ICLE Statement on the FTC’s Revival of Discredited Interpretation of Long-Dormant Robinson-Patman Act
PORTLAND, Ore. (Dec. 12, 2024) – The International Center for Law & Economics (ICLE) offers the following statement on the Federal Trade Commission’s (FTC) just-announced proceedings against Southern Glazer’s Wine and Spirits, alleging the company violated the Robinson-Patman Act of 1936 (RPA) by offering discounts and rebates to large national and regional chains that it did not extend to small and independent businesses.
The proceeding marks the commission’s first RPA case in more than a quarter-century, and revives a long-discredited interpretation of the statute that it establishes a per se ban on price discrimination, rather than just those discriminatory practices that harm competition.
The following quote can be attributed to ICLE President Geoffrey A. Manne:
There’s a distinct irony that, having just successfully challenged the Kroger/Albertsons merger by arguing that supermarkets compete only with each other—and not with supercenters, club stores, Instacart, or e-commerce—the FTC in this case effectively argues that chain stores do not actually compete with each other, and that only the competition provided by small retailers can discipline pricing. It’s a particularly strange argument to make in defense of the Robinson-Patman Act, whose original purpose was to remove price competition.
The following quote can be attributed to ICLE Chief Economist Brian Albrecht:
The FTC will need to show the price discrimination alleged in this case isn’t justified by cost differences in serving different customers. If distributors are forced to ignore genuine cost differences just to maintain an artificial price parity, the result could be harms to consumers. But most concerning about the initial complaint is the lack of concrete evidence of harm arising from specific price differences. Even when there aren’t cost differences, the economic evidence is clear that price discrimination can actually raise consumer welfare.
For more on the Robinson-Patman Act, see Brian’s October 2022 piece in National Review or Geoff’s January 2022 testimony to the U.S. House Judiciary Subcommittee on Antitrust, Commercial, and Administrative Law.
To schedule an interview with Geoff or Brian about the topic, contact ICLE Media and Communications Manager Elizabeth Lincicome at (919) 744-8087 or [email protected].