Inside the Revived Robinson-Patman Act
The executive summary hits the highlights of our new report, which takes a deep dive into the Robinson-Patman Act, analyzing why its revival could pose challenges for the IT channel.
The technology channel is largely unregulated. While there are tax and safety laws that govern the sale, handling, shipping, and branding of products, few laws exist that specifically govern the channel’s structure and operations except one: the Robinson-Patman Act (RPA) of 1936.
The Great Depression-era law was part of a “fair trade” movement by Congress in an effort to curb the power of size. 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.
While the law was once routinely enforced, the Federal Trade Commission’s enforcement dropped off considerably in the 1970s. Now, the FTC is signaling a revival of the long-dormant law, and the implications for the IT channel are significant. The revival of the RPA could shake the channel’s foundations and challenge the conventional wisdom of how a channel program’s structures and operations work.
In this Channelnomics executive summary, we present an overview of the full report, where we review the Robinson-Patman Act in detail, define its anticompetitive provisions in the context of the IT channel, provide insights into what it means to vendors and distributors, and give guidance on what could come of its widespread enforcement.