Alongside the outgoing administration's spate of executive orders and last-minute rulemaking, the Federal Trade Commission (FTC) sued Pepsi on Friday for providing promotional payments to an unnamed big-box retailer. The Commission claims Pepsi's conduct violates the Robinson-Patman Act (RPA), a 1936 law that outlaws price discrimination. Dissenting commissioners Melissa Holyoak and Andrew Ferguson regard the majority's argument as tortured and tendentious.
In a heavily redacted statement, FTC Chair Lina Khan alleges that Pepsi unfairly advantages one large retailer by providing it with promotional allowances and services such as advertising budgets and signage. Khan contends that Pepsi's conduct violates Sections 2(d) and (e) of the RPA, which prohibit the provision of "services or facilities connected with the processing, handling, [or] sale…upon terms not accorded to all purchasers on proportionally equal terms."
In other words, she believes you can violate the RPA by providing advertising billboards for a big-box store but not the local grocer. That is absurd: The cost of both is the same, but the revenue generated by the former is much greater. Furnishing the one and not is not illegal under Sections 2(d) and 2(e), because those sections outlaw proportionally unequal payments and services to retailers, as Holyoak argues in her dissent.
