Coca-Cola and PepsiCo under FTC radar over price discrimination

Coca-Cola and PepsiCo under FTC radar over price discrimination

The FTC used to probe companies under the Robinson-Patman Act regularly, but it was abandoned more than 20 years ago.

The US Federal Trade Commission (FTC) has launched a probe against beverage giants Coca-Cola and PepsiCo over alleged price discrimination in the markets, Politico reported quoting sources.

Both companies are being scrutinised under a 1936 law known as the Robinson-Patman Act, which has not been used for two decades.

Under this law, suppliers are barred from offering better prices to large retailers at the expense of their smaller competitors. The rule seeks to provide a level playing field between small retailers and large chain stores.

The authorities last month asked large retailers like Walmart to provide information on their purchases from the suppliers and the price they charge customers on soft drinks, Politico reported, adding that the retail giant was not the subject of the investigation.

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Sources told the US media outlet that the probe is in the early stages and hence did not reveal further information due to its confidential nature.

The FTC used to probe companies under the Robinson-Patman Act regularly, but it was abandoned more than 20 years ago.

The most recent case the FTC took up was a settlement with spice company McCormick.

Prior to that in 1988, the regulator went against book publishers including Simon & Schuster and Random House.

The decision to move away from the Robinson-Patman Act came after the FTC and Justice Department started focusing on harm to consumers, namely higher prices, rather than harm to competitors.

The latest action comes as the Biden administration has been looking to rein in big companies with anti-trust charges.

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