With or without changes, Robinson-Patman is here to stay

For the first time in 22 years, the Federal Trade Commission seeks public input into whether the Guides for Advertising Allowances and Other Merchandising Payments and Services – a/k/a the “Fred Meyer Guides” – should be updated, retained in their current state, or eliminated.  The Guides are intended to provide an administrative interpretation of sections 2(d) and 2(e) of the Clayton Act, as amended by the Robinson-Patman Act.  While an administrative interpretation is not independently enforceable, businesses often look to the Guides for, well, guidance, when determining the practical application of the Act.

The Fred Meyer Guides consist of 15 sections, broken into three main parts.  The first seven sections define and explain the scope and purpose of the Act – to prohibit sellers from selling comparable goods to different buyers at different prices (as always, some exceptions apply).  The middle three sections interpret the substantive requirements of the Act:

  1. sellers who make payments or furnish services should do so under a plan;
  2. promotional services and allowances should be made available under proportionally equal terms; and
  3. all of these services should be made functionally available to all competing customers.

The final five sections of the Guides address administrative issues, such as contracting with an intermediary, as well as affirmative defenses to violations of the Act.  The FTC is requesting public input as part of its 10-year rotating, systematic review of all of its rules and guides.  Ultimately, the FTC seeks public opinions as to whether the Guides are beneficial to businesses and consumers, and if so, how the Guides should be amended to reflect recent case law and commercial business developments since its last change in 1990 – such as the internet.

You might ask what impact modifying or eliminating the Fred Meyer Guides could have on your business.  Though the Robinson-Patman Act has been widely criticized since its inception and is rarely pursued as a remedy by the FTC or the DOJ, the Act is, presumably, relevant.  Calls to repeal the Act in the 1970s and the 2000s both failed.  Numerous states have analogous or identical provisions to the Act.  And while the FTC and DOJ rarely bring claims under the Act, it is currently pursued by private plaintiffs with potential liability resulting in treble damages.  So with or without changes to administrative direction from the Guides, the Act appears to be here to stay.

If you are interested in reviewing or submitting a comment to the Guides, please click here.