Big business is on a rampage with respect to the Robinson-Patman Act of 1936. They are publishing op-eds in newspapers around the country, lobbying out the kazoo, and having articles placed in newspapers and on social media.

The RPA, as it is sometimes called, was an amendment to the Clayton Anti-Trust Act.

The anti-trust laws were passed starting in 1890 as a push by progressive reformers in the Republican Party. At the forefront of the movement was President Theodore (“Teddy”) Roosevelt, who was known as the “Trust Buster.” Roosevelt appreciated the Republican philosophy to back business as a ladder to success, but. He also believed that business had to be fair, honest, and most importantly, it had to foster competition, not eliminate it. From that concept, the anti-trust laws were born.

The RPA has been misrepresented by those who now want to eliminate it. Big business and government were successful in castrating the RPA in the last number of decades.

The RPA was intended to ban discriminatory discounts in pricing as well as a provision for reimbursement of certain promotional services.

The law was originally intended to address large retail chains that utilized their dominate size in the marketplace to obtain favorable terms from suppliers. This conduct was used to put small enterprises out of business.

The courts, however, were very reluctant to enforce the RPA and made the proof of such a claim so difficult that RPA cases all but disappeared. Big business, the courts, and government officials have essentially succeeded in castrating the RPA over the last several decades. Since 1992, the Federal Trade Commission has issued only one RPA Complaint. Recent Administrations, both the Biden and the Trump, have looked into the use of the RPA to address unfair competition and to give smaller enterprises an opportunity to survive in a world dominated by the heavy hitters.

The courts have made it so difficult to bring or win an RPA case that the law has all but disappeared. Currently, a seller charging competing buyers different prices for the same commodity or discriminating in the provision of allowances must meet several very difficult specific legal tests in order to make out a claim:

1. The Act applies to commodities but not to services, and to purchases, but not to leases.

2. The goods must be of “like grade and quality.”

3. There must be likely injury to competition, and in the case of a private claim, the business must also show actual harm to the business. This is perhaps the most difficult test.

4. Typically, the sales must be “in” interstate commerce, that is, across state lines.

One of the defenses to an RPA claim, which has virtually gutted enforcement, is the “meeting competition defense.” This allows sellers to provide different prices or promotional services to specific buyers if it believes in good faith that it must do so to meet a comparable offer from competing sellers. Businesses may also charge different prices in different geographical markets based upon differing levels of competition in each one.

An RPA claim cannot prevail unless it shows that competition, not merely competitors, have been injured. The price-discriminating party must not only underbid its competitors but also sell it below its own cost.

The defenses are so complex, and litigation so awkward, that the law exists more in theory than in reality.

Should the RPA be repealed, as the big market players would like, or should it be redefined and utilized to eliminate unfair competition which stifles the growth of new and growing companies?

At its simplest, the argument is over whether the RPA increases competition, thus lowering prices to consumers, or whether it stifles competition?

The statute is getting more attention today thanks to the monopolistic power of chains like Walmart and Amazon. They not only suffocate competition, which eventually will lead to higher not lower prices, but they do so in every market and frequently with inferior goods.

The focus should not be on more or less enforcement of the RPA, but rather whether it can be amended in a way to make it more useful in stimulating rather than eliminating competition.

Without question, there is a need to protect small businesses from predatory pricing practices. Just as China and many third world countries deliberately sell below costs in order to drive competitors out of a market, major national and international businesses act as a barracudas in the waters of free competition.

Proving that a particular company with enormous economic power has deliberately acted to drive competitors out of business is an almost impossible task. Rather, the RPA must be focused on the actual effect on competition, as many courts have suggested. However, artificial defenses have been judicially created in order to adulterate the RPA.

This is not in keeping with its original purpose and is inconsistent with the goal of enhancing competition.

Businesses like Walmart, Amazon, and their kin need to face more competition, not less. The fact that they can undercut their smaller competitors, often driving those competitors out of business does not benefit the public. Those who rally against the RPA are, of course, affiliated with the largest corporate mega businesses, and see revival of the RPA as a demonic scheme of the Democratic Party. The RPA is, and should be, promoted by those who see the need to strengthen business competition, those who have invested capital into business enterprises, and to those who truly appreciate the stress of high prices on the average consumer.

The RPA must be reinvigorated with clear guidelines so that it is understood by all and can be efficiently enforced. The RPA can be improved by assuring that predatory pricing is outlawed, and that smaller businesses will have the ability to purchase products, and support for products, in an open market at the same prices as the big players do.

Treating businesses equally and fairly should be the goal of the RPA, rather than protecting a company because it is big or safeguarding an enterprise because it is small. A level playing field, in the long run, will benefit both the corporations and the consumer.

The issue of what to do with the Robinson-Patman Act is not a Democratic or Republican one, notwithstanding the barrels of ink being spent by big business on driving a stake through the heart of the Robinson-Patman Act. One of the restrictions that mega corporations most fear is a requirement that they purchase and sell at prices not designed to drive their smaller competitors out of business.

The American way has always been to guarantee a fair and open marketplace. Those who want to go into business should have an equal opportunity to buy and sell their products, and not to manipulate the market in ways that restrict competition and eventually raise prices.

The Robinson-Patman Act is on life support; that may in fact be a good thing. It should be revitalized in a way which results in more sellers, more buyers, a significantly robust marketplace, and less concentration of power in the hands of a very few.

Clifford A. Rieders is a board-certified trial advocate in Williamsport.