In late November 2012, the FTC issued a notice that it was considering how to update its “Fred Meyer Guides.” Also at issue in that notice was whether the Guides were necessary at all. All of these questions were raised by the Commission as a result of changes in law (like the Supreme Court’s decision in Volvo Trucks v. Reeder-Simco), and in the economy (like, well, the Internet) since the last update to the Guides in 1990. We discussed the notice when it came out in December of 2012, so take a look at that for a trip down memory lane, a brief discussion of Sections 2(d) and 2(e) of the Robinson-Patman Act, and a nice picture of Mr. Fred Meyer himself. But, by way of background, those sections of the Act apply when suppliers, like manufacturers, provide different promotional payments or services to different resellers. In contrast, the main section of the Act, Section 2(a), relates to differences in prices to those resellers.
As a result of the notice, the Commission received seven sets of comments from a fairly wide range of organizations and practitioners including the Antitrust Section of the ABA, the American Antitrust Institute, the Food Marketing Institute, and the National Automobile Dealers Association among others. The easiest question turned out to be whether the Guides were needed at all – all of the commenters agreed that there was a continuing need for the Guides. Also, none recommended that the Guides be overhauled as a result of changes in the law or the economy. As a result, the Commission concluded that the Guides should remain substantially the same.
Instead, the commenters and the Commission focused on specific changes to the Guides. But, despite a number of recommendations for changes, the Commission settled on very few substantive changes. The Commission added some clarifying examples and revised other examples in a number of areas. And the Commission added references to the Internet to ensure that it is clear that the Guides cover Internet commerce. Regarding the Internet, the Commission also clarified that retailers using new methods of retailing products, including the Internet, can in principle, be considered “competing customers” under the Act (competing customers are all businesses that compete in the resale of the seller’s product); and to the extent those methods are competing with a particular mainstream retailer, retailers using those methods may be entitled to promotional allowances and services under 2(d) and (e) that are proportionally equal to those received by mainstream resellers.
Sections 2(d) and (e) only relate to obligations on sellers, not their resellers. Nevertheless, the Commission made clear that it may still proceed against a reseller who receives or induces services or allowances that violate 2(d) or (e) under Section 5 of the FTC Act. But the Commission revised to Guides to state that it will only go after customers under Section 5 where there is likely injury to competition from the violation. The Commission also modified the Guides to reflect some case law that holds that in certain limited circumstances, there may be a private right of action against customers knowingly inducing or receiving discriminatory promotional allowances under Sections 2(a) and (f) of the Robinson-Patman Act.
The updated Guides will be made final on November 10, 2014.