FTC Drops PepsiCo Price Discrimination Case, Sparks Debate Over Big Retail Favoritism

The U.S. Federal Trade Commission (FTC) has officially dropped its lawsuit accusing PepsiCo (NASDAQ:PEP) of violating the Robinson-Patman Act by giving Walmart (NYSE:WMT) favorable pricing, a move that has reignited debate over corporate favoritism and regulatory priorities.

Filed in January in New York, just before President Donald Trump took office, the FTC’s case alleged that PepsiCo’s pricing practices disadvantaged other retailers—including grocery chains and convenience stores—by offering Walmart better deals. The rarely used Robinson-Patman Act prohibits anticompetitive price discrimination that harms market competition.

FTC Chairman Andrew Ferguson criticized former Chair Lina Khan for initiating what he called a “legally dubious partisan stunt,” saying taxpayer funds shouldn't support such efforts. Ferguson's remarks underscore a broader shift in enforcement priorities under the current administration.

PepsiCo strongly denied the allegations, stating that the company “has always and will continue to provide all customers with fair, competitive, and non-discriminatory pricing, discounts and promotional value.” Walmart has not commented publicly on the matter.

Lina Khan, now a former FTC chair, responded on social media, calling the case’s dismissal “a gift to giant retailers as they gear up to hike prices,” suggesting the move could undermine fair pricing and consumer protection.

The case’s closure marks another rollback of initiatives started during Khan’s tenure, as the FTC reorients under Ferguson’s leadership. It also highlights the ongoing tension between regulatory crackdowns on corporate practices and market-driven pricing strategies involving retail giants like Walmart.

This development raises questions about how federal regulators will handle similar pricing disputes in the future, especially as inflation concerns and retail consolidation continue to dominate economic headlines.