Washington, D.C. — In response to news that the Federal Trade Commission (FTC) has filed a lawsuit against Southern Glazer’s Wine and Spirits LLC for engaging in illegal price discrimination against small and independent businesses — the first case brought under the Robinson-Patman Act in nearly 40 years — the American Economic Liberties Project released the following statement.

“Enforcing the Robinson-Patman Act is essential to restoring fair competition and supporting the Main Street businesses that form the backbone of our communities,” said Lee Hepner, Senior Legal Counsel at the American Economic Liberties Project. “By charging small businesses more than big box chain stores for the same products, Southern Glazer’s has made it nearly impossible for small businesses to compete fairly—forcing consumers and communities to pay the price. It’s disappointing to see future chair Andrew Ferguson and and current Republican Commissioner Melissa Holyoak already undermine incoming President Trump’s pro-business agenda by voting not to enforce the law against monopolists.”

The Robinson-Patman Act prohibits price discrimination that harms competition, generally meaning the charging of different prices to different buyers for the same product. It also prohibits buyers from knowingly inducing or receiving discriminatory prices. The Act allows for discounts related to the differential costs of providing the same good or service to different retailers, including so-called “volume discounts.” The Complaint filed by the FTC alleges that Southern gave discounts to big box chain stores unrelated to Southern’s cost of distributing those products, and unrelated to attempts to meet prices offered by competing distributors.

Originally called the Wholesale Grocer’s Protection Act, the Robinson-Patman Act was passed in 1936 to protect smaller grocers from the increasingly dominant chain store A&P. Indeed, the Robinson-Patman Act was, per the Supreme Court in 1960, designed to “to curb and prohibit all devices by which large buyers gained discriminatory preferences over smaller ones by virtue of their greater purchasing power.” Yet this is exactly what we see today.

Although the Robinson-Patman Act was passed by Congress in 1936 and was never repealed, it has not been enforced for nearly 40 years. The Department of Justice and the Federal Trade Commission ceased enforcing the Robinson-Patman Act in the 1970s claiming, without any real evidence, that the law harmed consumers. As a result, small businesses are now paying wholesale prices that are higher than the retail prices offered by power buyers like Amazon and Walmart, in flagrant violation of the law and without recourse, pushing them out of the marketplace and harming small businesses and entrepreneurs.

Learn more about the Robinson-Patman Act through our fact sheet. 

Read our full 2022 report on the Robinson-Patman Act here.

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.