The U.S. Federal Trade Commission (FTC) has filed a lawsuit against PepsiCo (PEP.O) for allegedly offering preferential pricing to Walmart (WMT.N), a practice the agency claims has harmed competition and driven up consumer prices.
Details of the Lawsuit
The lawsuit, filed in a New York federal court, alleges that PepsiCo violated the Robinson-Patman Act, a law designed to prevent price discrimination that favors large buyers over smaller competitors. This law has seen little enforcement in recent decades.
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According to the FTC, PepsiCo’s exclusive discounting practices disadvantaged other retailers, ranging from large grocery chains to small independent convenience stores, by making it harder for them to compete with Walmart.
PepsiCo’s Response
PepsiCo has denied the allegations, criticizing the FTC’s decision to file the suit. In a statement, the company said it “strongly disputes the FTC’s allegations and the partisan manner in which the suit was filed.”
FTC’s Justification
Outgoing FTC Chair Lina Khan defended the lawsuit, stating it would “ensure all grocers and other businesses—no matter their size—can get a fair shake and compete on the merits of their skill, efficiency, and talent.”
Political Divide
The case highlights a partisan divide within the FTC. The commission’s two Republican members, including Andrew Ferguson, who is set to become chair after President-elect Donald Trump assumes office on Monday, voted against filing the case.
Walmart’s Response
Walmart declined to comment on the lawsuit.
This case could mark a renewed focus on enforcing the Robinson-Patman Act, signaling broader implications for corporate pricing practices in the U.S.