Gluesenkamp Perez supports bill to combat corporate price discrimination

U.S. Rep. Marie Gluesenkamp Perez, D-Skamania, last week announced the introduction of the Fair Prices for Local Businesses Act, which is aimed at bringing down prices for American families by preventing corporations and other suppliers from charging small businesses more for the same product, according to a news release from the congresswoman.

Existing laws are supposed to stop big corporations from using their size to force suppliers into charging smaller businesses more, according to the news release. But over the last four decades, the executive branch and the courts have mostly looked the other way when it comes to enforcing those laws.

Communities have paid the price as huge corporations used price discrimination to crush small businesses, Gluesenkamp Perez said. With more than 100,000 small retailers shutting their doors in the last few decades, local economies have been hollowed out, creating food deserts in low-income and rural areas, the news release stated.

“Corporate giants have been exploiting their size to set two different prices; one for the big box stores and one for everyone else. Even though it’s against the law to make small businesses pay higher prices for the exact same products, the system has failed them,” Gluesenkamp Perez said in the release.

“Small businesses are the lifeblood of my community in Washington and they ought to have protection against price fixing so that regular families get by without being forced to compete on an uneven playing field,” she added.

Greg Drew, owner of Drew's Grocery in Toutle, praised the effort by Gluesenkamp Perez to restore fairness to an uneven playing field:

“Having grown up in a family owned grocery store in a small rural community, I know full well how difficult it is to compete with the buying power of large retail chains,” Drew stated in the release. “There was always the image that since we were small in size, we fit into the box of being a ‘Convenience Store,’ known for higher than normal prices. Common sense will tell you that we had to charge more for our products. There is no way we could compete with the buying power available to large chain stores. In most businesses, profits are largely dictated by cost of goods, expenses to sell those goods, and the volume of sales. What one charges retail will determine success or demise. There are many times over the years that I discovered my cost on some items could be as much, or even more, than a retail price offered by high volume chains on the same item. Try to compete with that.”

The Fair Prices for Local Businesses Act would:

• Repeal the “meeting competition” defense: Under current law, price discrimination is legal if the supplier is meeting a competitor’s price to the retailer. Massive retailers would no longer be able to squeeze all their competing suppliers for special deals, creating competition that brings down prices at retailers large and small alike, the release stated.
• Hold power buyers accountable: Big retailers are rarely held accountable for receiving illegal price discrimination because plaintiffs must prove they did so knowingly. The bill would eliminate the “knowingly” requirement for retailers with more than $100 billion in annual sales, because these huge corporations should know how suppliers price their products.
• Expand the law to cover services, not just goods: Local shops and restaurants would no longer pay higher costs for services like delivery apps, point of sale systems, and credit card swipe fees.
• Set minimum damages to equal the cost of price discrimination: The bill would simplify damage awards for victims of price discrimination to at least match the higher prices they had to pay.

Full text of the bill can be found at tinyurl.com/3jvuknnx. The bill is led in the Senate by Senator Chris Murphy, D-Connecticut.