Antitrust is having a moment. Last summer, President Joe Biden issued an ambitious executive order with 72 directives and recommendations to his administration to “promote competition in the American economy.” Now, Congress seems poised to enact one or more bipartisan antitrust bills.
How an Old U.S. Antitrust Law Could Foster a Fairer Retail Sector
Targeting abuses of purchasing power helped usher in a golden age of retail in the United States — and it could again.
February 09, 2022
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Summary.
In the 1930s, the U.S. was facing a situation much like the one it’s dealing with today: Major corporations were using their size to demand concessions from suppliers. While their size gave them advantages of scale and efficiency, U.S. lawmakers decided that extorting concessions that smaller companies couldn’t get created an unfair competitive advantage, and passed the Robinson-Patman Act to crack down on the practice. It helped level the playing field, allowing consumers to gain the benefits of operational efficiencies and economies of scale while preventing chain stores from using power and exploitation of suppliers alone to win market share. In the heyday of its enforcement, the U.S. enjoyed a golden age of retail. However, this approach to antitrust fell out of vogue in the 1970s, and Robinson-Patman stopped being enforced. As U.S. lawmakers look for ways to address problems of concentration and monopolization led by a new generation of retail giants — Walmart, Amazon, and others — they should take a hard look at dusting off Robinson-Patman, which is still on the books.