The Federal Trade Commission (FTC) has filed a lawsuit against PepsiCo, Inc., alleging that the company engaged in illegal price discrimination. The complaint accuses Pepsi of providing preferential pricing to a large big box retailer while increasing prices for other retailers and customers.
According to the FTC, Pepsi has disadvantaged various retailers by offering key benefits and advantages, such as promotional payments, exclusively to one of its largest big box customers. This practice allegedly denied competing retailers these same benefits, resulting in inflated prices for consumers and unfair competition. The FTC claims this conduct violates the Robinson-Patman Act (RPA).
FTC Chair Lina M. Khan stated, "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." She emphasized that the FTC's action aims to ensure fair competition among businesses of all sizes.
The lawsuit asserts that Pepsi violated sections 2(d) and 2(e) of the RPA by using advertising and promotional allowances to favor large customers over smaller businesses. This case is part of the FTC's ongoing enforcement actions under the RPA, following a similar lawsuit against Southern Glazer’s in December 2024.
While portions of the law violations are redacted due to legal protections for both Pepsi and its preferred customer, the FTC intends to seek lifting these redactions to demonstrate how Pepsi's practices raised prices for competing retailers.
Pepsi is accused of providing promotional payments and advertising tools exclusively to its favored retailer without extending these benefits equally to competitors. The FTC contends that until these practices are addressed, they will continue to hinder fair competition.
The Commission voted 3-2 in favor of filing for a permanent injunction and other equitable relief in the U.S. District Court for the Southern District of New York. Commissioners Melissa Holyoak and Andrew N. Ferguson dissented from this decision.
The FTC emphasizes its role in promoting competition and protecting consumers while reminding individuals not to fall victim to scams involving demands for money or false promises.
