- May 30, 2023
- Posted by: T.C. Doyle
- Category: Blogs
Why a decades-old law could threaten the foundation of many IT vendor partner programs
By T.C. Doyle
May’s Channelnomics Community Call focused on a little-known and seldom-enforced law that the Biden administration has resurrected to fight inflation and level the playing field for small companies that struggle to compete against industry giants. The law is the Robinson-Patman Act (RPA) of 1936.
First introduced to help small grocers combat the rise of grocery store chains, the law has been revived by the Federal Trade Commission (FTC) to look at suspected pricing abuses in the pharmaceutical and beverage industries. Should the FTC turn its eyes to IT, industry vendors would likely find themselves in a world of hurt. Why? Because vendors don’t generally structure their partner programs in line with FTC mandates.
Channelnomics recently unveiled a new report on the topic, “Inside the Revived Robinson-Patman Act.” There, Channelnomics provides analysis and guidance for understanding the revival of the New Deal-era law.
At its core, the RPA seeks to prohibit price discrimination by preventing suppliers and manufacturers from giving big price breaks to large retailers without granting the same consideration to their smaller counterparts. According to the law, it doesn’t matter whether a partner sells at higher volumes; a supplier or vendor can’t sell a product to two different resellers or retailers at different price points if said pricing strategy is based solely upon volume ecosystems.
If that sounds unsettling — and it should given how many vendor partner programs are structured — it’s important to note that there are exceptions to the rule. But, as Channelnomics notes, ambiguity, unequal standards, and what some charge as contradictions within the law itself and in interpretation of the law by the courts make the law confusing, difficult to comply with, and challenging to enforce.
To date, the FTC hasn’t turned its eyes on the IT industry. But in the event that it does, Channelnomics’ new report will help guide you in terms of how to react. Specifically, the report provides insights on the following:
- Pricing
- Partner tiering
- Exceptions
- Compliance
WHAT’S NEW AT CHANNELNOMICS
- ASK CHANNELNOMICS: How Can We Improve Participation in Training & Certification? Vendors must look at creative ways to address the participation problem. Building a training and certification program doesn’t mean partners will come running.
- Touchpoints: Sources That Shape the Channel: A complete list of channel events, influencers, awards, media brands, analysts, and more.
- In the Margins: Got only a few minutes for a fun new fact, insight, or observation? Then don’t miss Larry’s quick-hit podcast series, “In the Margins.”
COMING SOON: Watch for new content from Channelnomics.
- REPORT — Sustainability Initiatives Take Root in the IT Channel: How tech vendors are extending corporate sustainability efforts to their partner networks and programs.
- ANALYST NOTE — Are VCs influence partners or something more? Influencers take on many shapes, but does this include those with money to invest? Channelnomics takes a look at how to work with VCs effectively.
- PRIMER — Getting Renewals Right: Vendors are struggling with subscription renewals. Many think partners don’t deserve the compensation they expect. But what are they missing? This primer aims to help vendors understand how to structure their renewal policies in such a way that all parties — customers, partners, and vendors — will thrive.
Finally, be sure to join us on June 20 for our next Channelnomics Community Call. The topic: getting renewals right.
Channelnomics Community Calls, which usually take place on the third Tuesday of each month, are open to any channel professional and practitioner. Meanwhile, if you’re a Channelnomics IQ subscriber looking to request your monthly one-on-one call or schedule your annual channel program review, send an e-mail to Laura Maziejka at info@channelnomics.com.