The Robinson-Patman Act (RPA), enacted in 1936, has been a focal point of debate among policymakers and economists regarding its potential revival. Proponents, particularly neo-Brandeisians, argue that reviving the RPA is essential for protecting small businesses from larger competitors. They believe that enforcing the RPA could level the playing field and enhance competition in the market. However, a recent analysis by Trelysa Long from the Information Technology and Innovation Foundation (ITIF) challenges this perspective, asserting that the RPA does not effectively address anticompetitive conduct beyond what is already covered by the Sherman Act. Long argues that enforcing the RPA could ultimately harm consumers by raising prices and limiting economic growth [de40d869].
Historically, the RPA has been criticized for protecting inefficient small businesses at the expense of consumer welfare. The act's prohibition of price discrimination has been shown to lead to higher prices for consumers, which contradicts the original intent of fostering competition. Long suggests that the next Congress should consider repealing the RPA to prevent future attempts to revive it, as its enforcement has historically led to negative economic outcomes [de40d869].
Despite these criticisms, there is notable support for the RPA's revival among certain policymakers, including FTC Chair Lina Khan and Commissioner Alvaro Bedoya, who advocate for its enforcement as a means to support small businesses against larger chains. The act was originally influenced by independent retailers seeking protection from larger competitors like A&P, but its relevance in today's market dynamics remains contentious [de40d869].
As private lawsuits under the RPA have surged in recent years, with around 100 new cases filed in federal court, companies are urged to reassess their pricing and marketing strategies to ensure compliance. This rise in litigation reflects a growing interest in the act, but the implications of its revival continue to spark debate about the balance between protecting small businesses and ensuring consumer welfare [8a6a1da1].