With inflation and high consumer prices sure to be major issues in this year’s U.S. Presidential election, recent public statements by FTC Chair Lina Khan and Democratic Commissioner Alvaro Bedoya[1] reveal a curious enthusiasm for reviving enforcement of the Robinson-Patman Act (“RPA”), a mostly dormant statute left largely inactive for more than two decades in large part because many believe that enforcing the statute leads to higher consumer prices. To be sure, Chair Khan’s and Commissioner Bedoya’s statements are consistent with the urgings of Senator Elizabeth Warren and other Congressional progressives,[2] and they harmonize with President Biden’s stated goal of preventing unfair business practices that hinder small and independent businesses.[3] But it’s far from clear that stepped-up RPA enforcement will address the consumer prices issue – and it arguably could make things worse.

Enacted in 1936 to prevent large supermarkets from gaining an unfair advantage over mom-and-pop grocers, the RPA prohibits (1) sellers from contemporaneously charging different prices to competing customers for goods of like grade and quality, where such discrimination is likely to adversely affect competition; (2) buyers or sellers from granting or accepting commissions, fees, or any other compensation that favors one party over another; (3) sellers from offering customers promotional or advertising services, or compensation for advertising or promoting their goods, unless equivalent benefits are available to all resellers; and (4) buyers from knowingly inducing or receiving a discriminatory price that violates the RPA.[4]

Under the Biden Administration, the FTC has opened several investigations into large companies for potential price discrimination,[5] and is now threatening a potential lawsuit against Southern Glazer’s Wine and Spirits, the largest wine and spirits distributor in the U.S. In early 2023, the FTC launched an investigation into whether Southern Glazer’s engaged in discriminatory practices in its sales to retailers, in violation of the RPA. As a part of its investigation, the FTC sought detailed sales data on various alcohol brands sold by Southern Glazer’s and its competitors; pricing and benefits offered to various retailers, including promotions, rebates, and quantity-based discounts; and how Southern Glazer’s allocates its products among different retailers.[6]

After a year-long investigation into Southern Glazer’s,[7] FTC staff recommended that the Commission bring an action against the company under the RPA. Although the FTC has not yet filed its case, sources indicate that the FTC will likely allege that Southern Glazer’s has violated the RPA by providing “secret kickbacks” and favorable pricing to certain large retail customers at the expense of their smaller competitors.[8]

In addition to the FTC’s rediscovered interest in RPA enforcement, private plaintiffs have recently enjoyed some RPA litigation success. On May 20, 2024, the Central District of California upheld a jury verdict for nine plaintiff wholesalers of Clear Eyes eye drops, and entered a permanent injunction against both the manufacturer and the distributor of the product for selling Clear Eyes products at much lower prices to competitors – including large chain stores such as Costco and Sam’s Club – without making similar offers to the plaintiffs. [9] The court’s ruling is significant because it held that even a de minimis loss in sales or customers is sufficient to demonstrate RPA competitive injury.[10]

It is unclear whether this renewed interest in RPA enforcement is a good thing.  For decades, commentators and courts have questioned whether active RPA enforcement is more likely to drive prices down – or up. At its most ideal, RPA enforcement should lead to equalized wholesale prices for both large and small retailers – but limiting discounts to large retailers may mean that consumers will not be able to find prices as low at big box stores as they otherwise might have been.  Moreover, manufacturers have avoided RPA exposure by creating differentiated, functionally similar but legally distinct products that are not of “like grade and quality” and thus can be sold to different competing purchasers at different prices without running afoul of the statute.  And because actual sales at different prices is an element of many RPA claims, some producers and distributors simply opt not to sell their products to smaller retailers.  For this and other reasons, the Antitrust Modernization Commission concluded in 2007 that the RPA had generally reduced discounting.[11]

Nevertheless, the recent FTC investigations, the Commission’s anticipated Southern Glazer’s lawsuit, and the rare plaintiff-friendly ruling in the C.D. California, all arguably signal a return to the spotlight for RPA enforcement. Thus, this once-moribund statute may soon generate more frequent litigation for companies. Moreover, defenses to RPA cases, including cost justifications for pricing discrimination and “functional availability” for discounts and allowances, are sometimes difficult to establish.  Couple these evidentiary challenges with a lower threshold for proof of competitive injury, as suggested by the recent C.D. California case, and the threat of significant RPA litigation may increase substantially.

Whether the recent RPA developments represent sound enforcement policy or a potential political misstep, RPA enforcement is poised for a comeback. To mitigate potential antitrust exposure, companies selling products to resellers should review their pricing policies to ensure RPA compliance.


[1] See Remarks of Commissioner Alvaro M. Bedoya as Prepared for Delivery, Midwest Forum on Fair Markets: What the New Antimonopoly Vision Means for Main Street (Sept. 22, 2022), https://www.ftc.gov/system/files/ftc_gov/pdf/returning_to_fairness_prepared_remarks_commissioner_alvaro_bedoya.pdf; See also, Chris May, US FTC’s Robinson-Patman Act reactivation headed toward enforcement actions ‘in short order,’ Khan says, MLex (Mar. 27, 2022), https://mlexmarketinsight.com/news/insight/us-ftc-s-robinson-patman-act-reactivation-headed-toward-enforcement-actions-in-short-order-khan-says.

[2] See Letter from Senator Elizabeth Warren, et al. to FTC Chair Lina Khan (March 28, 2024), https://www.warren.senate.gov/imo/media/doc/2024.03.28%20Letter%20to%20FTC%20re%20Robinson%20Patman%20Act1.pdf.

[3] See Executive Order on Promoting Competition in the American Economy (Jul 9, 2021) https://www.whitehouse.gov/briefing-room/presidential-actions/2021/07/09/executive-order-on-promoting-competition-in-the-american-economy/.

[4] See 15 U.S.C. § 13(a)-(f).

[5] See Josh Sisco, Pepsi, Coke soda pricing targeted in new federal probe, POLITICO (Jan 9, 2023), https://www.politico.com/news/2023/01/09/pepsi-coke-soda-federal-probe-00077126.

[6] See Josh Sisco, Feds target alcohol pricing in new antitrust probe, POLITICO (Mar. 30, 2023), https://www.politico.com/news/2023/03/30/feds-target-alcohol-pricing-in-new-antitrust-probe-00089676.

[7] Notably, as part of its investigation, the FTC issued multiple civil investigative demands (“CIDs”) in February 2023 to several of Southern Glazer’s largest retail customers, requiring them to produce documents and data relevant to pricing and benefits that Southern Glazer’s had offered.  Total Wine, one of Southern Glazer’s largest retail customers, raised concerns over the broad scope of the CID and filed a Motion to Limit the CID with the FTC, which the denied. When the parties reached an impasse, the FTC filed a petition with a federal court in October 2023, seeking to compel Total Wine to comply with the full scope of the CID.  See FTC v. Retail Services & Systems, Inc. d/b/a Total Wine & More, No. 1:23-mc-00028 (AJT/WEF), (E.D.VA. Oct. 20, 2023), ECF No. 2. Total Wine responded with a Memorandum of Opposition, arguing, among other things, that the FTC’s request was overly broad and would impose an excessive burden. Total Wine & More, No. 1:23-mc-00028 (AJT/WEF), (E.D. VA. Nov. 14, 2023), ECF No. 22. Before the court could issue its ruling, the parties reached a settlement and jointly requested a stay in the proceedings. Total Wine & More, No. 1:23-mc-00028 (AJT/WEF), (E.D.VA. Dec.18, 2023), ECF No. 32. Although the settlement terms remain private, the 120-day stay suggests that Total Wine eventually agreed to produce a broad range of documents. This enforcement action against Total Wine highlights the FTC’s increased focus on Robinson-Patman enforcement.

[8] Josh Sisco, FTC preparing lawsuit over alcohol pricing (Jun. 3, 2024), POLITICO, https://www.politico.com/news/2024/06/03/ftc-lawsuit-southern-glazer-wine-spirits-00161323.

[9] See L.A. Int’l Corp. v. Prestige Brands Holdings, Inc., 2024 WL 2272384 (C.D. Cal. May 20, 2024).

[10] Id.

[11] Antitrust Modernization Commission, Report and Recommendations, 317-318 (April 2007).