FTC Resuscitates Robinson-Patman Act

In December 2024, the Federal Trade Commission (FTC) filed its first Robinson-Patman Act case in nearly 25 years, Federal Trade Commission v. Southern Glazer’s Wine and Spirits, LLC. The A&O Shearman firm reports that the FTC accused the company of price discrimination by offering large retailers significantly better pricing than smaller, independent retailers.

The case represents a rare use of the RPA and highlights the FTC’s renewed focus on antitrust enforcement under the current administration. The outcome remains uncertain amid an impending administration change.

The Robinson-Patman Act, enacted in 1937, aims to protect smaller retailers by prohibiting price discrimination in the sale of goods to competing buyers. The FTC alleges Southern Glazer’s Wine and Spirits employed high-volume discounts, cumulative discounts, and scan rebates to favor large chains over smaller businesses, violating the RPA’s provisions.

Historically, the RPA has been sparingly enforced due to concerns about its potential to inhibit competition and lead to higher consumer prices. The FTC last pursued an RPA case over 20 years ago involving McCormick and Company’s alleged discriminatory pricing practices.

The FTC’s decision to file the suit has garnered mixed reactions. Democratic commissioners view the action as a step toward leveling the playing field for smaller retailers, while Republican commissioners criticized it as misallocating resources. The incoming administration’s priorities may influence the case’s progression, casting doubt on its future.

The case underscores the FTC’s willingness to revisit dormant antitrust statutes, signaling potential risks for businesses offering differential pricing. Companies in the retail and distribution sectors should evaluate their pricing strategies for compliance with the RPA.

Even if the lawsuit does not proceed, it may inspire private litigation, so lawyers should counsel clients on the evolving regulatory landscape and prepare for potential shifts in enforcement priorities.