U.S. antitrust enforcement puts price discrimination in the spotlight

Revival of the RPA

In December 2024, we discussed the outgoing Biden administration’s effort to resuscitate the RPA after nearly 25 years of dormancy. 

The RPA generally prohibits selling goods of the same “grade and quality” to different commercial buyers at disparate prices unless the difference is justified, for example, by differences in the cost of manufacture, sale, or delivery.

Despite the federal government’s mandate to enforce this broad prohibition on business-to-business price discrimination, the last federal RPA action before 2024, against McCormick and Company, was resolved in 2000. 

The FTC then appeared to abandon the statute altogether until December 2024, when it sued Southern Glazer’s Wine and Spirits, LLC in what many observers saw as a last-ditch effort to revive the law before the second Trump administration took office.  The following month, just days before President Trump’s inauguration, the FTC announced a second RPA lawsuit against another company.

Southern Glazer’s: a trailblazing case

When the FTC accused Southern Glazer’s of charging small, independent retailers “drastically higher prices” than it charged large chains, then-Commissioner Andrew Ferguson was one of two Republican commissioners who dissented from the 3-2 vote. He cast doubt on the FTC’s legal theory and characterized the action as “an imprudent use of the Commission’s enforcement resources even if it were likely to prevail.”

Months later, Ferguson took the reins as FTC Chair.

Ferguson’s ascension prompted many observers to revisit his Southern Glazer’s dissent for hints about how, if at all, the new Chair would enforce the RPA. 

In his dissent, Ferguson maintained that the RPA should not simply collect dust on the FTC’s shelf. The executive branch, in his view, “should not categorically and publicly refuse to enforce laws that Congress has passed and the President has signed,” and the separation of powers “forbids the suspension of the laws merely because of a policy disagreement.” 

In other words, Ferguson invoked a constitutional obligation to enforce duly enacted statutes. 

Yet he cautioned against bringing RPA suits “merely for the sake of reviving enforcement.” This balanced view left practitioners wondering when, if ever, Ferguson would deem RPA enforcement appropriate, and the fate of the Southern Glazer’s case became the subject of much speculation. 

Reaching a resolution

On October 2, 2026, the FTC announced a settlement with Southern Glazer’s, the nation’s largest wine and spirits distributor, following a 2-0 Commission vote. 

Under the proposed stipulated order filed in the Central District of California, the distributor agreed to maximum thresholds for price disparities in “paired” transactions, in which it sells a product to a chain retailer and a nearby independent retailer contemporaneously.

The order covers nearly all Southern Glazer’s sales to five chain retailers in 26 states and requires Southern Glazer’s to make direct payments to harmed independent retailers if an independent monitor finds a violation. It will remain in effect for six years. 

Hot on the heels: more RPA enforcement

The following week, the FTC announced another RPA resolution, this time involving T-shirt manufacturer Gildan Activewear SRL and wholesale distributor S&S Holdings LLC. 

The FTC had investigated whether Gildan violated Section 2(a) of the RPA, and whether S&S violated Section 2(f) by knowingly inducing or receiving discriminatory prices, based on a contract term inserted at S&S’s request that allegedly prohibited Gildan from offering S&S’s competitors certain pricing and discounts available to S&S.

The FTC closed the investigation after the parties amended their agreement to remove the term and expressly preserve Gildan’s discretion to set prices or offer partnership support to any other North American wholesale distributor. Gildan did not admit liability and maintains that the term did not harm competition.

The FTC described the Gildan resolution as building on the Southern Glazer’s settlement. FTC Bureau of Competition Director Daniel Guarnera vowed that the agency “will not hesitate to enforce the law when a large, powerful firm insulates itself from competition by forcing sellers to give worse prices to the firm’s competitors.” 

What next for the RPA?

These developments are a reminder that RPA enforcement remains a focus for the FTC.  The change in administration has not resulted in a return to a drop off in cases, and current FTC leadership continues to scrutinize supplier pricing practices. 

Businesses should be mindful of the potential for government price discrimination investigations. They should also remember that private parties may enforce the RPA and recover treble damages.

A&O Shearman’s teams stand ready to advise businesses on RPA compliance and a range of antitrust and competition issues.