Lawsuit Filed by FTC Against PepsiCo for Alleged Price Discrimination
In a significant move, the Federal Trade Commission (FTC) filed a lawsuit against PepsiCo in January 2025, accusing the multinational beverage corporation of price discrimination under the Robinson-Patman Act. The case, which marked one of the first major uses of the Act in years, centered on allegations that PepsiCo offered substantial discounts and other benefits to its largest customer, Walmart, while charging higher prices to smaller businesses for similar products.
The lawsuit, which remains partially redacted due to legal protections granted to both parties, alleges that PepsiCo's actions constitute unfair methods of competition by giving preferential treatment to larger retailers like Walmart, a claim that PepsiCo disputes. The FTC argues that these promotions give Walmart an advantage, hurting consumers who pay inflated prices at other stores.
The case, filed under the leadership of FTC Chair Lina Khan, aimed to ensure all businesses, regardless of size, can compete fairly. However, in a surprising turn of events, the lawsuit was withdrawn in May 2025, under the leadership of Chairman Andrew Ferguson. The decision was made with the support of Republican commissioners, including Melissa Holyoak, who did not dissent from this decision.
Commissioner Holyoak has since stated that the case against PepsiCo is one of the worst in her time at the commission, suggesting a lack of evidence to support the FTC's claims. Despite this, some consumer advocates and small business supporters have expressed disappointment and concern that this decision could favor larger corporations.
The FTC is now asking that the legal protections granted to PepsiCo and the retailer be rescinded or suspended, arguing that the case should proceed to allow for a full examination of the allegations. PepsiCo, for its part, has maintained that its practices are in line with industry norms and that the lawsuit is wrong on the facts and the law.
Walmart has declined media requests for comment, while PepsiCo has stated that its promotions are not disguised discriminatory discounts but rather ordinary price concessions. The case, while withdrawn, remains a significant point of discussion in antitrust circles, with implications for competition law and the role of the FTC in protecting smaller businesses.
- The FTC's initial lawsuit against PepsiCo, which was later withdrawn, highlighted the accusation that the company's preferential treatment of larger retailers, such as Walmart, in the form of discounts and benefits, could potentially violate the Robinson-Patman Act, a law related to finance and business regulations.
- The withdrawal of the FTC's lawsuit against PepsiCo, a move led by Chairman Andrew Ferguson and supported by Republican commissioners like Melissa Holyoak, has raised concerns among some consumer advocates and small business supporters, as they believe it could potentially favor larger corporations over smaller businesses in the industry.
