Coca-Cola Co. and PepsiCo reportedly are under preliminary investigation by the Federal Trade Commission over potential price discrimination in the soft drink market.
The FTC apparently is investigating on the basis of the Robinson-Patman Act, a law that prohibits suppliers from offering lower prices to large retailers than those charged their smaller competitors, according to an exclusive story in Politico. The news medium called it “an obscure law” and “largely dormant 1936 law is aimed at promoting a level playing field between small retailers and large chain stores.”
Citing “four people with knowledge of the probe,” Politico said the FTC has asked large retailers, including Walmart, for data and other information on how they purchase and price soft drinks – although Walmart is not a target in the investigation, one of the informants said.
“The new investigation is the latest sign that the Biden administration is expanding its efforts to rein in big companies and flex its antitrust muscles, and not just in the technology world,” Politico wrote. “Under Lina Khan, the FTC has reached deep into the antitrust playbook, dusting off long quiescent laws in the hopes of curtailing the growth of the world’s biggest firms, from relative newcomers like Apple and Google, and now to more traditional Fortune 500 stalwarts like Pepsi and Coke.”
The report noted the Robinson-Patman Act has not been enforced regularly for decades, the last case being a 2000 settlement with spice company McCormick & Co.
The investigation is in the early stages, Politico reported, while also carrying a denial of any wrongdoing from a Coca-Cola spokesperson.