The Federal Trade Commission (FTC) is sending mixed messages about how aggressively it intends to enforce the Robinson-Patman Act (RPA). During the Biden administration, the agency filed its first two RPA complaints in over two decades. Both were filed over the objections of the agency’s Republican commissioners. After President Trump took office, the now Republican-led agency withdrew the complaint against one defendant, but continued to pursue a case against Southern Glazer’s Wine and Spirits, LLC (Southern). Despite this inconsistency from the FTC, private RPA litigation has steadily persisted. This alert will examine several recent cases, discuss the courts’ findings of interstate and antitrust injury, and provide four takeaways for businesses.
The Law
The RPA prohibits price discrimination. That sounds simple in principle, but in practice plaintiffs must clear multiple obstacles and defendants have many defenses in RPA cases.
The RPA applies only to sales, not leases, and to products, not services. These are the first two thresholds that plaintiffs must clear to bring an RPA matter. The RPA also prohibits two types of price discrimination: direct price discrimination and indirect price discrimination.
For direct price discrimination claims, plaintiffs must clear a few more elemental hurdles. First, the goods sold must be of like grade and quality. Second, the resellers of the goods must compete with each other. Third, the sale must be reasonably contemporaneous. Fourth, the price differences between reseller A and reseller B must have an effect of substantially lessening or injuring competition among the resellers or the resellers’ customers.
Indirect price discrimination claims relate to payments, reimbursements, or promotional services. As with direct price discriminations, plaintiffs face a few elemental hurdles. First, the plaintiffs need to show that one reseller received reimbursement, payment, or promotional services. Second, the plaintiffs need to demonstrate that the payment or promotion was not proportionately equal to the payment or promotion the plaintiffs received. Third, the plaintiffs need to show that the disproportional payment or promotion was for goods of like grade and quality.
For both types of discrimination claims, in addition to showing competitive injury (that the plaintiff suffered harm), the plaintiff seeking damages must prove antitrust injury (that consumer welfare has suffered harm). Antitrust injury requires 1) unlawful conduct 2) causing an injury to the plaintiff 3) that flows from whatever makes the conduct unlawful and 4) that is of the type the antitrust laws were intended to prevent. Case law over the years has conflated competitive injury and antitrust injury, making the analysis difficult. One prevailing difference, however, is that discrimination alone can demonstrate competitive injury, but it is not sufficient to show antitrust injury.
Few cases survive the motion-to-dismiss phase, but even when plaintiffs successfully plead RPA cases, the defendants have several defenses, including the good-faith meeting competition defense, the cost-justification defense, the functional discount defense, and the availability defense.
Recent case decisions demonstrate the difficulty in litigating RPA claims and feature discussions about the interstate-commerce prong and the injury prongs of the statute.
FTC v. Southern Glazer’s Wine and Spirits, LLC, 2025 WL 1392166, Slip Op. (C.D. Cal. Apr. 17, 2025)
The Southern Glazer’s case is a classic example of a price discrimination RPA case where the plaintiff’s allegations were sufficiently plausible to survive a motion to dismiss. The FTC sued Southern, one of the largest alcohol distributors in the US, alleging that Southern violated the RPA by selling wine and spirits to small, independent businesses at higher prices than it charged large national and regional chains. More specifically, the FTC alleged that Southern was engaging in secondary-line price discrimination, meaning that Southern offered different prices to different buyers at the same distribution level.
The district court denied Southern’s motion to dismiss. Southern argued that the FTC cannot meet the within-interstate-commerce prong of an RPA claim because state laws require wholesalers like Southern to store the liquor in a warehouse before shipping it to the retailer. The complaint is solely focused on intrastate sales. The court was not persuaded, finding that Southern’s on-demand distribution requires sufficient interstate commerce.
The court also found the FTC pled the basic elements of a RPA violation, including that the preferred large retailers purchased the exact same goods at significantly lower prices and entered contracts with Southern that were materially similar, other than in price, to Southern’s contracts with larger retailers. In other words, there were no different terms of sale.
Antitrust litigators speculated the matter would be withdrawn, as was the fate of the FTC’s second RPA litigation, but the matter is proceeding to discovery. Trial is scheduled for February 2027.
Power Buying Dealers USA Inc. v. Juul Labs Inc., et al., 2025 WL 1582426, Slip Op. (N.D. Ill. June 4, 2025)
The Power Buying Dealers case features a discussion of the competitive-injury prong of the RPA.
Power Buying Dealers (PBD) filed suit alleging that Juul violated the RPA when (1) Juul offered greater allocation of certain e-cigarette products for which rebates were payable to defendant HS Wholesale (HS), a competitor of PBD, and (2) Juul offered HS discounts and rebates that were denied to PBD. PBD alleged that Juul furnished credits to favored distributors including HS, thus enabling such distributors to provide promotional items to the favored distributors’ retail customers.
Juul moved to dismiss the plaintiff’s amended complaint, arguing that the competitive-injury prong of the RPA requires that the plaintiff and the defendant compete in the sale of a product in a relevant geographic market. The plaintiff removed pleadings concerning the relevant geographic market from its amended complaint. As the plaintiff failed to plead such fact, Juul argued the complaint must be dismissed.
The court held that “while competitive injury ‘may be inferred from evidence that a favored competitor received significantly better prices over an extended period of time,’ the Supreme Court has held that ‘[a]bsent actual competition with a favored [competitor], [a plaintiff] cannot establish the competitive injury required under the Act.’ Naturally, then, a plaintiff must show that, ‘as of the time the price differential was imposed, the favored and disfavored purchasers competed at the same functional level, i.e., all wholesalers or all retailers, and within the same geographic market.’” Therefore, as the third amended complaint was void of all allegations of a relevant geographic market, the complaint failed to sufficiently allege that PBD suffered an injury in a geographic market where it competed with Juul. Juul’s motion to dismiss was granted with prejudice.
The plaintiffs recently moved for reconsideration of the court’s ruling on Juul’s motion to dismiss, arguing that no statute or case law requires that a relevant geographic market be alleged in a secondary-line RPA case. PBD also requested leave to amend the case to add the markets back in. Juul maintains that such relevant geographic market must be pleaded as a prerequisite for showing competitive harm. PBD has also argued that defendants were “on notice” of the relevant geographic market, as their original complaint alleged such market to be in Illinois. Juul responded by arguing that PBD provided no reason for the court to rethink its decision. The court has not ruled on PBD’s latest motion.
U.S. Wholesale Outlet & Distribution, Inc., et al. v. Innovation Ventures, LLC and Living Essentials, LLC, 89 F.4th 1126 (9th Cir. 2023)
The Living Essentials matter concerns price and rebate discrimination and demonstrates the complexities in the antitrust-injury prong of RPA matters. Living Essentials manufactures and sells 5-Hour Energy, a popular energy drink. Living Essentials sold this drink to the plaintiffs’ wholesalers as well as to Costco. The plaintiffs allege that Living Essentials offered them less-favorable pricing and gave Costco more-favorable discounts, rebates, and allowances. As a result, the plaintiffs argued that Living Essentials violated the RPA.
In their defense, Living Essentials argued that the difference in pricing terms given to Costco versus the wholesalers reflected that Living Essentials compensated Costco for performing certain functions and assuming specific risks that the wholesalers did not.
The court found that the wholesaler plaintiffs’ claims failed because their evidence did not show antitrust injury.
The court noted that the wholesaler plaintiffs failed to show that the failure to receive the promotion impacted their ability to compete with Costco. The court rejected the plaintiffs’ evidence of Costco’s sales lift because it was not sufficient to show that Costco’s sales lift caused the plaintiffs’ harm. Instead, the plaintiffs needed to show that the discrimination or advertising allowance enabled Costco to lower its prices and divert the plaintiffs’ sales, or that the plaintiffs had to lower their prices to an unprofitable level in response to the low prices. The court also rejected the plaintiffs’ expert testimony. The plaintiffs have appealed to the Ninth Circuit.
Contractor Tool Supply, Inc. v. JPW Industries, Inc., 2025 WL 1295342, Slip Op. (M.D. Fla. May 5, 2025)
Companies selling to large online platforms such as Amazon need to consider their price rebating and promotional allowances policies within the context of the RPA, as shown by the Contractor Tool matter. Contractor Tool Supply (CTS), a distributor of specialized woodworking tools, sued JPW Industries (JPW), a leading manufacturer of multiple woodworking tool brands with a significant market share, for violations of the RPA. CTS conducts sales via its own website, brick-and-mortar stores, and Amazon.com. Amazon was competing with CTS for online sales of the JPW products. JPW agreed to make several exclusive concessions to Amazon, which were designed to give Amazon an advantage in the online market for JPW’s products. The concessions included priority shipping, preferential inventory allocation, priority order fulfillment, waived fees for credit card payments, selective enforcement of its minimum advertised price policy against the plaintiff, and funding from JPW to Amazon to market and sell JPW’s products at a discount, among others. Amazon, after receiving these concessions, placed restrictions on CTS’s sales of JPW’s products on the site.
In ruling on JPW’s motion to dismiss, the court dismissed the price discrimination claims because, as in the 5-Hour Energy case, CTS failed to demonstrate antitrust injury. CTS’s allegation that it lost money was not sufficiently tied to JPW’s Amazon pricing. The court did, however, deny the motion to dismiss regarding CTS’s discriminatory rebating claims. There, the court held that the plaintiff plausibly alleged that the defendant paid for promotional allowances to Amazon without offering similar allowances to the plaintiff in violation of the RPA. JPW answered the complaint in June, and the case proceeds.
Takeaways
The cases above provide important takeaways for businesses. For companies that offer promotional rebates or differentiated pricing to their vendors and distributors:
- Ensure the contracts for the vendors contain materially different contract terms that provide a basis for pricing differences.
- Confirm and document that vendors that receive a discount perform a function that is meaningfully different from those that do not. Such differences could include preferential placement and marketing of the seller’s product.
- Remember that the RPA applies across different selling platforms. Offering discounts to online vendors but not to brick-and-mortar retailers is not necessarily a defense against price discrimination.
For companies seeking to redress discriminatory pricing:
- Prior to filing the complaint, invest in demonstrating antitrust injury by, for example, hiring an economist to flesh out plausible connections. Mere allegations of a pricing differential are not sufficient, and courts are keen to dismiss complaints without allegations that directly connect the pricing differential to the end consumer’s harm.
McCarter’s Antitrust group will continue to monitor developments and cases involving RPA.