Robinson-Patman Enforcement

Robinson-Patman Risk Returns: Price Discrimination and Tiered Wholesale Pricing

After decades in which the federal government brought no Robinson-Patman cases, the FTC has put the statute back on the enforcement map. In December 2024 the Commission sued Southern Glazer's Wine and Spirits in the Central District of California — its first Robinson-Patman action in decades — alleging that the distributor's discount and rebate practices favored large chains over small independent retailers, and in January 2025 it followed with a suit against PepsiCo in the Southern District of New York. The two cases have since diverged: the reconstituted Commission voted unanimously in May 2025 to dismiss the PepsiCo complaint without prejudice, while the Southern Glazer's case survived a motion to dismiss in April 2025 and, as of mid-2026, is stayed while the parties finalize a reported settlement. For any supplier or distributor selling through tiered wholesale pricing, the lesson is that Robinson-Patman exposure — from the agency and from private treble-damages plaintiffs alike — can no longer be dismissed as historical.

The statutory architecture frames the risk. Section 2(a) makes it unlawful for a seller "to discriminate in price between different purchasers of commodities of like grade and quality" where "the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition" with the party that grants or knowingly receives the benefit of the discrimination, or with customers of either. 15 U.S.C. § 13. A tiered wholesale price list is not unlawful in itself: the statute permits "differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered" — but once discrimination is shown, the burden of proving that justification rests on the seller.

The Commission's theory in a tiered-pricing case runs through Morton Salt. The Act "does not require that the discriminations must in fact have harmed competition, but only that there is a reasonable possibility that they 'may' have such an effect," and in a case involving injury among a seller's customers the Commission "need only prove that a seller had charged one purchaser a higher price for like goods than he had charged one or more of the purchaser's competitors." FTC v. Morton Salt Co., 334 U.S. 37 (1948). Morton Salt also supplies the point most dangerous to volume tiers: discounts that every customer can theoretically earn remain discriminatory if the top brackets are out of reach in practice — "[t]heoretically, these discounts are equally available to all, but functionally they are not" — and evidence that the discounts produced price differentials between competing purchasers "sufficient in amount to influence their resale prices" is by itself adequate to support a finding that competition may be substantially lessened.

Volvo Trucks supplies the countervailing limit. "A hallmark of the requisite competitive injury ... is the diversion of sales or profits from a disfavored purchaser to a favored purchaser," and although "a permissible inference of competitive injury may arise from evidence that a favored competitor received a significant price reduction over a substantial period of time," the inference presupposes buyers in actual competition. Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc., 546 U.S. 164 (2006), decided in a market built on customer-specific competitive bidding for special-order trucks, held that a manufacturer offering its dealers different wholesale prices may not be held liable absent a showing that it "discriminated between dealers contemporaneously competing to resell to the same retail customer." And the Court framed the statute's outer limits in terms every enforcement target will invoke: interbrand competition is the "primary concern of antitrust law," and the Court "would resist interpretation geared more to the protection of existing competitors than to the stimulation of competition."

The defenses do real work, but only if they are built before the demand letter arrives. Beyond cost justification, § 2(b) lets a seller rebut a prima facie case "by showing that his lower price ... was made in good faith to meet an equally low price of a competitor," and the Supreme Court has given that defense practical breadth: the seller must "show the existence of facts which would lead a reasonable and prudent person to believe that the granting of a lower price would in fact meet the equally low price of a competitor," good faith is measured by "the standard of the prudent businessman responding fairly to what he reasonably believes is a situation of competitive necessity," and Congress "intended to allow reasonable pricing responses on an area-specific basis where competitive circumstances warrant them." Falls City Industries, Inc. v. Vanco Beverage, Inc., 460 U.S. 428 (1983). For clients selling through volume tiers, the compliance program follows from the doctrine: map which customers actually compete for the same resale business; test whether the upper tiers are functionally — not just theoretically — attainable by smaller buyers; commission the cost studies before setting the differentials rather than reconstructing them in litigation; and paper every departure from list price as a contemporaneous, verified response to a specific competing offer, so the meeting-competition defense is available when it matters.