On May 22, 2025, the Federal Trade Commission (FTC or the Commission) voted 3-0 to dismiss without prejudice the Robinson-Patman Act (RPA)1 case it initiated on January 17, 2025 against PepsiCo, Inc. (Pepsi) in the U.S. District Court for the Southern District of New York. The FTC's dismissal of its case against Pepsi — first filed just weeks after the FTC filed its first RPA case in over 20 years against Southern Glazer's Wine and Spirits, LLC (Southern Glazer's) — raises questions about the scope and direction of the FTC's renewed RPA enforcement. For industries that use tiered pricing and volume-based discounts, the FTC's dismissal of its case against Pepsi may potentially signal lower government enforcement risk, but it does not signal abandonment of government enforcement, as the FTC's RPA case against Southern Glazer's remains active. Private RPA enforcement remains a risk regardless of government enforcement priorities, and private RPA litigation against Pepsi relating to packaged snacks remains pending.2 But we believe it would be a mistake to see dismissal of the Pepsi RPA case as a retreat from the FTC's broader endeavor to revitalize RPA enforcement, and risks of government enforcement remain.
Background
Historically, the FTC actively enforced the RPA, a New Deal-era
statute, designed to prevent price discrimination that favors large
buyers at the expense of smaller competitors. Passed in 1936 as an
amendment to the Clayton Act, the RPA was fueled by a concern that
powerful suppliers were offering favorable pricing to large retail
chains, undermining small businesses' ability to compete.
Policymakers at the time feared that such practices would lead to
market concentration and threaten core American values of economic
opportunity and fairness. From the mid-20th century through the
1970s, the FTC pursued a steady stream of RPA cases, reflecting a
clear commitment to maintaining competitive parity in retail
markets. However, Chicago School enforcement stalled in the 1980s,
with only one RPA case brought by the FTC during the Clinton
administration — until its revival in the waning days of the
Biden administration. This shift was driven by evolving economic
thinking that questioned the policy underlying the RPA and a focus
on the welfare of small retailers rather than low prices that
benefit consumers. The Neo-Brandeisian rejection of a focus on low
prices led the Biden FTC to bring the first RPA case in decades
against Southern Glazer's in 2024, soon followed by the action
against Pepsi. These cases were seen as a significant policy
reversal, indicating the FTC's intent to reinvigorate the RPA
as a means to address perceived inequities in buyer-supplier
relationships and to promote "fairer" competition,
especially for smaller businesses.
The cases against Southern Glazer's and Pepsi, however, did
not come as a complete surprise. There had been ongoing speculation
for some time that the FTC was planning a revival of RPA
enforcement. In July 2021, for example, President Joe Biden issued
an executive order directing the FTC to scrutinize the food
industry through the lens of the RPA.3 In June 2022, the
FTC announced in a policy statement that it intended to use the RPA
to combat allegedly improper rebates and fees from drug
manufacturers to pharmacy benefit managers.4 In April
2024, it was reported that then-FTC Commissioner Alvaro Bedoya
noted he wished to take the RPA "car out of the
garage."5
What the RPA Prohibits
The RPA generally prohibits sellers of goods from charging different prices to purchasers of those goods who compete with each other. A violation arises when a seller offers materially identical products to different competing buyers at different prices at approximately the same time and the pricing disparity results in competitive harm — with a presumption that discrimination causes competitive harm.6 Discriminatory practices in promotional allowances may also constitute a violation. Furthermore, a buyer can also be liable along with the seller if the buyer knowingly induces and receives discriminatory pricing or promotional allowances.7 However, the RPA does not act as an absolute prohibition on differential pricing of goods. A price difference does not violate the RPA if it is justified by differences in cost incurred by the seller, or if the lower price was offered to meet a competing seller's price.8
The FTC's RPA Case Against Southern Glazer's
The FTC revived RPA enforcement in December 2024 when it
announced its case against Southern Glazer's, the largest wine
and spirits distributor in the United States.9 This
marked the Commission's first RPA case since 2000.
The complaint alleges that Southern Glazer's repeatedly
discriminated in price between disfavored independent purchasers
and favored large chain purchasers of wine and spirits in violation
of section 2(a) of the RPA. The FTC alleges that Southern
Glazer's discriminatory prices to favored chain customers are
effectuated through a variety of mechanisms, including through
large, high-volume quantity discounts and scan rebates. The FTC
further alleges that Southern Glazer's discriminatory prices to
favored chain customers involve substantial price differences
between competing customers, disguising discounts with
post-delivery, off-invoice discounts, delayed price increases for
favored retailers and retroactive price reductions on inventory
already held by favored large chain customers, channel and special
pricing for favored chain retailers, and sensitive internal
documents describing protecting large customers' pricing.
The Commission voted to file the lawsuit against Southern
Glazer's in a 3-2 party-line vote, with Republican
then-Commissioner Andrew Ferguson and Republican Commissioner
Melissa Holyoak dissenting on the grounds that the suit was
unlikely to succeed and would be a suboptimal use of the FTC's
resources even if successful.10 Notably, Commissioner
and now FTC Chair Ferguson claimed in a dissenting statement that
the "mammoth case" would likely fail to clear legal
hurdles and would represent an unnecessary drain on
resources.11 He further argued that Southern
Glazer's did not possess the market power of the "large
independent department stores or chain operations that animated
Congress to pass the Act in 1936."12 Commissioner
Holyoak dissented even more vigorously and said the case targets
"innocuous" conduct and would increase
prices.13 She emphasized in her dissenting statement
that the FTC had failed to show competitive harm in the form of
higher prices or reduced output, and rejected the idea that simply
showing pricing differences was sufficient to prove an RPA
violation. Despite dissenting, Chair Ferguson and Commissioner
Holyoak acknowledged that the FTC is obligated to enforce the RPA
as long as it has not been repealed, particularly where enforcement
is consistent with the broader goals of the antitrust laws. By
voicing support for RPA enforcement, they signaled a clear
departure from the long-standing view that the government should
avoid enforcing the statute.
The FTC's RPA Case Against Pepsi
The FTC reaffirmed its renewed commitment to RPA enforcement in
January 2025 when it sued Pepsi for alleged RPA
violations.14 In its complaint, the FTC accuses Pepsi of
providing a large, big box retailer with favorable terms and
promotional payments not offered to other retailers, while charging
higher prices to competing retailers and customers in violation of
sections 2(d) and 2(e) of the RPA. Notably, the complaint against
Pepsi is based on different RPA provisions than the case against
Southern Glazer's. The FTC accuses Pepsi of violating sections
2(d) and 2(e), which prohibit price discrimination in the form of
advertising and promotional allowances favoring large customers
over smaller ones. Unlike section 2(a), sections 2(d) and 2(e) are
per se violations and do not require evidence of competitive harm
to prove an RPA violation. This eliminates a significant obstacle
for enforcers and private plaintiffs.
Just as in FTC v. Southern Glazer's Wine and Spirits,
LLC, the Commission voted to file the lawsuit against Pepsi in
a 3-2 party-line vote, with newly appointed Chair Ferguson and
Commissioner Holyoak dissenting in strongly worded statements
denouncing the then-Democratic majority's flurry of actions
taken only a few days before President Donald Trump's
inauguration.
Commissioner Holyoak called the FTC's suit against Pepsi
"the worst case [she has] seen in [her] time at the
Commission."15 She emphasized what she considers
the complaint's lack of evidence, its failure to meet any of
the elements of RPA sections 2(d) and 2(e), and the
then-Majority's attempts to "disguise" a theory of
harm that should be evaluated under section 2(a) of the RPA as
unlawful allowances and services under sections 2(d) and 2(e),
intentionally sidestepping 2(a)'s requirement that plaintiffs
show competitive harm. She argued that even if such discounts could
be categorized as promotional payments, they cannot fall within
sections 2(d)'s and 2(e)'s scope because they are not made
in connection with the resale of Pepsi's products by the
retailer. Instead, she argued that such discounts are meant to
ensure that original sales from Pepsi to the retailer continue,
rather than facilitate the retailer's resale of Pepsi products.
This would remove Pepsi's conduct from the RPA's
reach.16
Chair Ferguson largely echoed Commissioner Holyoak's
dissenting statement, but also emphasized the alleged political
nature of the "Democratic majority's" revival of the
RPA without regard to the law or the facts gathered during the
Pepsi investigation.17 He called the complaint
"deficient on its face" and argued that the FTC had no
evidence of the disparate treatment required to prove an RPA
violation and reaffirmed that he is willing to enforce the RPA
where, unlike here, the Commission has solid
evidence.18
FTC Statements in Support of Dismissing the Case Against Pepsi
Chair Ferguson's and Commissioner Holyoak's joint statement in support of dismissing the case against Pepsi reiterates the criticisms outlined in their earlier dissents, emphasizing concerns about the action's alleged political origins and lack of substantive legal and evidentiary support.19 Commissioner Mark Meador concurred with the decision to dismiss the case and his statement aligns with Chair Ferguson's and Commissioner Holyoak's in condemning the case as politically motivated and in applauding efforts to "revive RPA enforcement."20 Their statements collectively underscore a commitment to principled enforcement of antitrust laws, generally, and the RPA specifically, cautioning against cases perceived as politically motivated or lacking in evidentiary support.
What Happens Next?
The FTC's unanimous dismissal of its RPA case against Pepsi
— and the sharp criticism from all three sitting
commissioners — casts doubt on the Commission's near-term
appetite for aggressive RPA enforcement, at least under its current
leadership. The continuation of the FTC's case against Southern
Glazer's underscores that the FTC may still pursue RPA
enforcement in certain circumstances, particularly where it
believes there is clear evidence of harm to competition and
consumers. The clear message from the Commission is that any future
enforcement must be grounded in rigorous legal and economic
analysis, free from perceived political motivations.
Companies operating in industries characterized by significant
wholesale pricing disparities between large and small retailers
should closely monitor the developments in the FTC's case
against Southern Glazer's: the political winds at the FTC can
shift, state attorneys general may still pursue RPA-like claims
under state laws, and private plaintiffs can and do sue under the
statute. In addition to monitoring these developments, such
companies should continue to review pricing practices and policies,
document justifications such as "meeting competition" or
cost to serve where such pricing differences exist, educate teams
about the risks of discriminatory pricing and the conditions under
which differences are lawful, and review their promotional
allowances, and other non-pricing terms.
Footnotes
1. 15 U.S.C. § 13.
2. See Alqosh Enterprises, Inc. and NMRM, Inc. v. PepsiCo, Inc. and Frito-Lay North America, Inc., 2:25-cv-1327 (C.D. Cal). On February 17, 2025, private plaintiffs filed their first RPA case against Pepsi since the FTC announced its RPA case against Pepsi in January 2025. On April 21, 2025, plaintiffs filed their first amended complaint. While the theory here is like the FTC's case, plaintiffs, independently owned convenience stores, accuse Pepsi and its subsidiary Frito-Lay of engaging in price discrimination and promotional payments, allowances, and services in the resale of their snack chips to favored big box retailers in violation of sections 2(a) and 2(d) of the RPA and of California's Unfair Practices Act and Unfair Competition Law.
3. The White House, Executive Order on Promoting Competition in the American Economy (July 9, 2021).
5. See Law360, FTC's Bedoya Looking For Market Power In Pricing Cases (April 11, 2024).
6. 15 U.S.C. §13(a); FTC v. Morton Salt Co., 334 U.S. 37, 50-51 (1948) (harm to competition presumed from lengthy, substantial price discrimination between competitors).
7. 15 U.S.C. §§13 (c)-(e).
8. 15 U.S.C. §13(a).
9. See Press Release, Fed. Trade. Comm'n, FTC Sues Southern Glazer's for Illegal Price Discrimination (December 12, 2024); FTC v. Southern Glazer's Wine and Spirits, LLC, 8:24-cv-02684 (C.D. Cal.).
10. Notably, on March 13, 2025, the FTC under the new administration opposed dismissal of the case. Later, on April 17, 2025, the U.S. District Court for the Central District of California denied Southern Glazer's motion to dismiss the case. Generally, the court in its written order held that the FTC sufficiently alleged each element of a secondary-line RPA discrimination claim against Southern Glazer's.
12. Id.
14. See Press Release, Fed. Trade. Comm'n, FTC Sues PepsiCo for Rigging Soft Drink Competition (January 17, 2025); FTC v. PepsiCo, Inc., 1:25-mc-00033 (S.D.N.Y).
16. Id.
18. Id.
20. In the Matter of Non-Alcoholic Beverages Price Discrimination Investigation Matter Number 2210158.
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