WASHINGTON, D.C. — T-shirt manufacturer Gildan Activewear SRL and wholesale distributor S&S Holdings LLC have removed contractual restrictions on pricing and discounts offered to competing distributors, resolving a Federal Trade Commission investigation into potential violations of federal price discrimination law.
The agreement previously prohibited Gildan from extending certain prices and discounts available to S&S to rival wholesale distributors, according to the FTC. The restriction raised concerns that competing businesses could face higher purchasing costs because of their relationship with a major supplier.
The companies revised their agreement following an investigation under the Robinson-Patman Act, which restricts certain forms of price discrimination that harm competition.
The amended contract explicitly preserves Gildan’s ability to establish pricing and provide support to other North American wholesale distributors.
“Nothing in this Agreement restricts or restrains Gildan’s discretion to set prices or offer partnership support to any other North American wholesale distributor,” the revised provision states.
The FTC closed its investigation after the companies implemented the changes. Gildan confirmed the amendment in a public letter released by the agency.
Investigators had examined whether Gildan violated Section 2(a) of the Robinson-Patman Act, which prohibits certain discriminatory pricing practices by sellers.
The agency also investigated whether S&S violated Section 2(f), which prohibits buyers from knowingly inducing or receiving price discrimination prohibited by the law.
The investigation ended without an announced enforcement action against either company.
FTC Bureau of Competition Director Daniel Guarnera said contractual arrangements that prevent suppliers from offering competitive prices to other businesses can undermine competition.
“We will not hesitate to enforce the law when a large, powerful firm insulates itself from competition by forcing sellers to give worse prices to the firm’s competitors,” Guarnera said.
The Robinson-Patman Act generally prohibits sellers from charging competing purchasers different prices for comparable goods when the discrimination harms competition, subject to applicable legal requirements and exceptions.
The law also addresses circumstances in which buyers knowingly obtain pricing advantages that violate those restrictions.
The Gildan-S&S resolution follows an FTC settlement with Southern Glazer’s Wine and Spirits, the nation’s largest wine and spirits distributor, involving Robinson-Patman Act enforcement.
According to the FTC, the Southern Glazer’s settlement was the first case under the law resolved by a federal enforcement agency in more than two decades.
The two matters reflect renewed federal scrutiny of pricing arrangements that may favor large distributors over smaller competitors.
For wholesale apparel distributors, the Gildan-S&S amendment removes a contractual restriction on Gildan’s discretion to offer competing businesses pricing and support comparable to what it provides S&S.
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