Many of the lawsuit’s claims derived from the 1936 Robinson-Patman act, which prohibits companies from using certain incentives to favor large customers over their smaller competitors.
The Federal Trade Commission on Tuesday voted to dismiss a Biden-era lawsuit against PepsiCo.
According to The Associated Press, the lawsuit was filed earlier this year, in January.
In the original complaint, Department of Justice attorneys alleged that PepsiCo provided unfair price advantages to Walmart—at the expense of all other vendors and consumers. Many of the lawsuit’s claims derived from the 1936 Robinson-Patman act, which prohibits companies from using certain incentives to favor large customers over their smaller competitors.
“When firms like Pepsi give massive retailers a leg up, it tilts the playing field against small firms and ultimately inflates prices for American consumers,” then-FTC Chair Lina Khan said in a January statement announcing the lawsuit. “The FTC’s action will help ensure all grocers and other businesses—no matter the size—can get a fair shake and compete on the merits of their skill, efficiency, and talent.”
Khan, along with the FTC’s Democratic majority, were pushed out of power shortly after President Donald Trump took office.
At the time of the lawsuit’s filing, some of the Commission’s conservative members expressed strong skepticism of its claims. Melissa Holyoak, who dissented against the decision to file suit, said that the complaint may be “the worst case I have seen in my time at the commission.”
“Pepsi’s promotions to the retailer at not disguised discriminatory discounts but rather ordinary price concessions,” Holyoak wrote in her dissent.
Andrew Ferguson, a Republican and the newly-appointed head of the Federal Trade Commission, has since characterized the lawsuit as a “dubious partisan stunt.”
“The Biden-Harris FTC rushed to authorize this case just three days before President Trump’s inauguration in a nakedly political effort to commit this administration to pursuing little more than a hunch that Pepsi had violated the law,” Ferguson said in a statement.
“Taxpayer dollars should not be used for legally dubious partisan stunts,” he added. “The FTC’s outstanding staff will instead get back to work protecting consumers and ensuring a fair and competitive business environment.”
PepsiCo has indicated that it is pleased with the government’s decision to request a dismissal.
“PepsiCo has always and will continue to provide all customers with fair, competitive, and non-discriminatory pricing, discounts, and promotional value,” PepsiCo said in a statement.
The Associated Press notes that, in the years before President Trump returned to the Oval Office, PepsiCo had come under increasing scrutiny for its allegedly misleading business practices. In 2022, for instance, PepsiCo acknowledged that it had reduced the size of its standard Gatorade bottles form 32 ounces to 28 ounces, but failed to provide any answer as to why the newer, smaller size cost more than its larger forebear.
Sources
FTC Dismisses Lawsuit Against PepsiCo
FTC dismisses lawsuit against PepsiCo that was filed by Biden-era FTC
US lawsuit accuses PepsiCo of price discrimination that favored Walmart over smaller stores
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