The U.S. Federal Trade Commission (FTC) has opened a preliminary investigation into The Coca-Cola Company and PepsiCo probing potential price discrimination within the soft drink market, according to media reports.
First reported today by Politico, which cited four sources granted anonymity due to the confidential nature of the investigation, the agency is reviving the Robinson-Patman Act, a dormant antitrust law that prohibits companies from offering lower prices to larger retailers while charging smaller retailers more for commodities of “like grade and quality.”
According to the report, the investigation is still in the early stages and the FTC has reached out to several major retail chains, including Walmart, “seeking data and other information on how they purchase and price soft drinks.” Walmart is not believed to be a target in the investigation.
“The Coca-Cola Company is committed to fair and lawful competition in the marketplace,” the company said in a statement to Politico. “Any assertion that the Company has done anything unlawful with respect to the sale and distribution of its products is unfounded and we are prepared to defend any specific accusations accordingly.”
Signed into law in 1936, the Robinson-Patman Act had been “all but abandoned” for more than 20 years – the last time the FTC enforced the law was in 2000 when it reached a settlement with spice company McCormick for price discrimination violations.
Politico noted that the agency’s revival of the law reflects increased antitrust action under the Biden administration. FTC commissioner Alvaro Bedoya has previously criticized a lack of enforcement of the Robinson-Patman Act, arguing that “big retailers can use economies of scale to keep their prices down and undercut smaller operations,” according to the report. However, critics of the law suggest it could lead to higher prices for consumers.