Reforming the Robinson-Patman Act to Serve Consumers and Control Powerful Buyers
48 Pages Posted: 3 Mar 2015
Date Written: February 28, 2015
The conventional scholarly response to the Robinson-Patman Act is to urge that it be repealed. Too often R-P enforcement protects small business at the expense of consumers, and frequently it does not even protect small business. In this article I suggest that a better response is to reform the Robinson-Patman Act.
The first step would be to change its goal – to reorient it from a statute designed to protect small business to one designed to promote competition. This is easily done. The second step is to eliminate, in purely equitable actions, the meeting competition and cost justification defenses, since these defenses frequently block enforcement action against powerful buyers, even when their behavior endangers consumers. Though not the focus of this article, the final step would be to make conforming changes in the Act’s technical and jurisdictional requirements and its treatment of promotional discrimination.
These reforms would make it possible to stop – or mitigate the impact of – powerful buyers like Amazon and Wal-Mart when they extract concessions that do pose a serious threat to competition and consumer welfare. While buyer power could be addressed in other ways – courts might break up large buyers if they violate section 2 of the Sherman Act and Congress might subject them to common carrier regulation – neither remedy is likely to provide a desirable general solution. The best approach would be to reform the Robinson-Patman Act.
Keywords: antitrust, competition, buyer power, Amazon, Wal-Mart, Robinson-Patman Act, price discrimination, meeting competition, cost justification, structural relief, common carrier regulation.
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