos., 394 F. Supp. 1102 (D. Colo. 1975).

The use of the construction "sections 6-2-103 to 6-2-108" in § 6-2-111 (1) includes both sections whose numbers are given and all intervening sections. Therefore the legislature did intend to create a private right of action for violations of this section. W. Convenience Stores, Inc. v. Suncor Energy U.S.A., Inc., 970 F. Supp. 2d 1162 (D. Colo. 2013) (disagreeing with Q-T Mkts., Inc. v. Fleming Cos., 394 F. Supp. 1102 (D. Colo. 1975), annotated above).

Discount given by fuel supplier to favored customer considered "secret" under this section. While disfavored customers had their own arrangement with the supplier, without knowledge of the undisclosed terms of the favored customer's deal, they had no idea whether the deal they had with the supplier was at all comparable to the deal the supplier had with the favored customer. W. Convenience Stores, Inc. v. Suncor Energy U.S.A., Inc., 970 F. Supp. 2d 1162 (D. Colo. 2013).

The indefinite article "a" in the phrase "injury of a competitor" means any competitor, not merely competitors of the seller giving the secret discount. This section applies, therefore, to both primary-line and secondary-line competition. W. Convenience Stores, Inc. v. Suncor Energy U.S.A., Inc., 970 F. Supp. 2d 1162 (D. Colo. 2013).

No requirement of intent to destroy competition. Liability under this section focuses on the effect on competition of giving a secret discount, regardless of the seller's intent. W. Convenience Stores, Inc. v. Suncor Energy U.S.A., Inc., 970 F. Supp. 2d 1162 (D. Colo. 2013).