The federal government is taking a more aggressive approach to lowering prices and costs for American consumers. On March 5, 2024, President Joseph Biden announced a new Strike Force on Unfair and Illegal Pricing co-chaired by the Department of Justice (DOJ) and Federal Trade Commission (FTC). The strike force is yet another attempt by the federal government to implement the president's July 2021Executive Order on Promoting Competition in the American Economy.
According to the release, the strike force "will strengthen interagency efforts to root out and stop illegal corporate behavior that hikes prices on American families through anti-competitive, unfair, deceptive, or fraudulent business practices." The president has indicated that the strike force will "focus their collaborative efforts on key sectors where corporations may be violating the law and keeping prices high, including prescription drugs and health care, food and grocery, housing, financial services, and more."
An FTC official noted that the strike force is part of its efforts to deliver lower prices to the public and that it is sharing data about enforcement targets with other agencies to enable dynamic allocation of resources. Similarly, a DOJ official stated that when prices are harming consumers, better communication among agencies could enable enforcement of myriad statutes to prevent anti-competitive business conduct.
For example, illegal pricing may implicate the Robinson-Patman Act, which has not been a large focus of the antitrust enforcers for many years. The Robinson-Patman Act is a Great Depression-era antitrust statute that was enacted to help smaller retailers compete against larger retailers that likely have more leverage to achieve price concessions from sellers:
It shall be unlawful for any person engaged in commerce... to discriminate in price between different purchasers of commodities of like grade and quality... where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them... . 15 U.S.C. § 13(a)
Additionally, many state legislatures have codified statutes that parallel the price discrimination provisions of the Robinson-Patman Act.
The focus on reining in consumer pricing could have a particular impact on food and beverage manufacturers and grocers. Last year, we noted that the FTC was allegedly investigating soft drink makers for illegal price discrimination. On March 4, 2024, FTC Chair Lina Khan disclosed that an FTC agency team has been tasked with performing a "deep dive" on the Robinson-Patman Act and was in the process of determining how to use the act's provisions. Additionally, Khan shared that the FTC was continuing to meet with independent grocers and others in the grocery-supply chains to better understand potential illegal price discrimination.
President Biden's announcement of the strike force confirms the government's desire to revive enforcement of the Robinson-Patman Act. Manufacturers and suppliers should consult with experienced counsel for assistance in complying with their obligations in what promises to be an ever-changing regulatory environment.
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