Rarely Used Price Discrimination Law Garnering More Attention In DC

In the last year, the Federal Trade Commission has twice used a rarely utilized law meant to prohibit price discrimination and protect smaller retailers.

Enacted in 1936, the Robinson-Patman Act amended the Clayton Act by ensuring large chains couldn’t use their buying power to get special treatment and better prices from suppliers. The FTC and the Department of Justice can use the RPA, but private plaintiffs have been the primary force behind any RPA lawsuits. From 2000 to 2023, the government didn’t file any RPA lawsuits.

But late last year, the FTC filed a complaint in federal court in California claiming Southern Glazer’s Wine and Spirits – the largest U.S. distributor of wine and spirts – violated the RPA by giving quantity discounts and other rebates exclusively to large chains, even when not justified by any cost-saving efficiencies. The FTC said the distributor charged small, independent retailers “as much as 12% to 67% more for the same bottles of certain wine and spirits than national and regional chains in the exact same geographic area.”

And in January, the FTC filed an RPA suit in federal court in New York claiming PepsiCo. gave a large retailer preferential pricing and discounts. But the FTC voluntarily dismissed that case in May, saying the lawsuit had been rushed under the Biden administration FTC. It was filed three days before President Trump was inaugurated “in in a nakedly political effort to commit this administration to pursuing little more than a hunch that Pepsi had violated the law,” according to FTC Chairman Andrew Ferguson. “Taxpayer dollars should not be used for legally dubious partisan stunts. The FTC’s outstanding staff will instead get back to work protecting consumers and ensuring a fair and competitive business environment.”