Illegal Soda: Coca-Cola and PepsiCo Facing FTC Violations

by Staff
coca-cola facing ftc violations

Recently, the Federal Trade Commission (FTC) has been investigating the pricing strategies of two of the largest U.S. soda companies, Coca-Cola and PepsiCo. Both companies are facing scrutiny over potential violations of the Robinson-Patman Act, an antitrust law that bars manufacturers from pricing strategies that undermine competition, especially small competitors. Coke represents 46 percent of U.S. soda sales volume, while PepsiCo represents 26 percent.

Currently, both Coca-Cola and PepsiCo strictly reject any misconduct.

Chairwoman Lina Khan has made it clear that the FTC will pursue these companies if they are found to be involved in any wrongdoing. The FTC has begun a preliminary investigation into the matter and may use this law, passed in 1936, as part of its efforts to regulate pricing strategies between competitors. The FTC believes regulating these practices can create a fairer market for small businesses and keep prices low for consumers.

Over the last couple of decades, the FTC hasn’t enforced the Robinson-Patman Act to its full extent, as the organization had previously shifted its focus more to harm-to-consumer efforts. In 2023 particularly, the FTC has been more vocal about coming down on antitrust issues.

Many businesses, including Barclays, are also facing scrutiny over their submission to Euribor rate-setting processes and possible market manipulation. The Financial Services Authority (FSA) is conducting investigations with its regulatory counterparts in other countries to determine if misconduct relating to setting rates occurred.

FTC Commissioner Chairman Joe Simons said that this investigation would help restore the FTC’s skills in this area and find a good test case. He also stated it is important to prevent practices that harm consumers and boost small businesses. 

Politico reported that Walmart had sought data from both companies on how large retailers purchase their products, fueling speculation that antitrust investigations were launched. In addition to expanding its antitrust agencies, the government is pursuing antitrust actions against some of the world’s most powerful tech companies, such as FAANG (Facebook Inc., Apple Inc., Amazon Inc., Netflix Inc., and Google Inc.). The regulators have expressed concerns about potential price discrimination in soft drinks by Coca-Cola and PepsiCo to maintain their dominant positions in the market.

About the Author/s

The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.

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3 comments

Andrew c January 25, 2023 - 3:32 pm

Coke and Pepsi are not competitors
See: Black Rock, Vanguard

Reply
Chris Vasquez January 27, 2023 - 6:17 am

What is considered “wrong doing”?

Reply
Randomthoughts January 27, 2023 - 8:21 am

the states have the worst pres vp comb, but yes worry about fizzy pop makers which have raised or set pricing due to the pres inability to handle inflation and can no longer blame the predecessor to hide, so step in a sector of the amerika govt to make worry if you’re paying as fizzy drink maker pleases but not into the fact mismanagement of the country has risen prices all over .. great puff piece lol

Reply

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