Coke and Pepsi targeted by FTC in price discrimination inquiry: Report
Zachary Halaschak
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Soft drink giants Coca-Cola and PepsiCo are reportedly facing a preliminary investigation by the Federal Trade Commission into whether they violated a law regulating pricing strategies.
The FTC, which has taken a much more aggressive stance toward big businesses under Chairwoman Lina Khan, is probing whether the two companies violated a law that bans suppliers from offering price cuts to major retailers such as Walmart and not offering the same to smaller competitors, Politico reported on Tuesday.
As part of its investigation, the FTC has contacted Walmart and other major retailers to ask about the purchasing and pricing of soft drinks.
The law that prohibits such action is the Robinson-Patman Act, which hasn’t been used by the FTC to pursue companies in some two decades, with the last case under the law being settled with McCormick in 2000.
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Coca-Cola and PepsiCo command a combined 72% share of the soda market. Khan, an antitrust crusader, has made an effort to crack down on anti-competitive practices since being sworn into office, especially among Big Tech companies.
Prior to the preliminary investigation, Khan had called upon the FTC to use the Robinson-Patman Act in order to order curb anti-competitive practices.
The FTC under Khan, a thought leader in what is known as the “hipster antitrust” movement, has not shied away from using its authority to try to rein in corporate power.
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Last year, the FTC attempted to block Meta’s acquisition of a virtual reality developer, with Khan moving to block the merger despite staff recommending against it. The FTC also filed a lawsuit against Microsoft to block it from acquiring Activision Blizzard.
The Washington Examiner has reached out to both Coca-Cola and PepsiCo for comment on the report.