6.12. SR 10-18-1999 - Laserfiche WebLink

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Chapter 10 Page 18 of25 . concerned about the survival of the small retailer in the face of growing power of the mega-retail discount chains. Should not the 1995 and 1996 Small Business Committee of both the House and Senate continue this type of public hearing? Materials from the U.S. Congressional Budget Office (CBO) were included in Chapter V for the purpose of opening the question (in public forums) as to which regulatory statutes are available at the federal level that might pertain to the behavior and growing power of chain stores. Their interpretative comments and analyses of the Robinson-Patman Act were particularly valuable. CBO describes "how in the 20's and 30's, large chain retail stores rose to prominence. The market power of some of these chains enabled them to negotiate lower prices from manufacturers than could be obtained by the traditional small independent retailer. For that and other reasons, the small retailer found it difficult to compete, leading to pressure on Congress to do something to help them. The dissatisfaction with the lack of success of the Clayton Act in preventing price discrimination, led to the passage in 1936 of the Robinson-Patman Act." There appears to be many similarities in the retail market today as was noted by CBO for the period of the 20's and 30's. Then it was the large chain that threatened the small retailer; today it is the mega- retail discount chain. Predatory Pricing and What Was Learned from the Majority and Dissenting Opinions in WaI- Mart's Victorious Appeal to the Arkansas Supreme Court . Chapter VI analyzed in some detail Wal-Mart's arguments to set aside the Chancery Court's decision against it. Wal-Mart beHeved that there was no rational basis for the Arkansas Court to have mled against the company. Further, in the appeal, Wal-Mart believed the Arkansas Act 'Nas preempted by federal law by the Robinson-Patman .Amendments to the Clayton Act which specifically addressed the weapon of predatcry pricing by monopolies. The discussions in Chapter V and Chapter VI do suggest that it would be appropriate for the Small Business Committees of the House of Representatives and the U.S. Senate to hold hearings.onthe growing power of the mega-retail discount chains. The Court's concluding comment in the dissent is reproduced here: "We would hold that the Appellant has failed to prove that the Chancellor used an improper . legal standard with respect to the inference of intent to injure competitors and to destroy or substantially lessen competition. We also find that the Chancellor could have found an intent to injure competitors from the evidence in the record and particularly from the testimony of David Glass, President ofWal-Mart Stores, Inc. who used language such as aggressive,' to do whatever it takes,' kill the competition's momentum,' and war zones.' Appellant failed to establish that the Arkansas Act violates rights guaranteed by the Arkansas Constitution, Article 2, Section 2. Appellant also failed to establish that the Arkansas Act was preempted by federal law.28 . The Supreme Court, despite a strongly worded dissenting opinion by three justices, reversed the Chancery Court's victory for American Drugs Inc. and dismissed the original plaintiffs case and awarded in favor ofWal-Mart, the Appellant. In Chapter VI, the author provided great detail in the dissenting opinion because of references to the http://www.shilsreport.org/chapl0.html 10/6/99