FTC Drops PepsiCo-Walmart Pricing Lawsuit: Lina Khan Slams Move As ‘Gift to Giant Retailers’

The U.S. Federal Trade Commission has withdrawn its case against PepsiCo (PEP), which had accused the beverage giant of unlawfully providing preferential terms to Walmart (WMT).

The suit, filed just days before President Donald Trump's inauguration, claimed the beverage company provided promotional pricing deals to a single big-box customer but didn't give the same incentives to other retailers.

The FTC had alleged that PepsiCo's practices contributed to elevated consumer prices by giving Walmart an unfair advantage.

"Taxpayer dollars should not be used for legally dubious partisan stunts," FTC Chairman Andrew Ferguson reportedly said.

Back when the agency slapped the suit on PepsiCo, three of the five-member panel, who were Democrats, approved it.

Now, three Republicans lead the panel after Trump fired two Democratic commissioners in March amid a lot of controversy. According to NBC News, all three voted to drop the lawsuit.

PepsiCo shares reversed losses early Thursday before ending the session nearly flat.

Former FTC chain Lina Khan posted on X that the dismissal of the case was "a gift to giant retailers as they gear up to hike prices.”

The dismissal is a welcome development for PepsiCo, which is struggling to revive its snacks business amid broad weakness in consumer spending.

Last month, the company lowered its profit expectations for the year, citing higher supply chain costs.

Meanwhile, Walmart has indicated that it will raise the prices of products in its stores and is laying off 1,500 U.S. workers to manage tariff headwinds.

PepsiCo shares are down 14.4% this year, while Walmart stock is up 6.2%.

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