FTC Brings First Robinson-Patman Act Case in More Than Two Decades

By: Ryan Quillian, Ross Demain, Terrell McSweeny & Alezeh Rauf  (Covington Competition)

In this article, the team at Covington & Burling examines the U.S. Federal Trade Commission’s (FTC) recent action against Southern Glazer’s Wine and Spirits, LLC, marking the first Robinson-Patman Act (RPA) enforcement case in over two decades.

On December 12, 2024, the U.S. Federal Trade Commission (FTC) authorized its staff to file a complaint against alcohol distributor Southern Glazer’s Wine and Spirits, LLC (“Southern Glazer’s”). The complaint alleges that the company engaged in price discrimination—charging higher prices to independent businesses and lower prices to large national and regional chains—in violation of Section 2(a) of the Robinson-Patman Act (“RPA”). The Commission voted 3-2 along party lines to file the lawsuit in federal district court, with the two Republican-appointed Commissioners—Commissioners Melissa Holyoak and Andrew Ferguson—issuing strongly worded dissenting statements (see here and here, respectively). Prior to this case, the federal antitrust agencies—the FTC and the Antitrust Division of the U.S. Department of Justice (the “Antitrust Division”)—had not brought an enforcement action under the RPA in more than two decades.

According to the Supreme Court in Volvo Trucks N. Am., Inc. v. Reeder-Simco GMC, Inc., 546 U.S. 164, 175 (2006), Congress enacted the RPA in 1936 to “target the perceived harm to competition occasioned by powerful buyers” in response to the rise of large chain stores. At the time, Congress was concerned that large firms could negotiate lower prices from manufacturers or suppliers than smaller businesses.

The RPA encompasses multiple categories of conduct, with Section 2(a) being the most relevant in this case. This provision makes it unlawful for any person “engaged in commerce” to “discriminate in price between purchasers of commodities of like grade and quality” where the effect of such discrimination may be to lessen competition, tend to create a monopoly, or injure competition with any person who receives the benefit of such discrimination or their customers. Several potential legal defenses exist under this provision, including that the price difference was justified by costs incurred by the seller, that the lower price was available to all customers, that the price differential did not cause the higher-paying customer to lose sales, and that the price difference was the result of meeting a competitor’s price.

The RPA has faced significant criticism—including from the federal agencies themselves—due to concerns that its enforcement could lead to higher prices for consumers. In 1977, the Antitrust Division announced that it would stop enforcing the RPA in part because the law potentially punishes legitimate volume discounts, which risks discouraging upstream price competition and may ultimately raise prices for end consumers. Following that announcement, the federal antitrust agencies pursued very few RPA-related enforcement actions, effectively ceasing enforcement of the RPA after 2000—until now…

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