Pepsi and Walmart's Monopolization Machine Revealed

Last edited Mon Dec 15, 2025, 09:39 PM - Edit history (1)

Today on TAP: An unsealed lawsuit that Trump’s FTC tried to bury puts the pricing schemes of business on full display.

https://prospect.org/2025/12/15/pepsi-walmarts-monopolization-machine-revealed/



Before Lina Khan exited the Federal Trade Commission, the agency sued Pepsi for violating the Robinson-Patman Act, which bars suppliers from price discrimination, i.e., charging retailers different wholesale prices for their goods. That was about the extent of what we knew: The lawsuit was heavily redacted, as is customary in government cases against business. Typically, the two sides will argue about what the public can see and what constitutes proprietary business information, and a judge decides what to release.

In this case, Khan’s replacement at the FTC, Andrew Ferguson, sided with Pepsi lobbyists and dropped the case right before it could be unsealed. Ferguson and his Republican colleagues then demeaned Khan’s efforts, claiming that the lawsuit was “purely political” with “no evidence,” and an “insult to the Commission’s credibility.” This was easy to say when the case that could serve as a rebuttal was primarily blacked-out lines on a page. If it ever became public, the name-calling might look foolish.

Funny story: The Institute for Local Self-Reliance just got the case unsealed. We now know what Khan had on Pepsi. And yes, Andrew Ferguson looks foolish. Here is the lawsuit, now with minimal redactions. It shows that Pepsi was diligently working to create a “price gap” between retail giant Walmart and its competitors. Robinson-Patman Act opponents often claim that enforcing the law simply denies consumers discounts at big-box, low-cost retailers. But the lawsuit shows how this went in both directions.

For years, Pepsi monitored the market on Walmart’s behalf, and when it would see other retailers dropping prices, it would respond to maintain the price gap. Sometimes this translated into additional allowances or special in-store promotions for Walmart, but sometimes it meant reducing or eliminating promotional payments for competitors and increasing their wholesale prices. “In other words, to enforce Walmart’s price gap, Pepsi at times seeks to drive up retail prices for Pepsi soft drinks sold by Walmart’s rivals,” the lawsuit states.

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