Critics Revive 1930s Robinson-Patman Act to Curb Retail Price Discounts

Some policy ideas from the 1930s keep resurfacing despite evidence against them. Efforts by the far left to revive the Robinson-Patman Act and related antitrust theories represent one such case.

The law, passed during the Great Depression, barred wholesalers from charging lower prices to retailers that bought in large volumes. Chains like the now-defunct A&P faced accusations of undercutting small grocers by securing better wholesale deals. Populist politicians labeled these chains monopolists that crushed independents. Lawmakers overlooked how those savings led to lower retail prices for shoppers.

Congress equated efficiency with exploitation and viewed competition as harmful rather than beneficial. The result included higher prices, losses for consumers and no revival for small stores. Courts and agencies later limited the law's scope, letting market forces operate.

Nearly 90 years later, far-left proponents want to bring back the idea of penalizing wholesalers for price differences between large and small buyers. They claim big buyers' "price discrimination" creates unfair markets and hurts Main Street businesses. Government intervention, they say, would restore balance.

Economist Brent Skorup rebuts this in his paper "Stop Making Sense: Reviving the Robinson Patman Act and the Economics of Intermediate Price Discrimination." He argues price differences signal competition and keep costs down, not unfairness.

Today's economy relies on customized and dynamic pricing, from airlines to online sellers that adjust by the minute. Skorup notes that price variation based on volume or logistics reflects basic economics. Walmart's supply chain innovations, Amazon's distribution or Costco's bulk operations benefit shoppers with lower prices. Manufacturers offer discounts to move more goods. Blocking those discounts stifles competition.

This campaign aligns with left-wing efforts to repurpose antitrust as a tool for social goals. Key figures include Lina Khan, former FTC chair under President Joe Biden, and New York City mayoral candidate Zohran Mamdani.

For over 40 years, bipartisan consensus held that antitrust should prioritize consumer welfare: falling prices and rising output signal healthy markets. The current left prefers protecting individual competitors over competition itself.

Skorup warns that reviving the law would give bureaucrats broad power to judge pricing as reasonable or not. Such uncertainty would deter investment and innovation, shifting focus from customers to regulators and lawyers.

Even without federal changes, states mimic the law and lawyers pursue related cases, creating nationwide market risks.

Skorup's report shows price discrimination's harms are mostly hypothetical, while benefits like lower prices and more choice are proven. Free markets require pricing freedom to reward efficiency. Policymakers should reject the Robinson-Patman Act and preserve competition that delivers savings.