Reform or Repeal of the Robinson-Patman Act—Another View

AuthorEdward Wolfe
Published date01 June 1976
Date01 June 1976
DOIhttp://doi.org/10.1177/0003603X7602100202
Subject MatterArticle
REFORM
OR
REPEAL
OF
THE
ROBINSON·PATMAN
ACT-ANOTHER
VIEW
A Response
In
Part To Messrs.
Kintner.
Hennebel'Cjer
an.d
Fleischaker
by
EDWARD
WOLFE·
It
is the premise of this article
that
the Robinson-Patman
Act, as
it
now exists, is defective
and
has substantial short-
comings as a
matter
of economic
and
legal policy, legislative
drafting, interpretation,
and
administration. The
Act
tends
to be anticompetitive
and
inconsistent with various public
purposes in a number of respects.
It
is
not
the purpose of
this article to argue this premise. The shortcomings of the
Act have been advanced by too many people for too many
years.'
This article will address itself
instead
to the question of
whether the Robinson-Patman Act should be repealed, whether
it
should be modified,
and
certain specific proposals
for
modi-
fication
-.
This will involve some review of the
statutory
pur-
pose, the effects of the Act, other legislative efforts
and
vari-
ous proposals,
but
not the full litany which
has
been developed
by others.
White &Case, New York, New York.
1E.g., Report of The White House Task Force on A.ntitrust
Policy (1968) ("The Neal Report") ;Report of The Task Force on
Productivity and Competition (1969) ("The Stigler Report") ; Sym-
posium on Robinson-Patman
Act-Is
It
in the Public InterestT
1Proceedings of ABA
Antitrust
Law Section, pp. 60 et seq. (1952);
Proceedings, ABA Section of
Antitrust
Law,
--
ABA
Antitrust
L. J.
--
(April
1976). See also Rowe, Price Discrimination Under
the Robinson-Patman
Act
(1962; 1964 Supp.) passim, and authorities
cited therein; Edwards, The Price Discrimination Law (1969).
237
238
THE
ANTITRUST
BULLETIN
PURPOSE
TO
PROTECT
SMALL
BUSINESS
As has often been stated, the Robinson-Patman Act was
the result of the chain store investigation.
It
was
anti
chain
store legislation,"
and
many of its supporters saw it as the
salvation of the small businessman,
and
particularly the
small grocer. As stated by Mr.
Patman
The
day
of the independent merchant is gone unless
something is done
and
done quickly. He cannot possibly
survive
under
that
system. So we have reached the cross
road;
we must either
turn
the food in groceries' business
of this country
...
over to a few corporate chains, or we
have got to
pass
laws
that
will give the people, who built
this country in time of peace
and
who saved it in time of
war, an opportunity to exist
....
8
Supporters, according to Congressman Patman, included
"a
million
and
a
half
independent retail dealers." The Act ex-
pressed
"a
concern to assure the survival of small business." 4.
Rowe states
that
the bill was opposed by every important
segment of business outside the food
industry
with the excep-
tion of the organized retail druggists.t
These purposes continue to be asserted, by some, as a
proper
purpose of the Act.6Others vigorously deny the
2E.g., FTC v. Anheuser-Busch, Inc., 363 U.S. 536, 543-44 and
n.7 (1960) ; Rowe, n.1 supra
at
3-23.
3Hearings Before the House Committee on the
Judiciary
on
Bills to Amend the Clayton Act, 74th Cong., 1st Sess., 5-6 (1935).
4. Edwards, The Price Discrimination Law, 12 (1959).
SRowe,
n.I
supra
at
22.
6E.g., Messrs. Kintner, et al., in
their
article "Reform of the
Robinson-Patman
Act:
A Second Look," appearing in this issue of
The Antitrust Bulletin, citing the Small Business Act of 1953. Note,
however, the purpose of said Act, as set forth by Congress, speaks
only of protecting small-business concerns "insofar as is possible
...
in order to preserve free competitive enterprise." 15 U.S.C. 631 j
Royal Services, Inc. v. Maintenance, Inc., 361
F.2d
86 (5th Cir.
1966); United States v. Riley, 340 F. Supp. 1164, 1168 (W.D. La.
1972) . The language of this section does not
appear
to authorize
activity which may itself be anticompetitive in order to preserve a
small business.
REFORM
OR
REPEAL
OF
THE
ROBINSON-PATMAN
ACT
239
proposition
and
further
deny
that
the Act ought to be con-
cerned with the effects of price discrimination upon buyers.
It
has
been said
that
the decline of smaller firms usually
signals the emergence of socially desirable efficiency in
other
firms
and
the existence of competition among them; in such a
situation the competitive viability of smaller firms can only
be
assured
by
programs
that
keep prices above the levels
that
would be set by the operation of the market. "These
programs
will be
urged
by those who desire to prevent
competition-
usually the smaller firms themselves. Such
programs
are
not
consistent with . . . the protection
and
enhancement of con-
sumer welfare." 7
In
.short, the objective is inconsistent with
antitrust
objectives."
Whether
or not protection of small business, through re-
strictions on price discriminations, should be a
proper
legis-
lative purpose, the intention to protect such business is one
of the commonly accepted objectives of the Act.
However, there seems to be little contravention of the fact
that
small business
has
not been preserved in the 40
year
his-
tory
of the Act,"
At
best, the effectiveness of the
Act
in pro-
tecting small business is
very
much open to debate.t?
71976 Budget Overview
Prepared
By
the Federal
Trade
Com-
mission
Office
of Policy
Planning
and
Evaluation, reported
at
BNA
Antitrust
&Trade Regulation Reporter, No. 692 (Dec. 10, 1974),
E-9.
8As the Federal
Trade
Commission stated in Matter
of
National
Lead Company, 49 F.T.C. 791, 886-87 (1953) :
Acompetitive
industry
is a self-disciplined industry. Com-
petition also supplies the needed dynamics. • • •
[T]he
hard
price competition of the marketplaces . . . may not be gentle-
manly
but
it is usually fair,
particularly
to consumers.
In
such
competition the weak might get
hurt,
but
social security is not
the province of this Commission. The only way to have com-
petition is to compete.
9
"I
do
not
believe enforcement of the Robinson-Patman
Act
has
done much to facilitate the survival of viable, efficient small business
firms. Indeed, in some respects it has been counter-productive." State-
ment of F. M. Scherer, Director,
Bureau
of Economics,
Federal
Trade
Commission, in Hearings, "Recent Efforts to Amend or Repeal the
Robinson-Patman Act," Before the Ad Hoc Subcommittee on Anti-

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