The Zombie Robinson ‐​Patman Act Doesn’t Deserve Revival

Ryan Bourne and Rachel ChiuAt the Cato Institute ’sNew Challenges to the Free Economy (from Left and Right) conference, former FTC Commissioner Joshua Wright warned that a  return to the enforcement of the Robinson‐​Patman Act (RPA) of 1936 would be bad news for consumers.The FTC has not brought a  claim under the antiquated law since the 1990s and not vigorously enforced it for much longer. But in recent weeks Commissioner Alvaro Bedoya has echoed FTC Chair Lina Khan in calling for its revival, something that the latter pushed for in her famous paper, Amazon ’s Antitrust Paradox.The problem, per Wright, is that this law ’s return would constitute a regression away from using the consumer welfare standard being the lodestar of antitrust, back to the “big is bad” impulses of the early to mid‐​20th century. It would amount to enforcing rules that “certainly resulted in higher prices,” prioritizing small competitor companies over customers.What is the RPA? On its face, the RPA outlaws price discrimination to different buyers of the same “commodity.” In practice, the law was introduced to hack away at large grocery chain stores that were revolutionizing the retail market in the early 20th century.Lawmakers were concerned that A&P and other chains were hurting the prospects of traditional “mom and pop” stores. The RPA attempted to correct for the economic advantages these chains had in buying commodities directly from wholesalers with bulk disc...

Source: Cato-at-liberty - October 17, 2022 Category: American Health Authors: Ryan Bourne, Rachel Chiu Source Type: blogs