Trump’s FTC dismisses politically-motivated antitrust case against PepsiCo that was rushed through by Democrats days before his inauguration.
Key Takeaways
- The FTC unanimously voted 3-0 to drop an antitrust lawsuit against PepsiCo that alleged price discrimination favoring Walmart.
- FTC Chairman Andrew Ferguson condemned the case as a “legally dubious partisan stunt” initiated just days before President Trump took office.
- The lawsuit was based on the rarely-enforced Robinson-Patman Act and was filed January 17, just three days before Trump’s inauguration.
- The dismissal represents a significant shift in FTC priorities under Republican leadership, moving away from the aggressive antitrust agenda pursued by former Chair Lina Khan.
- PepsiCo maintained it has always provided fair, non-discriminatory pricing to all customers.
FTC Terminates Last-Minute Democrat Case Against PepsiCo
The Federal Trade Commission has officially dropped its antitrust lawsuit against PepsiCo, ending a case that Republicans say exemplifies the partisan overreach of Biden-era regulators. The suit, which alleged PepsiCo violated the Robinson-Patman Act by offering preferential pricing to retail giant Walmart, was filed on January 17 – just three days before President Trump’s inauguration. The timing of the filing has been harshly criticized by the current Republican-led Commission as a transparent attempt to force the Trump administration into pursuing a weak case based on questionable legal grounds.
“Taxpayer dollars should not be used for legally dubious partisan stunts,” said FTC Chairman Andrew Ferguson.
The unanimous 3-0 decision to dismiss the case reflects the complete transformation of the FTC under President Trump’s leadership. After taking office, Trump moved swiftly to reshape the Commission by removing Democratic Commissioners Alvaro Bedoya and Rebecca Slaughter, who subsequently filed lawsuits challenging their dismissals. Former Chairwoman Lina Khan, who had championed the PepsiCo case, resigned when Trump took office rather than face potential removal.
Legal Weaknesses Exposed in Democrat’s Last-Minute Filing
The FTC lawsuit centered on allegations that PepsiCo offered Walmart significant price advantages not available to competing retailers, potentially forcing consumers to pay higher prices elsewhere. The case revived enforcement of the Robinson-Patman Act, an antitrust law that prohibits price discrimination between different purchasers of similar goods. The law had largely fallen into disuse for decades before Khan’s aggressive revival attempt, raising questions about the sudden enforcement push in the final days of Democratic control.
“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.”
Commissioner Melissa Holyoak, who had originally dissented when the case was filed, emphasized the importance of directing the agency’s resources toward legitimate enforcement actions rather than politically motivated cases with little chance of success. The Commission’s statement indicates the case lacked substantial evidence and was rushed through without proper evaluation of its legal merits.
Corporate Response and Future Direction
Throughout the proceedings, PepsiCo maintained its innocence and expressed satisfaction with the case’s dismissal. The company rejected allegations that it had engaged in discriminatory pricing practices, stating it has always treated all customers fairly. This position was ultimately vindicated by the Commission’s decision to drop what many observers viewed as a politically motivated case that had little chance of success in court.
“[PepsiCo] has always and will continue to provide all customers with fair, competitive, and non-discriminatory pricing, discounts and promotional value,” said PepsiCo.
Former FTC Chair Lina Khan criticized the dismissal, characterizing it as “a gift to giant retailers as they gear up to hike prices.” However, the current Commission leadership has emphasized the need to focus on more substantiated cases that have a strong legal foundation, rather than pursuing questionable actions that waste taxpayer resources and agency time. This approach signals a significant shift away from the activist regulatory agenda that characterized the FTC under Democratic leadership.
“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,” said FTC Commissioner Melissa Holyoak.
