Most Costco members are familiar with this particular moment. In the back of your mind, you realize that this makes sense as you stand in a warehouse the size of a small airport with fluorescent lights humming overhead and a cart filled with a five-pound tub of mixed nuts and a 72-pack of paper towels. The costs are minimal. The math is correct. The deal seems genuine. Most consumers don’t consider whether a law drafted during the Great Depression might eventually make all of it unlawful.
That is no longer a hypothetical. Southern Glazer’s Wine and Spirits was sued by the Federal Trade Commission, first during the Biden administration, for allegedly violating the Robinson-Patman Act, a 1936 antitrust law that forbids selling identical goods to rival customers at different prices. For anyone who shops at a big-box store, the FTC’s argument is sharp and, if you read it carefully, a little concerning: Southern Glazer’s offered discounts to large retailers like Costco and Walmart that were unavailable to smaller consumers. The agency claims that’s not competition. It’s prejudice.
For many years, the Robinson-Patman Act has lain dormant, mostly unenforced, and regarded as a holdover from a different economic era. Regulators who are currently keeping an eye on the case appear to think there is still something worth investigating. If the FTC wins, it’s possible that alcohol distribution will continue to have repercussions. The lawsuit’s reasoning is applicable to a wide range of products, including electronics, household goods, groceries, and pretty much anything that is offered in bulk at a discounted price. The very business strategy that maintains Costco’s competitive prices and narrow profit margins may be in jeopardy.
And there’s the other, stranger story that’s happening at the same time. In March, a Costco member filed a class-action lawsuit in a federal court in Illinois, claiming that the company had raised prices during the tariff wars, secretly requested government reimbursement for those same tariffs after the Supreme Court declared several of them unconstitutional, and then assured customers that they would receive “future lower prices” instead of direct reimbursement. According to CEO Ron Vachris, the company’s goal is to improve overall pricing in order to return value. According to the plaintiffs, that is an easy solution for a business that has already received the funds.
Observing this from the outside gives the impression that Costco built its whole brand around the idea that paying a membership fee entitles you to something more honest and equitable than your typical grocery store. That is quietly punctured by the lawsuit. Whether or not it is successful legally, it raises an issue that is more difficult to ignore: who exactly benefited if a retailer raises prices when tariffs are imposed and refuses to reimburse customers when those tariffs are declared invalid?
The Fair Prices for Local Businesses Act, which aims to strengthen the very antitrust provisions that make bulk discount models legally vulnerable, is currently making its way through the Senate in Congress. Proponents contend that the law gives small retailers, who have been under pressure for decades, a level playing field. Walmart shareholders are not the ones who would be most affected by the price increase, according to critics, many of whom are consumer advocates. They are the customers who fill those enormous shopping carts.
It’s difficult to ignore how these two legal threads are tightening around a retail model that has been largely uncontested for thirty years. These structures weren’t invented by Costco and Walmart. They refined them, made them seem inevitable, and optimized them. Regulators allowed bulk pricing to succeed. Sitting in federal courtrooms where the answer is still being debated, one motion at a time, it is now genuinely unclear whether that will continue.
The warehouses remain operational. The discounts are still available. However, the underlying legal framework is changing in ways that may take years to fully comprehend.⁖※
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