Lina Khan Calls Republican FTC's Decision to Drop PepsiCo Suit 'Disturbing Behavior'

The U.S. Federal Trade Commission on Thursday dismissed a price discrimination lawsuit against the drink and food giant PepsiCo, a move that former FTC Chair Lina Khan, who served under former President Joe Biden, called "disturbing behavior."

The lawsuit, filed only a few days before U.S. President Donald Trump returned to the White House, accused PepsiCo of providing a big box retailer customer, Walmart, with pricing advantages, while increasing prices for competing customers and retailers.

"This lawsuit would've protected families from paying higher prices at the grocery store and stopped conduct that squeezes small businesses and communities across America," Khan wrote on X on Thursday. "Dismissing it is a gift to giant retailers as they gear up to hike prices."

The three members of the FTC, all Republicans, voted 3-0 to drop the suit. Current FTC Chair Andrew Ferguson, who was named chairman by Trump, cast the lawsuit as a "nakedly political effort to commit this administration to pursuing little more than a hunch that Pepsi had violated the law." He also said that the FTC under Biden "rushed to authorize the case." Ferguson also opposed the lawsuit when the FTC first voted to pursue it.

Antimonopoly groups were quick to criticize Thursday's move.

"This meritless dismissal is a win for monopolists and billionaires," said Lee Hepner, senior legal counsel at the American Economic Liberties Project, in a statement on Thursday. "Adding insult to injury, the agency dropped the case just one day before the parties were due to justify extensive redactions in the complaint, denying the public the ability to review the facts and judge the merits for themselves. This is a corporate pardon for Walmart and PepsiCo."

Open Markets legal director Sandeep Vaheesan said the move illustrates that despite their rhetoric, the current FTC commissioners are "not willing to faithfully apply the law enacted by Congress."

Stacy Mitchell, co-director at the Institute for Local Self-Reliance, which is an advocate for independent businesses, called it "effectively an endorsement of the predatory tactics Walmart uses to crush local grocery sores, create food deserts, and drive up prices."

The agency had sued PepsiCo under the Robinson-Patman Act, a 1936 law intended to prevent price discrimination but has been little used in recent decades.

The announcement of the dropped lawsuit came the same day it was reported that the FTC is investigating the progressive watchdog group Media Matters for America over potential coordination with other groups, including the Global Alliance for Responsible Media, which was a World Federation of Advertiser initiative. Media Matters president Angelo Carusone confirmed in a statement to Axios that the investigation is over claims Media Matters and other groups coordinated advertising boycotts of the social media site X.

X's owner, billionaire Elon Musk, who has played a core role in the Trump administration, has ongoing lawsuits against both the World Federation of Advertisers and Media Matters.