Reforming the Robinson-Patman Act to Serve Consumers and Control Powerful Buyers

Abstract

The Robinson-Patman Act suffers from two major flaws. First, its fundamental goal is not to promote competition and benefit consumers but to protect small business. Second, it frequently fails to protect either consumers or small business. In particular, the Act’s defenses for meeting competition and cost justification ordinarily allow large buyers to extract discriminatory concessions from suppliers, even when the concessions harm both small competitors and consumers. To eliminate these flaws, three changes are needed. First, the Act’s injury language should be amended: a plaintiff should have to show harm to competition, not just injury to a competitor. Second, the Act’s meeting competition and cost justification defenses should be curtailed. Finally, though not the focus of this article, conforming changes should be made in the Act’s treatment of promotional discrimination. These reforms would create a statute that is much more likely to serve consumers and control powerful buyers. Indeed, if a large buyer such as Amazon or Wal-Mart induces a concession that threatens to harm competition, a reformed Robinson-Patman Act would provide the most desirable remedy. As a general rule, neither structural relief nor common carrier regulation is likely to be preferable. For this reason, the Robinson-Patman Act should be reformed, not repealed.