Department of Justice Announces Abandonment of Robinson-Patman Act Enforcement, Adopting Chicago School Critiquetimeline_event

corporate-powerregulatory-captureantitrustchicago-schoolenforcement-abandonmentprice-discrimination
1977-01-01 · 1 min read · Edit on Pyrite

type: timeline_event The Department of Justice released a report declaring it would stop enforcing the Robinson-Patman Act—the 1936 law prohibiting price discrimination that protected small businesses from predatory pricing by large chain stores—based on Chicago School economic arguments that the law 'increased prices' and created 'inefficiencies in distribution.' The DOJ report, produced during the inflationary 1970s when agencies claimed to be seeking tools to hold prices in check, recommended Congress give 'serious consideration' to repealing the Act entirely. Notably, the report contained virtually no empirical evidence that Robinson-Patman enforcement actually raised consumer prices, and the DOJ acknowledged 'they had no systematic way to research that question.' This represented pure ideology masquerading as evidence-based policy. Robert Bork had called the Robinson-Patman Act the 'Typhoid Mary of Antitrust,' epitomizing the Chicago School view that protecting competitors rather than competition harmed 'consumer welfare.' The FTC followed DOJ's lead: Robinson-Patman cases fell from dozens of filings annually in the 1960s to nearly zero by the 1990s. The last FTC enforcement action occurred in 2000. This 20+ year enforcement hiatus allowed massive retailers like Walmart and Amazon to extract discriminatory volume discounts from suppliers—paying substantially lower wholesale prices than small independent retailers for identical goods—systematically destroying the competitive landscape the Robinson-Patman Act was designed to preserve. The law remained on the books but became a dead letter, demonstrating how administrative non-enforcement can effectively repeal Congressional statutes without requiring a single vote.