Washington, D.C. — In response to the release of the results from a 6(b) study from the Federal Trade Commission on the supply chain practices of large grocery retailers and food producers, examining whether those firms are charging different prices to small firms compared to big ones, or giving preferential access to supplies in shortage to big customers versus small ones, the American Economic Liberties Project released the following statement.

“The FTC’s new study plainly exposes how the power buyers of today weaponize their size to disadvantage rivals, harm suppliers, and jack up prices in times of crises.” said Nidhi Hegde, Interim Executive Director of the American Economic Liberties Project. “While working families suffer from higher costs and smaller businesses struggle to stock their shelves, big corporations are enjoying sky high profits by capitalizing on the economic impact of the pandemic. We urge enforcers to crack down on this abuse of monopoly power and revitalize laws like the Robinson Patman Act to ensure that anticompetitive price discrimination tactics are prohibited.”

The Robinson-Patman Act prohibits price discrimination, which is the charging of different prices to different buyers for the same product. It also prohibits buyers from knowingly inducing or receiving discriminatory prices. It was passed in 1936 to allow smaller grocers to compete on fair terms with dominant chain stores like A&P that were able to pressure supplier to give them lower prices than their competitors.

The Department of Justice and the Federal Trade Commission ceased enforcing the Robinson-Patman Act in the late 1970s claiming, without any empirical evidence, that the law harmed consumers. As a result, small businesses today find themselves often paying wholesale prices that are higher than the retail prices offered by power buyers like Amazon and Walmart. These flagrant violations of the law push smaller businesses out of the marketplace, and eviscerating the mom-and-pop stores that are cornerstones of Main Street America. In a unanimous vote in June 2023, the Federal Trade Commission advanced a policy statement to resurrect the use of the Robinson-Patman Act to take on the cartel that controls insulin.

Read “Price Discrimination and Power Buyers: Why Giant Retailers Dominate the Economy and How to Stop It” 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.