The Federal Trade Commission’s (FTC) efforts to revive the Depression-era Robinson-Patman Act, which forbids price discrimination, certain types of rebates, and commercial bribery by distributors, will enter a new, more active phase soon. In an interview at the Spring Enforcers Summit co-hosted by the FTC and Department of Justice Antitrust Division on March 27, FTC Chair Lina Kahn promised that her agency was preparing to move forward with Robinson-Patman enforcement actions “in short order.”
As we have previously discussed, Chair Kahn and FTC Commissioner Alvaro Bedoya have both signaled an eagerness to bring Robinson-Patman Act cases as part of the broader Biden administration antitrust agenda. Chair Kahn emphasized at the Enforcers Summit that the FTC wants to make sure that “we’re fully activating . . . the full set of authorities that Congress has given us.”
To illustrate this priority, Chair Kahn once again called out potentially illegal kickbacks between pharmacy benefit managers (PBMs) and major drug manufacturers as an area the Commission was “looking at closely.” Both Congress and the FTC have separately been investigating PBMs for much of the last year, and the Commission issued a policy statement last summer warning that the Commission was examining the industry and the complex web of rebates and fees that may be used to steer doctors and patients to particular drugs, potentially inflating list prices for pharmaceuticals.
However, PBMs are not the only potential target of these coming actions. Earlier this year, major beverage companies were in the crosshairs as the FTC continues its search for a good test case to reinvigorate the statute. Politico first reported in January that large retailers received inquiries from the FTC seeking data and other information about how they purchase and price soft drinks.
While these industries appear to be agency priorities, the Robinson-Patman Act is a broad statute that applies to every seller of goods and can be enforced by private plaintiffs as well the FTC and DOJ. Sellers in every industry will want to monitor these developments to see how these enforcement priorities evolve and are treated by the courts, so they can calibrate their compliance policies accordingly.
If you have questions about how your business could be affected by these enforcement changes, or ways to build an effective compliance program, please do not hesitate to reach out to us.
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