The Federal Trade Commission’s decision to drop a case against PepsiCo exposes how the Biden-Harris administration rushed a partisan lawsuit just days before President Trump’s inauguration.
Key Takeaways
- The FTC unanimously dismissed a price discrimination lawsuit against PepsiCo that alleged unfair pricing practices favoring Walmart.
- FTC Chairman Andrew Ferguson called the lawsuit a “legally dubious partisan stunt” that was rushed through just three days before Trump took office.
- The case attempted to resurrect enforcement of the Robinson-Patman Act, which had been dormant for decades.
- The dismissal represents a significant shift in FTC priorities under Republican leadership, focusing resources on more substantive consumer protection issues.
- PepsiCo maintained it has always provided fair, competitive pricing to all customers.
Partisan Tactics Exposed as FTC Dismisses PepsiCo Case
In a definitive rebuke to Biden-era regulatory overreach, the Federal Trade Commission has unanimously voted to dismiss its lawsuit against PepsiCo that alleged the beverage giant engaged in unfair pricing practices favoring Walmart over smaller retailers. The case, filed on January 17 just days before President Trump’s inauguration, had been championed by former FTC Chairwoman Lina Khan and other Democratic commissioners as an effort to resurrect enforcement of the long-dormant Robinson-Patman Act, which prohibits certain forms of price discrimination.
“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.” said by Federal Trade Commission
Republican Leadership Shifts FTC Focus
The dismissal comes after significant changes in FTC leadership following President Trump’s return to office. Trump quickly fired Democratic Commissioners Alvaro Bedoya and Rebecca Kelly Slaughter, who have since sued the administration over their termination. Khan resigned her position, allowing Republican Commissioner Andrew Ferguson to take the helm as Chairman. The Commission, now with a clear Republican majority, has wasted no time reorienting the agency’s priorities away from what they viewed as politically motivated cases.
“Taxpayer dollars should not be used for legally dubious partisan stunts.” stated by FTC Chairman Andrew Ferguson
Ferguson and Commissioner Melissa Holyoak had both dissented when the lawsuit was initially filed, arguing it lacked substantial evidence and legal merit. The lawsuit had alleged that PepsiCo’s pricing practices gave Walmart unfair advantages through selective discounts and promotional support not offered to other retailers, potentially leading to higher consumer prices at competing stores. Critics saw the case as part of a broader Biden administration agenda to expand federal regulatory power over American businesses.
PepsiCo Maintains Innocence While Democrats Criticize Dismissal
Throughout the legal proceedings, PepsiCo firmly denied any wrongdoing, maintaining that its pricing policies have always been fair and non-discriminatory. In response to the case dismissal, the company reiterated its position that it “has always and will continue to provide all customers with fair, competitive, and non-discriminatory pricing, discounts and promotional value.” Stated By Pepsico
Former FTC Chair Lina Khan criticized the dismissal, characterizing it as “a gift to giant retailers as they gear up to hike prices.” said by Khan. Her comments reflect the ongoing partisan divide over the proper role of government regulation in business practices, with Democrats generally favoring more aggressive intervention and Republicans advocating for market-based solutions and restrained regulatory authority.
A New Direction for Consumer Protection
The unanimous 3-0 vote to dismiss the case signals a clear change in direction for the FTC under Trump’s administration. Commissioner Melissa Holyoak emphasized the importance of focusing agency resources on cases with stronger legal foundations, rather than pursuing ideologically driven agendas. The move aligns with President Trump’s broader efforts to reduce regulatory burdens on American businesses and promote economic growth through decreased government intervention in the marketplace.
“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 case dismissal represents one of the most visible examples yet of how the Trump administration is systematically dismantling regulatory initiatives launched during the Biden years. For conservatives who have long criticized the expansion of the administrative state, the FTC’s decision stands as a welcome return to more limited government oversight and respect for free market principles in American business regulation.
