The Federal Trade Commission (FTC) is reportedly investigating soft drink giants Coca-Cola and Pepsi for alleged price discrimination in violation of federal antitrust law.
The FTC is reportedly evaluating Pepsi and Coca-Cola’s pricing strategies based on the Robinson-Patman Act, according to Politico. The law is a 1936 antitrust bill designed to keep small retailers competitive with larger stores by banning suppliers from offering better prices to larger buyers for the same product.
Scoop: The FTC has recently opened a probe of Coke and Pepsi’s soda pricing under the Robinson Patman Act. The agency is looking to revive the long dormant 1936 law which bans price discrimination, requiring suppliers to offer the same prices to all buyershttps://t.co/Pd9NZWOMhW
— Josh Sisco (@joshua_sisco) January 10, 2023
It reflects a broader strategy of aggressive antitrust action by FTC Chair Lina Khan and other Democrats on the commission, such as new FTC Commissioner Alvaro Bedoya, who has called for reviving antitrust enforcement under the Robinson-Patman Act. (RELATED: Biden Regulator Fires Warning Shot At Musk’s Twitter, Tech Companies)
The FTC last used the Robinson-Patman Act in 2000, when it charged spice company McCormack with price discrimination in its sale of spice and seasoning products, according to its website. The law was once referred to as the “Magna Carta of small business” and enforcers routinely used it during the mid-twentieth century.
A 1977 Justice Department report signaled a shift away from enforcing the Robinson-Patman Act based on the antitrust doctrine of consumer welfare, which argues for lax enforcement to maintain low prices.
The investigation of Coke and Pepsi is still in its early stages, according to the sources who spoke to Politico. Coca-Cola is the largest U.S. soft drink company, with a 46% market share, followed by Pepsi’s 26% market share according to Statista.
“The Coca-Cola Company is committed to fair and lawful competition in the marketplace. Any assertion that the Company has done anything unlawful with respect to the sale and distribution of its products is unfounded and we are prepared to defend any specific accusations accordingly,” a spokesperson told the Daily Caller.
Pepsi did not immediately respond to a request for comment. A FTC spokesperson declined to comment.