The Federal Trade Commission (FTC) announced on Friday that it has filed a lawsuit against PepsiCo, accusing the food and beverage giant of engaging in illegal price discrimination. The agency alleges that PepsiCo offered preferential pricing to an unnamed retailer at the expense of its competitors.
The FTC’s lawsuit claims that PepsiCo violated the Robinson-Patman Act, a law enacted in 1936 that prohibits sellers from offering different prices for the same “commodity” to competing buyers or from selectively providing benefits such as advertising compensation or promotional allowances.
The agency contends that PepsiCo provided Walmart with promotional payments, advertising tools, and other allowances that were not made available to Walmart’s competitors.
PepsiCo has denied the allegations, stating that the FTC’s claims are both factually and legally flawed. “PepsiCo strongly disputes the FTC’s allegations, as well as the partisan manner in which the lawsuit was filed.
We will vigorously present our case in court,” the company said. “PepsiCo’s practices align with industry norms, and we do not favor specific customers by offering discounts or promotional support to some while excluding others.”
The complaint, filed in the Southern District of New York, remains under seal. The FTC noted that a “substantial portion” of the alleged violations in the case has been redacted due to legal protections for PepsiCo and the large retailer.
The agency is seeking to lift these redactions to reveal how PepsiCo allegedly violated the law and how its actions impacted competitors by leading to higher prices.
Although the Robinson-Patman Act was enforced regularly following its passage in 1936, the federal government largely ceased enforcement during the deregulation wave of the 1980s.
The FTC resumed enforcement efforts in December, starting with a lawsuit against Southern Glazer’s, the largest distributor of wine and spirits in the United States.
This lawsuit comes as Lina Khan prepares to step down as chair of the FTC, with her term ending before President-elect Donald Trump’s inauguration on Monday. Andrew Ferguson, a Republican member of the commission and Khan’s successor, issued a statement dissenting from the decision to sue PepsiCo.
The Biden administration has initiated a series of legal actions against corporations and executives in its final days, with other targets including Capital One, Southwest Airlines, and Elon Musk.