The Antitrust Attorney Blog
Author: Steven Cernak
Last week, the FTC voluntarily dismissed its Robinson-Patman Act case against Pepsi that it filed in January. The dismissal and the Commissioner statements accompanying it hinted that the FTC’s determination to revive Robinson-Patman will not be as strong in the Trump Administration.
Short and Recent History of the Case
This blog has detailed the basics of Robinson-Patman and the efforts of the Biden Administration FTC to revive its enforcement several times including here, here, and here. Rumors hinted that the FTC was conducting a large investigation of soft drink sales to major retailers, like Walmart and Costco. So, it was somewhat surprising when the first major Robinson-Patman action by an FTC in decades was the December 2024 case against Southern Glazer’s Wine & Spirits, LLC. The Commission vote to file the complaint was 3-2, with the two Republican Commissioners dissenting because the complaint was likely to fail on cost justification grounds and because the Commission should use its limited resources on actions more clearly anticompetitive.
In the last days of the Biden Administration, the same divided FTC filed this action against Pepsi. Here, the Republican dissents were even more heated. First, the dissents claimed that the Commission leadership forced staff to file a flawed complaint merely to obtain one more headline before Trump appointees took charge. Second, the complaint alleged violations of Robinson-Patman’s Sections 2(d) and (e), which prohibit some discrimination in promotional allowances and do not require proof of harm to competition. According to the dissents, the allegations, if anything, read more like discriminatory price differences under Section 2(a), which does require proof of harm to competition. Because the complaint and the statements discussing the allegations in detail contained so many redactions to hide confidential information of the parties involved, it was difficult to evaluate these disagreements.
Dismissal
Last week, the current Commission — now composed only of three Republican appointees — dismissed the complaint and issued two statements. Those statements echoed the earlier dissents: Of course, the Commission must enforce the Robinson-Patman Act; however, the cases it chooses to bring must have some chance of success and this deeply flawed complaint, brought solely for political reasons, was a poor use of limited resources because it was likely to fail.
Death of Robinson-Patman, Again?
So, does this dismissal mean that the much-discussed Robinson-Patman revival has died in its infancy? Not so fast, my friend. That FTC case against Southern Glazer’s survived a motion to dismiss in April. Also, all the Republican commissioners vowed to enforce Robinson-Patman Act with the right case. Such enforcement would seem consistent with the desire of those same commissioners to bring actions that will help the common man and woman.
Also, as our prior posts have discussed repeatedly, private enforcement of Robinson-Patman has never completely died out; in fact, this firm helped file a complaint that included such claims and also recently survived a motion to dismiss.
But the dismissal does confirm that successfully pleading Robinson-Patman claims can be fact-intensive and difficult, especially given court precedent of the past few decades. That task is even more difficult if the parties involved, like many large manufacturers and the retailers to which they sell, have at least a modest appreciation of the intricacies of the Act. Just a few tweaks of a commodity or pricing or promotional program can make it Robinson-Patman compliant, even if some small retailer does not like the result. So, no matter how the FTC revival of Robinson-Patman enforcement turns out, the Act will continue to affect how commodities are distributed in the U.S.
Image by Igor Ovsyannykov from Pixabay