Have you ever wondered why your local small businesses often seem to have higher prices than those of big-box stores or online retailers? The Institute for Local Self-Reliance believes they have found the answer.
Just in time for the holiday shopping season when most retailers do most of their annual sales, the ILSR has issued “The Robinson-Patman Act: A Critical Tool for Fair Competition”, a report that provides a history of the Act and asks that the Federal Trade Commission enforce it to stop illegal pricing discrimination.
In 1936, Congress enacted the Robinson-Patman Act (RPA) to safeguard the ability of Main Street businesses to compete. It requires suppliers to offer the same pricing and terms to all retail buyers, including local small businesses. Discounts are allowed only to the extent that they reflect actual differences in cost (for example, when supplying a large volume).
From the 1930s to the 1970s, a highly diverse and competitive retail sector emerged, offering consumers affordable goods, enabling small retailers to transition into the middle class through ownership, and providing jobs to the local community.
The FTC stopped enforcing the Act in the 1980s as part of a broader rollback of antitrust policy, narrowing the interpretation of antitrust law to focus primarily on “efficiency” rather than fairness.
The suspension of enforcement saw independent retailer market share plummet, falling from 53% of retail sales in 1982 to just 22% in 2017, impacting small grocery stores, pharmacies, hardware stores, beauty supply stores, and other small retailers. At the same time, retail giants like Amazon and Walmart concentrated their economic power by extracting discounts for themselves while forcing independent retailers to pay more.
Locally, the fight back against large retailer market dominance that would undercut small retailers was seen when East New York successfully rejected Walmart establishing a foothold in New York City under the leadership of former Assembly and Council member Charles Barron.
ILSR calls for reviving the enforcement of the Robinson-Patman Act, stating that it would lead to more competition on pricing. In addition, enforcement would help lower grocery prices for consumers, compel big retailers to compete based on better service and more efficient operations instead of knocking small businesses out of the market via special deals from suppliers, help rural and low-income neighborhoods by enabling independent and locally owned businesses to compete, and create new opportunities for small food producers.
During a recent briefing, ILSR co-hosted a lively virtual briefing alongside 15 Small Business Rising (SBR) coalition partners to expose how large corporations are bullying suppliers into providing illegal pricing deals. More than 100 small businesses from across the country joined the live virtual briefing — featuring leading antimonopoly and small-business advocates — to galvanize small businesses to fight back and assert their rights, rather than accept price discrimination as the cost of doing business.
The briefing, How Big Retailers Get Illegal Pricing Deals and How to Fight Back, builds off years of ILSR and SBR advocacy, calling on federal and state policymakers and enforcers to revive a critical law designed to protect fair competition: the Robinson-Patman Act (RPA). The law requires suppliers to offer the same pricing and terms to all retail buyers. This collective advocacy led to landmark enforcement actions by the Federal Trade Commission (FTC) under the leadership of former Chair Lina Khan, during the Biden administration. Unfortunately, some of these efforts have been slowed, or outright abandoned, under the current administration.
Briefing Cohosts included American Booksellers Association, American Independent Business Alliance, American Specialty Toy Retailing Association, Cambridge Local First, Independent Natural Food Retailers Association, Independent Shopkeepers Association, Institute for Local Self-Reliance, Local Business Institute, Local First Arizona, Local Return, Louisville Independent Business Alliance, Lowcountry Local First, National Community Pharmacists Association, National Grocers Association, Small Business Majority, and Spokane Independent Metro Business Alliance.
Price discrimination is illegal and a national issue.
Stacy Mitchell, ILSR’s co-executive director, said price discrimination puts independent retailers at a significant disadvantage. She explained that a powerful retail chain may coerce a supplier into providing better prices than their competitors because the large retailer may be the suppliers biggest customer. When the supplier lowers its prices to the big chain it loses revenue and makes up for the loses by raising prices to the independent retailers who in turn pass those higher prices on to their customers. Meanwhile, the large chain retailers grow more powerful and gain more market share.
“There is a growing re recognition that it was a major mistake to stop enforcing this law,” said Mitchell. “We could look across the grocery industry, the banking industry, the pharmacy industry, and the depletion of independent businesses within those spaces is critical for us to fight for.”
Katie Van Dyke, an advocate and former federal antitrust enforcer, outlined strategies available to identify price-determining discrimination and the different strategies available to address it.
Van Dyke said, “The easiest way to identify price discrimination is when a lot of you see a product that you sell being offered at the retail level for prices that are lower than what you pay wholesale.” Promotional allowances like coupons, special displays, and free transportation of a product that are offered to the large retail chain but not the small independent retailer are also forms of price discrimination.”
Instead of accepting price discrimination as just the cost of doing business, Van Dyke said, “There are a multitude of ways to fight back and assert your rights and enforce the law on your own or going through your congressmen, your state legislatures, through your government enforcement agencies, or take direct action by filing a lawsuit.”
Briana Walker, staff counsel for Senator Corey Booker on the U.S. Senate Judiciary Committee, spoke about soon-to-be-introduced legislation that would provide greater resources for state attorneys general to conduct price discrimination investigations in the states.
“It’s time to turn our state attorneys general to do the work our federal antitrust enforcers have failed to do,” said Walker.
Senator Booker has drafted the Fair Competition for Small Business Act of 2025. The legislation would enable state AGs to seek monetary damages on behalf of their constituents, including small businesses, for Robinson-Patman Act violations.
“By empowering state AGS to go after these big box stores, not only would money be returned to your states, but independent grocers and other small businesses will have the chance to thrive,” Walker said. “It would even the playing field and help give everyone a fair chance.
