s need to be aware of the FTC’s renewed enforcement focus on the RPA—particularly those involved in the chain of producing consumer-facing goods, which appear to be top of mind at the FTC.Guidance for BusinessesIn light of the FTC’s renewed focus on the RPA, companies should be aware of potential liability for price discrimination and ensure they have appropriate compliance programs in place to mitigate risk of potential violations. If the RPA is not adequately addressed by existing compliance programs, companies should strive to update these policies as soon as possible. To the extent possible, companies should work closely with antitrust counsel to ensure their pricing practices, including discount programs and rebates, as well as promotional allowances and other services, comply with the antitrust laws, including the RPA.References1 Vasant, Khushita, Mlex, “Comment: Robinson-Patman Act not ‘clearest’ law, but US FTC’s Bedoya seeks enforcement revival (27 December 2022) available .2 15 U.S.C. § 13(a).3 SeeBrooke Group, Ltd. v. Brown & Williamson Tobacco Co., 509 U.S. 209 (1993).4 Sullivan, Hovenkamp, Shelanski and Leslie, Antitrust Law, Policy and Procedure, Chapter 8: Secondary-Line Differential Pricing and the Robinson-Patman Act (7th ed. 2013).5 See Federal Trade Commission, “Price Discrimination: Robinson-Patman Violations” available here. These are two of a number of defenses to the RPA. Other defenses include functional availability and changed conditions.6 15 U.S.C. § 13(c).7 Id. at § 13(d).8 Id. at § 13(e).9 Id. at § 13(f).10 Zakrzewski, Cat, Washington Post, “After months of deadlock, Lina Khan is unleashed” (8 June 2022) available here.11 15 U.S.C. § 13a (“Any person violating any of the provisions of this section shall, upon conviction thereof, be find not more than $5,000 or imprisoned not more than one year, or both.”).12 D. Daniel Sokol, Reinvigorating Criminal Antitrust?, 60 Wm. & Mary L. Rev. 1545, 1569 (2019).13 Vasant, Khushita, Mlex, “Comment: Robinson-Patman Ac

In the unanimous decision, the Seventh Circuit agreed with Clorox that its refusal to sell bulk-sized packages of certain products to some retailers, like Woodman’s, when it sold these bulk-sized items to “big box” retailers, like Costco and Sam’s Club, was not a violation of the Robinson-Patman Act’s (Act) prohibition on the disproportionate provision of promotional services. 15 U.S.C. § 13(e). The court held that size alone is not enough to constitute a promotional “service or facility” for purposes of subsection 13(e), although it did leave open the possibility that, under different facts, package size or design could constitute a “service or facility” when combined with other promotional content.

FTC’s investigations, disfavored resellers can—and will—tap the Robinson-Patman Act through private actions and likely class actions. In light of the amplified focus on the Robinson-Patman Act, manufacturers and other businesses—across all industries—must ensure that their pricing, marketing allowances, rebate schemes, discount programs, and other related pricing practices are properly designed to comply with the Robinson-Patman Act. With proper counsel and an understanding of the scope of the Robinson-Patman Act and its recognized defenses and business justifications, manufactures can establish prices and offer discounts and rebates while mitigating risk of Robinson-Patman Act exposure. 1 For an article discussing the June 2022 Policy Statement, please see Christopher S. Finnerty, et al., The FTC’s “New” Tool: Greater Enforcement of the Robinson-Patman Act, K&L GATES (July 13, 2022), https://www.klgates.com/The-FTCs-New-Tool-Greater-Enforcement-of-the-Robinson-Patman-Act-7-13-2022.2 15 U.S.C. § 13(a). 3 The Act was enacted to “curb and prohibit all devices by which large buyers gained discriminatory preferences over smaller ones by virtue of their greater purchasing power.” F.T.C. v. Henry Broch & Co., 363 U.S. 166, 168 (1960).4 See 15 U.S.C. § 13(d) (“It shall be unlawful for any person engaged in commerce to pay . . . to or for the benefit of a customer . . . as compensation or in consideration for any services or facilities furnished by or through such customer in connection with the processing, handling, sale, or offering for sale of any products or commodities manufactured, sold, or offered for sale by such person, unless such payment or consideration is available on proportionally equal terms to all other customers competing in the distribution of such products or commodities.” (emphasis added)); 15 U.S.C. § 13(e) (“It shall be unlawful for any person to discriminate in favor of one purchaser against another purchaser or purchasers of a commodity bought for resale, with or w

Armed with a basic understanding of its principles and defenses sounding in legitimate business purposes, manufacturers can establish prices and services while mitigating Robinson-Patman Act risk.1 FTC, “Policy Statement of the Federal Trade Commission on Rebates and Fees in Exchange for Excluding Lower Cost Drug Products,” June 16, 2022, available at: https://www.ftc.gov/legal-library/browse/policy-statement-federal-trade-commission-rebates-fees-exchange-excluding-lower-cost-drug-products (hereinafter, FTC Policy Statement).2 FTC Policy Statement, at 4.3 15 U.S.C. § 13(a).4 The Act was enacted to “curb and prohibit all devices by which large buyers gained discriminatory preferences over smaller ones by virtue of their greater purchasing power.”

ts are actually attributable to the distributors’ performance of sales and service activities. Manufacturers must be prepared to do the math—and show their work—for the justifications they are making with respect to pricing discounts.This marks another plaintiff-friendly decision with respect to the RPA. Manufacturers across the country may begin to re-evaluate their risk in engaging in volume-based pricing strategies given the momentum building for these types of claims.1 74 F.4th 960 (9th Cir. 2023). 2 For additional background regarding U.S. Wholesale’s claims against Living Essentials, please see K&L Gates’ prior article on the topic: https://www.klgates.com/Disfavored-Retailers-Turning-Up-the-Volume-on-Robinson-Patman-Litigation-02-14-2018. 3 The RPA prohibits sellers of goods from discriminating among competing buyers in certain circumstances. Section 2(a) of the RPA bars a seller from discriminating in price between competing purchasers of commodities of like grade and quality. 15 U.S.C. §13(a). Section 2(d) of the RPA makes it unlawful for a manufacturer to discriminate by making payments to one purchaser in connection with the sales of products unless that same payment is available “on proportionally equal terms” to “all other customers competing in the distribution of such products.” 15 U.S.C. §13(d).4 U.S. Wholesale Outlet & Distr., 74 F.4th at 968.5 Id.6 Id. at 973.7 Id. at 973–75.8 Id. at 977.9 Id.10 Id.11 Id. at 967.12 Id.13 Id.

Without recognized justifications or defenses in a manufacturer’s arsenal, it is likely left to challenge the prima facie elements of a reseller’s claims. While it certainly can be done, Marjam v. Firestone suggests that this may be a tougher hill to climb.Reprinted with permission from Law 360.Notes: [1] https://www.law360.com/articles/1013964/disfavored-retailers-turn-up-volume-on-robinson-patman. [2] 15 U.S.C. § 13(a). [3] See Volvo Trucks N. Am., Inc. v. Reeder-Simco GMC, Inc. , 546 U.S. 164, 176–77 (2006). [4] See id. [5] 15 U.S.C. § 13(a). [6] Marjam Supply Co. v. Firestone Bldg. Prods. Co. LLC, C.A. No. 2:11-cv-07119 (D.N.J. 2011). [7] First Amended Complaint, ¶ 86 (ECF No. 92).

Plaintiffs claimed that the price differentials harmed their ability to compete, causing them to lose customers to the favored purchasers. After years of discovery, the district court granted summary judgment and dismissed plaintiffs’ Robinson-Patman Act claims (15 U.S.C. sections 13(a), (d), and (f), 15 and 26) for failure to prove competitive or antitrust injury. The court of appeals affirmed.

The court of appeals also affirmed dismissal of plaintiff’s Sherman Act section 1 claim, which reframed essentially the same facts as a conspiracy.Automatic CanteenRobinson-Patman Act (15 U.S.C. section 13) “secondary line” law imposes liability on buyers who receive discounts for large volume purchases, and on the sellers who provide such discounts, unless one of the affirmative defenses permitted by the Act applies. As the Supreme Court recently stated, a central legislative purpose of this Great Depression era legislation enacted in 1936 was to attack “the perceived harm to competition by powerful buyers” that have “the clout to obtain lower prices for goods than small buyers could command.”

Much maligned by antitrust practitioners and economists, the Robinson-Patman Act generally prohibits sellers from setting different prices for competing purchasers of like commodities, except where justified based on bona fide differences in volume or cost of sale, or to meet an equally low price of a competitor. 15 U.S.C. § 13(a)-(b). Although the Robinson-Patman Act primarily focuses on sellers, Section (f) of the Act also makes it illegal for purchasers of commodities to “knowingly . . . receive a discrimination in price which is prohibited by” the Act.

also claimed Reynolds charged different prices to different retail dealers and refused to give Cigarettes Cheaper! its lowest level of discounts, in violation of the Robinson-Patman Act, 15 U.S.C. §13. Reynolds defended against this latter charge by claiming that these discounts were available to Cigarettes Cheaper! if the company would stop its gray market sales.