The Federal Trade Commission (FTC) has decided to drop its legal case against PepsiCo, which accused the company of engaging in “illegal price discrimination” in soft drinks.
The lawsuit, filed in the final days of the Biden administration, claimed that PepsiCo provided “unfair pricing advantages” to a “large, big box retailer”, while increasing prices for other competing retailers and customers.
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In a statement issued yesterday (22 May), FTC chairman Andrew Ferguson said the lawsuit was dismissed because “the Biden-Harris FTC rushed to authorise this case just three days before President Trump’s inauguration in a nakedly political effort”.
“Taxpayer dollars should not be used for legally dubious partisan stunts,” Ferguson added.
The commission’s vote to dismiss the complaint was unanimous at three to zero.
The FTC’s January lawsuit alleged that PepsiCo’s practices violated the Robinson-Patman Act (RPA) by offering promotional benefits to the favoured retailer, which were not extended to competing businesses.
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By GlobalDataThese benefits included promotional payments, which were not extended to competing businesses and violates the Robinson-Patman Act (RPA).
These “unfair practices” allegedly resulted in inflated prices for American consumers and hindered fair competition.
The lawsuit was filed in the US District Court for the Southern District of New York.
Responding to the lawsuit in January, PepsiCo said its “practices are in line with industry norms, and we do not favour certain customers by offering discounts or promotional support to some customers and not others”.
Commenting on the latest dismissal, FTC commissioner Melissa Holyoak said: “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.”
