You may laugh when you read that headline, but this is a serious danger. Here’s why:
In Biden’s final months in office, the regulation queen Lina Khan, who headed the FTC, teamed up with trial lawyers and dusted off a 1930s antitrust law called the Robinson-Patman Act to sue companies for LOWERING prices. The law makes it illegal in some cases for firms to sell products to stores at lower prices than others because this is “anticompetitive” behavior.
It’s the dumbest law you ever heard of (we thought monopolies were bad because they RAISE prices). But now, bizarrely, even a number of Republican lawmakers have jumped on the bandwagon urging its reinvigoration in a misguided attempt to “level the playing field.”
In one recent case, Khan brought a complaint against Pepsi for selling bottles of soft drinks to Walmart at lower prices than to smaller local stores.
The legal doctrine here is a frontal assault against the brilliance of the Sam Walton model, which recognized that by purchasing items in bulk and building super stores with economies of scale, consumers win with low prices.
One study by our UP senior fellow, Richard Vedder, found that the Walmart retailing model has saved families tens of billions of dollars over the last 30 years. Walmart may be the greatest anti-poverty program in history.
The Trump FTC under Andrew Ferguson, is rightly trying to bring these lawsuits to an end. Raising prices is no way to make America more affordable.
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