FTC Sues PepsiCo Under Robinson-Patman Act for Favoring Walmart, on Last Day of Lina Khan's Tenure

Jan 17, 2025, 04:36 PM

The U.S. Federal Trade Commission (FTC) has filed a lawsuit against PepsiCo Inc., the second-largest food company in the world, under the Robinson-Patman Act, alleging that the company engaged in illegal price discrimination by offering preferential pricing and promotional payments to Walmart, a large big box retailer, at the expense of smaller competitors. This action, taken on the final business day of FTC Chair Lina Khan's tenure, marks the second such lawsuit filed by the FTC under the rarely invoked 1930s law. The FTC claims that PepsiCo's practices have led to higher prices for consumers and disadvantaged other retailers, ranging from large grocery chains to independent convenience stores. PepsiCo has denied the allegations, stating that its practices align with industry norms and that it does not favor certain customers. The lawsuit was filed in the U.S. District Court for the Southern District of New York, with a vote of 3-2 by the Commission to authorize the filing. The case seeks to address the alleged violations and aims to ensure fair competition among retailers of all sizes.