Section 133.05. Secret rebates; unfair trade practices.

 

(1)  The secret payment or allowance of rebates, refunds, commissions or unearned discounts, whether in the form of money or otherwise, or the secret extension to certain purchasers of special services or privileges not extended to all purchasers purchasing upon like terms and conditions, such payment, allowance or extension injuring or tending to injure a competitor or destroying or tending to destroy competition, is an unfair trade practice and is prohibited.

(2)  No person may induce, solicit or receive anything of value which is prohibited under sub. (1) .

(3)  Any person knowingly violating this section may be fined not more than $25,000 or imprisoned in the county jail for not more than one year or both.

(4)  As an alternative to the criminal penalty for violation of this section, the department of justice or district attorney may bring an action for a civil forfeiture. In an action for a civil forfeiture under this subsection a person who violates this section may be required to forfeit not more than $25,000.

(5)  This section does not apply to the insurance business.

1979 c. 209 ; 1983 a. 215 . Competitive injury is a required element under this section, but intent to injure is not. OB-GYN Assoc. of Neenah v. Landig, 129 Wis. 2d 362 , 384 N.W.2d 719 (Ct. App. 1986). A violation of sub. (1) occurs when a discount, both secret and unearned, tends to injure or injures competition. "Earned" discount is defined. Jauquet Lumber v. Kolbe & Kolbe Millwork, 164 Wis. 2d 689 , 476 N.W.2d 305 (Ct. App. 1991). This section is not unconstitutionally vague. Knowledge is an element of a violation of sub. (2). Carlson & Erickson v. Lampert Yards, 183 Wis. 2d 220 , 515 N.W.2d 305 (Ct. App. 1994). Civil violations of this section must meet the ordinary civil burden of proof. Carlson & Erickson v. Lampert Yards, 190 Wis. 2d 650 , 529 N.W.2d 905 (1995). "Rebates," "refunds," and "discounts" in sub. (1) mean essentially the same thing, a reduction or credit that is tied to the price of the good or service being purchased by the recipient of the reduction or credit. To be a "discount" a payment or allowance must be a reduction from the price that would be paid if the "discount" were not given. Tele-Port, Inc. v. Ameritech Mobile Communications, Inc. 2001 WI App 261 , 248 Wis. 2d 846 , 637 N.W.2d 782 , 00-2627 . Civil violations of this section must be proved by clear, satisfactory and convincing evidence.