In this article, the Federal Trade Commission announced on Friday that it is taking legal action against PepsiCo for alleged illegal price discrimination. The FTC claims that PepsiCo provided an unnamed retailer, later revealed to be Walmart according to sources familiar with the matter, with more favorable prices compared to its competitors.
The FTC accuses Pepsi of violating the Robinson-Patman Act, a law that prohibits sellers from offering different prices to competing buyers for the same product or selectively providing allowances such as advertising compensation. The agency alleges that Pepsi offered Walmart promotional payments, allowances, advertising, and promotional tools that were not extended to Walmart’s competitors.
Pepsi has refuted the allegations, stating that the lawsuit filed by the FTC is factually and legally incorrect. The company emphasized that its practices align with industry standards and that it does not show favoritism by offering discounts or promotional support to specific customers.
Walmart has not yet responded to CNBC’s request for comment on the matter. The complaint against Pepsi was filed in the Southern District of New York and is currently sealed. The FTC mentioned that a significant portion of the alleged violations is redacted in the lawsuit due to legal protections afforded to Pepsi and the large retailer.
The FTC aims to reveal the redacted information to demonstrate how Pepsi’s actions violated the law and resulted in higher prices for other retailers. The Robinson-Patman Act, enacted in 1936, saw a resurgence in enforcement by the FTC in December, following a period of deregulation in the 1980s.
The lawsuit was filed on the last business day before President-elect Donald Trump’s inauguration, marking the end of Lina Khan’s tenure as chair of the FTC. Andrew Ferguson, Khan’s Republican successor, who currently serves on the commission, expressed dissent against the decision to sue Pepsi.
In its final days, the Biden administration has initiated legal actions against various companies and corporate figures, including Capital One, Southwest Airlines, and Elon Musk. Mary Catherine Wellons from CNBC contributed to the reporting of this story.
