Controlling Buyer and Seller Power: Reviving Enforcement of the Robinson-Patman Act
46 Pages Posted: 7 Dec 2023 Last revised: 31 Mar 2024
Date Written: November 29, 2023
Abstract
The Robinson-Patman Act (“RPA”) is a federal law enacted in 1936. Congress’s goal in drafting this historic legislation was to protect and promote democracy and individual liberty in the United States by supporting the creation and vitality of small and independent businesses, thereby distributing power and opportunity within the U.S. political economy. Congress’s objective was not to protect any particular retailer or producer, or to reduce real competition between businesses in the economy. Congress believed the best way to accomplish these goals was to ensure that powerful retailers and producers of goods such as groceries or other commodities treat every business that depends on them equitably, regardless of size. In general, the RPA requires that all buyers and sellers of commodities, such as groceries, are offered and receive proportionally the same prices and terms of service.
When enforced alongside the other antitrust laws, the RPA helped to sustain the broad prosperity and vibrant, balanced, and competitive retail sector that marked that era, including the spread of modern supermarkets and department stores alongside smaller, independent retailers. But starting in the 1970s, and particularly after President Ronald Reagan took office in 1981, the Department of Justice (“DOJ”) and the Federal Trade Commission (“FTC”), used Chicago School criticisms to formally codify an almost complete suspension of RPA enforcement, alongside a broader reconceptualization of the antitrust laws that resulted in a dramatic reduction in enforcement. With the benefit of hindsight, we can now see that these were grave policy mistakes.
This Article provides a robust defense of Congress’s goals and intentions in enacting the RPA as well as a detailed history of how the Act benefited American society when it was vigorously enforced. It concludes with thoughts on how the RPA can be used to revitalize today’s economy, thus paving the way for broader economic prosperity, greater social justice, and a stronger democracy.
Keywords: antitrust, democracy, fair competition, antimonopoly, Robinson-Patman, Price Discrimination, buyer power, monopsony
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