FTC Retreat From PepsiCo Suit Signals Trump-Era Antitrust Reset

When President Donald Trump returned to the White House, some observers predicted that his Department of Justice and Federal Trade Commission would largely continue the aggressive antitrust posture of the Biden administration.

Both administrations expressed caution about concentrated corporate power. But early actions suggest the current enforcement approach will prioritize economic rigor and evidentiary thresholds rather than aggressive theories of market dominance.

The clearest example so far is the FTC’s May 22 dismissal of a price discrimination case against PepsiCo Inc. Filed just three days before former President Joe Biden left office, the case was brought under the Robinson-Patman Act, an 80-year-old statute that prohibits certain forms of price discrimination that harm competition. The Act has seen limited use in modern antitrust enforcement due to its complexity and the high legal and evidentiary burden required to prove competitive harm.

According to the FTC, PepsiCo gave Walmart Inc. an artificial pricing edge over competitors because the soft drink giant offered advertising and promotional advantages, such as point-of-purchase displays and other marketing allowances, not extended to smaller retailers.

Critics pointed out the FTC hadn’t demonstrated how these pricing practices caused measurable harm to competition. There was no direct evidence, for instance, that retail prices increased overall or that rivals were foreclosed from the market.

Rather, the legal theory relied on older US Supreme Court interpretations of the Robinson-Patman Act, which create a presumption of certain harms from unequal pricing, even without contemporaneous evidence of anticompetitive effect.

As Justice Ruth Bader Ginsburg articulated in the majority opinion of Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc., the Act should be construed consistent with broader antitrust policies. Competitive injury is of concern, but the Act doesn’t require sellers to ensure profit parity among all dealers. As Ginsburg stated, “The Act does not bar sellers from negotiating prices with buyers, nor does it compel them to offer the same prices to all comers.”

Upon dismissal of the case, FTC Chair Andrew Ferguson called it “a nakedly political effort” that lacked a solid factual foundation. “Taxpayer dollars should not be used for legally dubious partisan stunts,” he said. The three-member FTC, now comprised entirely of Republicans, voted unanimously to withdraw the lawsuit.

Former FTC Chair Lina Khan sharply criticized the move, calling the dismissal “disturbing behavior,” arguing the suit was intended to protect families from paying higher prices at the grocery store, and that “dismissing it is a gift to giant retailers as they gear up to hike prices.”

Her defense of the case underscores a fundamental philosophical divide. While Khan and Biden’s antitrust team often treated high market share or asymmetrical pricing as proxies for anticompetitive conduct, the current leadership is emphasizing the need for real evidence of a demonstrable link between market behavior and actual harm to consumer welfare.

This emerging difference in approach to antitrust is also visible in the Biden DOJ’s litigation against Visa Inc.

Similar to the PepsiCo case, immediately before the presidential inauguration, the Biden DOJ asked the US District Court for the Southern District of New York to deny Visa’s motion to dismiss an antitrust lawsuit challenging its practices in the debit card market. The DOJ argued that Visa’s approximately 60% market share constituted illegal dominance.

This is another example of the Biden antitrust team’s tendency to rely solely on market share barometers without further proof of causation, instead of longstanding economic and legal precedents requiring further proof.

Under antitrust precedent, a 60% market share, while significant, doesn’t alone establish monopoly power. Courts typically begin to presume monopoly status at levels around 70% or higher—and even then, only when accompanied by admissible evidence of exclusionary conduct or consumer harm.

For example, in United States v. Aluminum Co. of America (Alcoa), the renowned Judge Learned Hand stated, “It is doubtful whether sixty or sixty-four percent would be enough.” In Conwood Co., L.P. v. U.S. Tobacco Co., the court stated that a company typically won’t be found to have monopoly power if it has below 70% of the relevant market.

Because payment volumes in the debit and payment processing industries continue rising and competition is robust, most traditional economic analyses would suggest there isn’t a monopolization case here.

In sharp contrast, the Trump administration has signaled its enforcement will be more closely tethered to those traditional standards of analysis. DOJ Antitrust Division Chief Gail Slater said in April that she intends to “bring economists back into the DOJ,” restoring rigorous analysis as the centerpiece of merger and conduct reviews. Slater emphasized that enforcement actions would require clear harm to consumers and competition, not merely size or dominance.

Another example of this antitrust shift came just days before the transition of power, when the FTC sued Deere & Co. in the Northern District of Illinois, alleging that Deere hindered the competitive marketplace by requiring farmers to rely exclusively on authorized dealers for equipment repairs.

While “right-to-repair” policies have gained political traction in recent years, the legal question remains whether such manufacturer controls rise to the level of antitrust violations without clear evidence of exclusionary impact or consumer harm.

Ferguson, in remarks about these very late-stage Biden-era cases, said they appeared to be rushed efforts “taken in haste to beat President Trump into office.” Referring to the Deere case, he argued the evidence was insufficient to support a viable complaint.

As Slater said in April, “If you’re doing a merger that’s benign, we’ll just get out of the way.” But she also made clear that enforcement will target conduct that undermines competition and hurts consumers, not simply market power in and of itself.

Legal analysts will be watching closely to assess how the antitrust principles the Trump antitrust team has outlined translate into action over the next four years. So far, the FTC’s dismissal of the PepsiCo case, and the DOJ and FTC’s broader scrutiny of the Biden administration’s pre-inauguration filings, suggest a reset is underway.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Bob McDonnell is an attorney who served as the 71st governor and 44th Attorney General of The Commonwealth of Virginia.

Write for Us: Author Guidelines