On December 12, 2024, the Federal Trade Commission (FTC) filed its first Robinson-Patman Act case in more than 20 years, just as the White House is set to change parties and the balance of power on the FTC will swing Republican. The case alleges that a national wine and spirits distributor violated the Act (as well as Section 5 of the Federal Trade Commission Act) by offering discriminatory pricing discounts to larger retailers to the exclusion of smaller "mom and pop" stores. The case follows recent reports of Robinson-Patman investigations by the FTC and serves as a reminder that, in the spirit of the often (mis)quoted Mark Twain, reports of the Robinson-Patman Act's death are greatly exaggerated.
Born out of the Great Depression and the rise of grocery store chains, the 1936 Robinson-Patman Act was designed, according to its extensive legislative history, to protect small businesses. Conventional views about the Act are mixed, and its bipartisan critics have frequently decried it for undermining price competition. While now back in vogue, only two decades ago, in 2007, the Antitrust Modernization Commission wrote, "the Act is fundamentally inconsistent with the antitrust laws and harms consumer welfare," and because "it is not possible to reconcile the provisions of the Act with the purpose of antitrust law," "repeal of the entire Robinson-Patman Act is the best solution."
Since then, the FTC has developed a renewed interest in using Robinson-Patman as a tool to ensure consumer access to groceries and other essential goods, especially in rural and urban locations. One vocal advocate is FTC Commissioner Alvaro Bedoya, who routinely extolls the virtues of Robinson-Patman in public appearances. Along with FTC Chair Lina Khan and Commissioner Rebecca Kelly Slaughter, Commissioner Bedoya voted to authorize the filing of the FTC's first Robinson-Patman case in decades. On the other side of the aisle, Commissioners Andrew Ferguson and Melissa Holyoak voted against the case and generated lengthy dissents – 88 pages in the case of Commissioner Holyoak.
Dissenting Commissioner Ferguson is the Trump administration's nominee for FTC Chair, replacing current Chair Khan, whose term expired in September 2024. But it would be premature to assume the Robinson-Patman Act is entering another period of dormancy. While the future of the FTC's case against the alcohol distribution industry may be dubious, though certainly not doomed, Commissioner Ferguson's dissent suggests his critique has more to do with the merits of one case and the wisdom of devoting the FTC's limited resources to it, rather than an aversion to Robinson-Patman enforcement overall. "The Commission is unlikely to prevail even on its own theory of the Act," Commissioner Ferguson wrote, "and it would be an imprudent use of the Commission's enforcement resources even if it were likely to prevail." With that, he explained: "I conclude that we should bring secondary-line [Robinson-Patman Act] cases only when there is strong evidence that the favored purchasers possess market power."
The upshot is that Robinson-Patman enforcement is seeing a boost in interest by the FTC, seemingly across the political spectrum. And there remains, as always, the very real possibility of private Robinson-Patman actions, which have continued unabated over the decades, albeit with less frequency and perhaps less success than during the Act's heyday in the 1960s. Manufacturers, wholesalers and other supply chain intermediaries would be wise to ensure any pricing variances qualify for at least one of the Robinson-Patman Act's many and varied exceptions. Stay tuned.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
