Vintage Statute, Sour Results: The Robinson-Patman Revival in FTC v. Southern Glazer’s
Toward the end of the Biden administration, the Federal Trade Commission (FTC) sought to revive the Robinson-Patman Act of 1936 (RPA), a statute federal enforcers had largely shelved for three decades. The law is also enforceable by private plaintiffs who claim antitrust injury from RPA violations.
Enacted during the Great Depression to shield small grocers from chain-store pricing power, the statute targets price differences between buyers in the sale of goods. Although often labeled “price discrimination,” RPA liability does not track economic price discrimination, which concerns different price-to-marginal-cost ratios across buyers.
For decades, courts, agencies, and scholars recognized the statute’s tensions with modern antitrust policy. The bipartisan Antitrust Modernization Commission concluded in 2007 that the RPA discourages discounting, raises consumer prices, and protects competitors rather than competition.
The U.S. Justice Department (DOJ) stopped bringing RPA cases in 1977. The FTC followed in the 1990s.
The reasons for this bipartisan enforcement hiatus were straightforward. As the Antitrust Modernization Commission explained, the RPA deters the price competition that benefits consumers. Firms facing aggressive RPA enforcement respond rationally: they refuse to offer discounts, adopt rigid uniform pricing, and sometimes stop dealing with small purchasers altogether—the very businesses the statute was meant to protect.
Scholars have been similarly direct. One detailed review of the literature concluded that the RPA’s prohibitions, on net, harm consumers and reduce economic welfare. An empirical study of all private-plaintiff RPA secondary-line decisions (where a seller charged different prices for the same product to different buyers) published between 1990 and 2000 likewise found harm to the competitive process. It reported that secondary-line procedures can weaken competition among suppliers, encourage collusion, and increase monopoly prices.
Government enforcement of the RPA did not fade from neglect. It receded because enforcers learned from experience.