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FTC Dismisses Antitrust Case Against PepsiCo
The Federal Trade Commission (FTC), currently under Republican control, voted on Thursday to drop an antitrust lawsuit against PepsiCo. The previous FTC, during the final days of the Biden administration, had initiated the litigation, alleging unfair pricing practices. The dismissal highlights the shifting priorities within the agency and raises concerns about competition and fair business practices.
Background of the PepsiCo Lawsuit
The lawsuit, filed in January, contended that PepsiCo provided undue price advantages to Walmart, disadvantaging other suppliers and consumers. The legal action was based on the rarely invoked Robinson-Patman Act of 1936. This act is intended to prevent companies from leveraging promotional incentives to favor larger clients over smaller ones, fostering fair competition.
Partisan Divisions Within the FTC
During the initial filing, then-FTC Chairwoman Lina Khan, a Democrat, was supported by fellow Democratic Commissioners Rebecca Slaughter and Alvaro Bedoya. Republican Commissioners Andrew Ferguson and Melissa Holyoak voiced their dissent at the time, signifying a partisan split on the issue.
Leadership Changes and Controversy
Subsequent to the lawsuit’s filing, significant leadership changes occurred. Following President Trump’s inauguration, Lina Khan stepped down, and Trump subsequently removed Bedoya and Slaughter from their positions. Bedoya and Slaughter have since challenged their dismissal in court, arguing its illegality.
Ferguson’s Critique of the Lawsuit
Andrew Ferguson, the current FTC Chairman, labeled the PepsiCo lawsuit a “dubious partisan stunt,” arguing that the agency’s resources could be better utilized elsewhere. He emphasized what he saw as the politically motivated nature of the original filing.
Ferguson’s Statement
- “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,” Ferguson stated.
PepsiCo’s Response
PepsiCo, headquartered in Purchase, New York, was contacted for comment on Thursday. When the suit was initially filed, the company asserted that it adhered to fair trade practices and did not selectively offer discounts or promotional support.