Trump’s FTC shuts down Biden-Harris era lawsuit against PepsiCo, calling it a “legally dubious partisan stunt” filed just days before Trump took office.
Key Takeaways
- The Federal Trade Commission unanimously dismissed price-fixing charges against PepsiCo that alleged the company gave preferential pricing to Walmart at the expense of smaller vendors.
- FTC Chairman Andrew Ferguson condemned the case as a rushed political move initiated just three days before President Trump’s inauguration.
- The lawsuit was based on the Robinson-Patman Act, antitrust legislation that hadn’t been actively enforced for decades.
- PepsiCo maintained it has always provided fair, non-discriminatory pricing to all customers.
- The dismissal represents a significant shift in FTC priorities under Republican leadership, focusing resources on cases with stronger legal merit.
Last-Minute Biden-Harris FTC Lawsuit Scrapped
The Federal Trade Commission has unanimously voted to dismiss its lawsuit against PepsiCo that alleged price discrimination favoring retail giant Walmart. The case, which was filed on January 17 in New York, just days before President Trump took office, accused the beverage company of violating the Robinson-Patman Act by offering Walmart better prices and promotional terms than those available to smaller retailers. The dismissal comes after a complete leadership change at the FTC, where Republican commissioners now hold control following President Trump’s dismissal of Democratic commissioners appointed during the previous administration.
“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.” stated by Federal Trade Commission
Enforcement of Dormant Antitrust Law Halted
The now-dismissed lawsuit represented an attempt by the previous administration to revive enforcement of the Robinson-Patman Act, a depression-era antitrust law that prohibits suppliers from offering different prices to different retailers unless the price differential is justified by cost savings. Despite being on the books for decades, the law had rarely been enforced in recent years. The Democratic-led FTC under former Chairwoman Lina Khan had made enforcement of this law a priority, claiming that preferential pricing for large retailers like Walmart ultimately harmed consumers through reduced competition and higher prices.
“a gift to giant retailers as they gear up to hike prices” said by Lina Khan, Former FTC Chairwoman
The company strongly denied the allegations throughout the proceedings. In response to the dismissal, PepsiCo reaffirmed that it “has always and will continue to provide all customers with fair, competitive, and non-discriminatory pricing, discounts and promotional value.” PepsiCo The company had maintained that its pricing structures were justifiable and did not unfairly discriminate against smaller retailers as alleged in the lawsuit.
FTC Leadership Prioritizes Strong Legal Cases
The unanimous 3-0 vote to dismiss the case reflects the new direction of the FTC under Republican leadership. Commissioner Melissa Holyoak emphasized that the agency needs to focus its resources on cases with stronger legal foundations. The dismissal signals a return to more traditional interpretations of antitrust law rather than the aggressive enforcement strategy pursued under the previous administration. This shift aligns with President Trump’s broader agenda to reduce regulatory burdens on American businesses while still maintaining fair competitive practices.
“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 by FTC Commissioner Melissa Holyoak
The dismissal follows President Trump’s broader efforts to reshape federal agencies since taking office. After his inauguration, Khan resigned her position, and Trump subsequently removed Democratic Commissioners Alvaro Bedoya and Rebecca Kelly Slaughter. These dismissed commissioners have since filed lawsuits challenging their removal, adding another layer of contention to the changing regulatory landscape. The FTC’s new leadership appears committed to pursuing cases they believe have substantial legal merit rather than those perceived as ideologically motivated.
