From today’s New York Times:
Swaths of America have been hollowed out. Some people look at boarded-up shops in small towns and some urban centers and think: They just couldn’t compete. As an antitrust enforcer, I have a different reaction: Maybe we missed something.
For decades, our government stopped big retailers from pressuring suppliers for secret deals that were denied to smaller rivals. This was done under a law called the Robinson-Patman Act. It was, at one point, the most frequently enforced antitrust law at the Federal Trade Commission. But starting in the 1980s, as part of a philosophical shift that embraced the idea that unfettered markets can resolve all ills, officials hit the brakes and eventually stopped enforcing the law altogether.
Consumers know what happened next. From the early 1980s to today, big-box store chains flourished while over 100,000 small retailers closed shop. These closures particularly affected low-income communities and created food deserts — areas where healthy, affordable food is hard to find. Forty years ago, the term “food deserts” didn’t exist. Now it is almost a synonym for rural and inner-city America.
Last month the commission, which I serve on, voted to bring its first Robinson-Patman action in more than two decades. We filed suit against Southern Glazer’s Wine and Spirits, the nation’s largest distributor of alcohol, alleging that the company systematically forced small grocery and liquor stores to pay higher prices than big-box retailers such as Costco and Walmart — differences that cannot be attributed to the lower cost of buying in bulk. (Southern Glazer’s called the commission’s lawsuit “misguided and legally flawed” and said the company’s “pricing and discounting structure does not violate” the Robinson-Patman Act.)
When I was sworn in at the Federal Trade Commission almost three years ago, I took a special interest in Robinson-Patman. People said the law protected the inefficient, but that bore little resemblance to my visits to the corner stores of New York and Washington, D.C., and the independent grocers in my wife’s home state, Louisiana.
Read the complete story here.