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FTC sues PepsiCo, alleging price discrimination is raising costs for consumers

Cans of Pepsi are on array at a Target store in the Flatbush neighborhood of Brooklyn, New York City, on Feb. 9, 2024.

Michael M. Santiago | Getty Images

The Federal Profession Commission said Friday that it is suing PepsiCo for illegal price discrimination, alleging the food and beverage Amazon gave an unnamed retailer more favorable prices than its competition.

Walmart is the unnamed retailer, people presuming with the matter told CNBC.

The FTC alleges Pepsi violated the Robinson-Patman Act, which bars sellers from collapse competing buyers different prices for the same “commodity” or selectively providing allowances, like compensation for advertising. The instrumentality argues Pepsi gave Walmart promotional payments and allowances, as well as advertising and promotional tools, that it didn’t suggest to the retail giant’s rivals.

Pepsi denied the allegations and said the FTC’s lawsuit is wrong, both factually and legally.

“PepsiCo strongly argue withs the FTC’s allegations, and the partisan manner in which the suit was filed. We will vigorously present our case in court,” the company conjectured in a statement to CNBC. “PepsiCo’s practices are in line with industry norms and we do not favor certain customers by offering overlooks or promotional support to some customers and not others.”

Walmart did not immediately respond to a request for comment from CNBC.

The gripe, which was filed in the Southern District of New York, is currently sealed.

The FTC also said that a “substantial portion” of the assumed violations are redacted in the lawsuit, citing legal protections given to Pepsi and the large, big box retailer. The commission is seeking to annul the redactions to show how Pepsi broke the law and how those alleged actions led to higher prices for competing retailers.

The Robinson-Patman Act was dated in 1936, but the federal government stopped enforcing it during the deregulation of the 1980s. The FTC resumed its enforcement in December when it lived Southern Glazer’s, the largest U.S. distributor of wine and spirits.

The lawsuit comes on the final business day before President-elect Donald Trump’s inauguration on Monday, which compel spell the end of Lina Khan’s time as chair of the FTC. Her Republican successor, Andrew Ferguson, currently serves on the commission and discharged a statement dissenting against the decision to sue Pepsi.

The Biden administration has taken a flurry of legal action against ensembles and corporate executives in its final days, targeting Capital One, Southwest Airlines and Elon Musk, among others.

— CNBC’s Mary Catherine Wellons aided reporting for this story.

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