The Federal Trade Commission has dismissed without prejudice a Robinson-Patman Act lawsuit against PepsiCo. The lawsuit, filed in January in the U.S. District Court of the Southern District of New York, alleged that Pepsi violated the FTC Act by engaging in price discrimination by providing side payments, such as discounts or services, to favored customers.
“The Biden-Harris FTC rushed to authorize this case just three days before President Trump’s inauguration in a nakedly political effort to commit this administration to pursuing little more than a hunch that Pepsi had violated the law,” said FTC Chairman Andrew Ferguson. “Taxpayer dollars should not be used for legally dubious partisan stunts. The FTC’s outstanding staff will instead get back to work protecting consumers and ensuring a fair and competitive business environment.”
The commission voted 3-0 to dismiss the complaint, the FTC said in a Thursday news release.
“The staff at the Federal Trade Commission—both economists and lawyers—are highly skilled professionals, and we as a commission should not have sent them into court to fight a losing battle. Today’s dismissal allows our dedicated staff to focus on bringing enforcement actions where we have reason to believe the law has been violated, and where they can do what they do best—protect American consumers,” FTC Commissioner Melissa Holyoak said.
In the complaint, the FTC alleged that Purchase, New York-based PepsiCo has disadvantaged retailers—ranging from large grocery chains to independent, local convenience stores—who compete with one of Pepsi’s largest big-box customers by consistently giving that favored retailer customer key benefits and advantages, such as promotional payments, while denying those same benefits to its competitors.
Under the Robinson-Patman Act, sellers are prohibited from engaging in price discrimination by using advertising and promotional allowances, which are financial incentives given to retailers by manufacturers to promote a product or brand, to favor large customers over small businesses.
PepsiCo said in a statement to CSP that it was pleased with the FTC's further consideration and withdrawal of this matter and it "has always and will continue to provide all customers with fair, competitive and non-discriminatory pricing, discounts and promotional value."
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