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consumer rights
Booze Hound! Lina Khan, Not Done Yet, Targets Nation's Largest Alcohol Seller
"The FTC is doing what our government should be doing: using every tool possible to make life better for everyday Americans," said one advocate.
Dec 12, 2024
The U.S. Federal Trade Commission on Thursday sued Southern Glazer's Wine and Spirits, alleging that the nation's largest alcohol distributor, "violated the Robinson-Patman Act, harming small, independent businesses by depriving them of access to discounts and rebates, and impeding their ability to compete against large national and regional chains."
The FTC said its complaint details how the Florida-based company "is engaged in anticompetitive and unlawful price discrimination" by "selling wine and spirits to small, independent 'mom-and-pop' businesses at prices that are drastically higher" than what it charges large chain retailers, "with dramatic price differences that provide insurmountable advantages that far exceed any real cost efficiencies for the same bottles of wine and spirits."
The suit comes as FTC Chair Lina Khan's battle against "corporate greed" is nearing its end, with U.S. President-elect Donald Trump announcing Tuesday that he plans to elevate Andrew Ferguson to lead the agency.
Emily Peterson-Cassin, director of corporate power at Demand Progress Education Fund, said Thursday that "instead of heeding bad-faith calls to disarm before the end of the year, the FTC is taking bold, needed action to fight back against monopoly power that's raising prices."
"By suing Southern Glazer under the Robinson-Patman Act, a law that has gone unenforced for decades, the FTC is doing what our government should be doing: using every tool possible to make life better for everyday Americans," she added.
According to the FTC:
Under the Robinson-Patman Act, it is generally illegal for sellers to engage in price discrimination that harms competition by charging higher prices to disfavored retailers that purchase similar goods. The FTC's case filed today seeks to ensure that businesses of all sizes compete on a level playing field with equivalent access to discounts and rebates, which means increased consumer choice and the ability to pass on lower prices to consumers shopping across independent retailers.
"When local businesses get squeezed because of unfair pricing practices that favor large chains, Americans see fewer choices and pay higher prices—and communities suffer," Khan said in a statement. "The law says that businesses of all sizes should be able to compete on a level playing field. Enforcers have ignored this mandate from Congress for decades, but the FTC's action today will help protect fair competition, lower prices, and restore the rule of law."
The FTC noted that, with roughly $26 billion in revenue from wine and spirits sales to retail customers last year, Southern is the 10th-largest privately held company in the United States. The agency said its lawsuit "seeks to obtain an injunction prohibiting further unlawful price discrimination by Southern against these small, independent businesses."
"When Southern's unlawful conduct is remedied, large corporate chains will face increased competition, which will safeguard continued choice which can create markets that lower prices for American consumers," FTC added.
Southern Glazer's published a statement calling the FTC lawsuit "misguided and legally flawed" and claiming it has not violated the Robinson-Patman Act.
"Operating in the highly competitive alcohol distribution business, we offer different levels of discounts based on the cost we incur to sell different quantities to customers and make all discount levels available to all eligible retailers, including chain stores and small businesses alike," the company said.
Peterson-Cassin noted that the new suit "follows a massive court victory for the FTC on Tuesday in which a federal judge blocked a $25 billion grocery mega-merger after the agency sued," a reference to the proposed Kroger-Albertsons deal.
"The FTC has plenty of fight left and so should all regulatory agencies," she added, alluding to the return of Trump, whose first administration saw
relentless attacks on federal regulations. "We applaud the FTC and Chair Lina Khan for not letting off the gas in the race to protect American consumers and we strongly encourage all federal regulators to do the same while there's still time left."
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Over Apple's Objections, Oregon Governor Signs Nation's Strongest Right to Repair Law
"Oregon becomes the first state to ban 'parts pairing,' which let companies like Apple decide when and how you replace parts."
Mar 27, 2024
In a move that advocates said will save Oregon residents money while supporting small businesses and reducing waste of electronic devices, Democratic Gov. Tina Kotek on Wednesday signed the Right to Repair Act, a law that passed earlier this month despite Apple's lobbying efforts.
The Public Interest Research Group (PIRG), applauded the signing of the bill, which requires manufacturers to provide Oregonians and small repair businesses with access to the parts, tools, and information needed to fix personal electronics and household appliances.
Manufacturers like Apple frequently require consumers to go to their stores or authorized service providers for repairs, making them expensive for customers and difficult to access for people who live far from the providers.
Charlie Fisher, state director of Oregon PIRG, said the law means Oregon is "moving forward on an innovation even more critical than a new gadget: the right to fix our electronic devices."
"By eliminating manufacturer restrictions, the right to repair will make it easier for Oregonians to keep their personal electronics running," said Fisher. "That will conserve precious natural resources and prevent waste. It's a refreshing alternative to a 'throwaway' system that treats everything as disposable."
The Right to Repair Act, which will go into effect on January 1, 2025, was supported by roughly 100 small businesses that provide repairs across the state, as well as recycling nonprofit organizations.
Apple testified against the bill, saying it opposed a provision against "parts pairing." The practice requires consumers or independent repair businesses to purchase parts from Apple and have them validated by the company.
John Perry, a senior security manager at Apple, told state senators that the provision would "undermine the security, safety, and privacy of Oregonians by forcing device manufacturers to allow the use of parts of unknown origin and consumer devices."
State Rep. Courtney Neron (D-26) cited a letter from the Federal Trade Commission when she told her colleagues that Apple's parts paring requirements "drive up the price that consumers must pay to fix a device and cause consumers to purchase a new device before the end of its useful life."
"Manufacturer repair restrictions also make it more challenging for small repair businesses to compete and contribute to unnecessary e-waste," she said.
Pro-labor media organization More Perfect Union called Kotek's signing of the bill "a major loss for Apple."
"Oregon has a proud history of passing forward thinking policies that help Oregonians steward and respect the resources that go into making the products we use everyday," said Celeste Meiffren-Swango, state director of Environment Oregon, "and we are building on that legacy with the Right to Repair Act."
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'Really Big': US Supreme Court Ruling Against Norfolk Southern Seen as Rebuke to Corporate Impunity
Big business lawyers are "going to be furious with this decision," said one legal expert.
Jun 27, 2023
Opponents of unmitigated corporate power celebrated Tuesday when the U.S. Supreme Court rejected Norfolk Southern's attempt to limit where companies can be sued.
In a 5-4 opinion written by Justice Neil Gorsuch and joined by Justices Clarence Thomas, Samuel Alito, Sonja Sotomayor, and Ketanji Brown Jackson, the high court ruled that Pennsylvania's "consent-by-registration" law "requiring an out-of-state firm to answer in the commonwealth any suits against it in exchange for status as a registered foreign corporation and the benefits that entails" does not violate the due process clause of the 14th Amendment.
The decision vacates an earlier judgment by the Pennsylvania Supreme Court and remands the case.
"This is really big," Slate's Mark Joseph Stern tweeted. Big business lawyers are "going to be furious with this decision."
"This is big—and, in my view, good—because it allows states to exercise personal jurisdiction over corporations that do business within the state but are incorporated elsewhere, often in a jurisdiction that they deem more favorable to their interests," Stern continued.
"Pennsylvania requires out-of-state corporations to file paperwork consenting to appear in Pennsylvania courts as a condition of doing business within the state," Stern added. "Gorsuch says: Nothing about that scheme violates due process."
Matt Stoller, director of research at the American Economic Liberties Project, also applauded the decision.
In 2017, months after being diagnosed with colon cancer, former Norfolk Southern worker Robert Mallory filed a lawsuit alleging that his illness stemmed from workplace exposure to asbestos and other hazardous materials and that the rail carrier failed to provide safety equipment and other resources to ensure he was sufficiently protected on the job.
Although he had never worked in Pennsylvania, Mallory filed his lawsuit in the Philadelphia County Court of Common Pleas because his attorneys were from the state and "he thought he would get the fairest access to justice there," Ashley Keller, the lawyer representing him before the U.S. Supreme Court, toldThe Lever in February.
As Rebecca Burns and Julia Rock, two of the investigative outlet's reporters, explained at the time:
Norfolk Southern asserts that being forced to defend the case in Pennsylvania would pose an undue burden, thereby violating its constitutional right to due process.
Even though Norfolk Southern owns thousands of miles of track in the Keystone State, the Philadelphia county court sided with the railroad and dismissed the case. Mallory appealed, and the case wound its way through state and federal courts before landing at the U.S. Supreme Court last year.
Norfolk Southern asked the U.S. Supreme Court "to uphold the lower court ruling, overturn Pennsylvania's law, and restrict where corporations can be sued, upending centuries of precedent," the journalists noted.
The American Association of Railroads (AAR), the rail industry's largest lobby, filed a brief last September on behalf of Norfolk Southern. AAR and other powerful corporate lobbying groups such as the U.S. Chamber of Commerce, the National Association of Manufacturers, and the American Trucking Association sought to undermine the ability of workers and consumers to file lawsuits in the venue of their choosing.
President Joe Biden's administration, meanwhile, came under fire earlier this year when The Lever revealed that the U.S. Department of Justice had also filed a brief siding with the railroad giant behind the toxic derailment in East Palestine, Ohio.
If Norfolk Southern had prevailed, it could have been easier for the profitable rail carrier to thwart pending and future lawsuits "on the grounds that they're filed in the wrong venue," The Lever reported, citing Scott Nelson, an attorney with the Public Citizen Litigation Group, which filed a brief backing Mallory. At particular risk would have been "lawsuits filed by residents exposed to hazardous chemicals as the result of accidents in other states," including victims of air or water pollution stemming from the disaster in East Palestine, five miles west of the Pennsylvania state border.
“[Norfolk Southern] might say, 'You can only sue us in Ohio or Virginia [where Norfolk Southern is headquartered],' even if you were injured at your home in Pennsylvania from an accident that took place five miles away in Ohio," Nelson warned.
A ruling in the rail giant's favor could have also established "a national precedent limiting where workers and consumers can bring cases against corporations," Burns and Rock pointed out.
However, workers and consumers are not out of the woods yet. As Bloomberg Lawreported Tuesday, "Alito seemed to invite a future challenge against the [Pennsylvania] law in his concurrence," where he suggested that "Norfolk Southern could win when the case goes back to the lower court."
"In my view, there is a good prospect that Pennsylvania's assertion of jurisdiction here—over an out-of-state company in a suit brought by an out-of-state plaintiff on claims wholly unrelated to Pennsylvania—violates the commerce clause," Alito argued.
Sean Marotta, a partner at Hogan Lovells, which filed a brief on behalf of a law professor in support of Norfolk Southern, "is telling his clients not to panic but to 'stay on guard,'" according to Bloomberg Law. "Under this ruling, he said state legislatures could amend their registration statutes to impose consent-by-registration. They could basically copy and paste the Pennsylvania law because the court is saying it's okay under the Constitution's due process clause, he said."
"There's still a dormant commerce clause fight to have," Marotta told the outlet.
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