Washington, D.C. — Following news that the Federal Trade Commission (FTC) has filed a lawsuit against PepsiCo for violating the Robinson-Patman Act (RPA) by granting discriminatory pricing and promotional advantages to a “large, big-box retailer” the American Economic Liberties Project released the following statement.

“Congress passed the Robinson-Patman Act a near century ago to prevent conglomerates like PepsiCo and their favored big box retailers from muscling smaller businesses out of the market,” said Lee Hepner, Senior Legal Counsel at the American Economic Liberties Project. “By giving big box chain stores unfair deals while denying the same to smaller competitors, PepsiCo has allegedly tilted the playing field and driven up prices for American consumers—exactly the behavior this law was designed to stop. There is nothing extraordinary about enforcing laws passed by Congress, but refusing to enforce the law amounts to repeal by administrative neglect. Consumers, small businesses and Main Street corridors across the country have suffered from that neglect and have every reason to celebrate the FTC’s commitment to reviving the RPA.”

“Contrary to the opinion set forth in the dissent, there is nothing unusual or unprecedented about the FTC continuing to get the job done while the country awaits the incoming administration,” added Hepner. “It is remarkable to think that the FTC in particular, which was created with the structure and purpose of exercising independent expertise over issues related to unfair competition, should simply stop working for purely political reasons.”

The FTC’s complaint against PepsiCo has yet to be made public, pending a motion to the District Court for the Southern District of New York, Case No. 1:25-mc-00033. According to the FTC’s press release, the complaint alleges that PepsiCo granted substantial promotional payments, allowances, and advertising tools to one of its largest big-box customers while denying similar benefits to competing businesses, including independent grocery stores and local convenience retailers. The lawsuit alleges violations of sections 2(d) and 2(e) of the Robinson-Patman Act, which prohibit sellers from favoring specific buyers through advertising and promotional allowances that are not equally available to others. The complaint marks the FTC’s second enforcement action under the RPA in as many months. In December 2024, the FTC filed a complaint against Southern Glazers, the country’s largest distributor of wine and spirits, for illegal price discrimination under the RPA.

Originally called the Wholesale Grocer’s Protection Act, the Robinson-Patman Act was passed in 1936 to protect smaller grocers from the increasingly dominant chain store A&P. Indeed, the Robinson-Patman Act was, per the Supreme Court in 1960, designed to “to curb and prohibit all devices by which large buyers gained discriminatory preferences over smaller ones by virtue of their greater purchasing power.” Yet this is exactly what we see today.

Although the Robinson-Patman Act was passed by Congress in 1936 and was never repealed, it has not been enforced for nearly 40 years. The Department of Justice and the Federal Trade Commission ceased enforcing the Robinson-Patman Act in the 1970s claiming, without any real evidence, that the law harmed consumers. As a result, small businesses are now paying wholesale prices that are higher than the retail prices offered by power buyers like Amazon and Walmart, in flagrant violation of the law and without recourse, pushing them out of the marketplace and harming small businesses and entrepreneurs.

Learn more about the Robinson-Patman Act through our fact sheet. 

Read our full 2022 report on the Robinson-Patman Act here.

Learn more about Economic Liberties here.

###

The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.