The Robinson-Patman Act (RPA) is the single most unpopular antitrust law among practitioners and scholars in the field. It has been the target of withering criticism for many years. In 1966, Robert Bork disparaged it as “the Typhoid Mary of Antitrust.” Others, such as the bipartisan Antitrust Modernization Commission in 2007, offered criticisms with more tempered rhetoric but agreed with Bork that the law, by restricting price discrimination and the offering of other special concessions by manufacturers and wholesalers, raised consumer prices and had no sensible rationale. A near consensus has developed among antitrust lawyers and economists that Congress should scale back or repeal the RPA entirely and that the Department of Justice and Federal Trade Commission should continue their multi-decade, tacit policy of nonenforcement of the law.
These criticisms fail to grasp the law’s basic function. Business competition is structured by myriad laws, including property, copyright, consumer protection, and antitrust. To be sure, if low prices are and should be the only purpose of antitrust law and law in general, the RPA appears suspect. But Congress expressly rejected the ideology of low prices at any cost. Congress granted workers the right to unionize and receive fair wages, notwithstanding any adverse effects these rights may have on consumers. In a similar spirit, Congress enacted the RPA to protect suppliers and independent retailers from powerful chains that could use their buying clout to extract special discounts and obtain a critical competitive advantage over smaller rivals. The drafters of the law recognized that not all special pricing concessions are the result of buyer power and therefore allowed firms to show that discriminatory discounts are derived from distributional or manufacturing cost savings. The law is not irrational, let alone “the Typhoid Mary of Antitrust.” The RPA is a sensible and targeted measure against buyer power and in favor of operational efficiency. The law remains relevant in today’s economy because of the growth of large retailers such as Walmart and Amazon and the buyer power of manufacturers in many industries. After extended nonenforcement by the federal government, the Biden administration’s interest in reviving the RPA is necessary and timely.
The original piece is available here: https://plus.lexis.com/api/permalink/7485482d-f05f-45d1-b654-ffb44faaddaf/?context=1530671