Big Tech Faces Multidirectional Scrutiny... Competition Laws Sealed for Decades Also Deployed (Comprehensive)

[Asia Economy Reporter Yujin Cho] Coca-Cola, the undisputed number one in the U.S. cola industry, and its rival Pepsi are facing investigations for antitrust law violations. Under the Joe Biden administration, intensified antitrust regulatory pressure is spreading comprehensively from big tech to manufacturers.

The Wall Street Journal (WSJ) reported on the 10th (local time) that the U.S. Federal Trade Commission (FTC) is conducting an investigation into the pricing practices of Coca-Cola and Pepsi in the U.S. soft drink market. Sources familiar with the matter said that an investigation into price discrimination is underway, but it is still in the preliminary stage.

The FTC is investigating whether Coca-Cola and Pepsi, the oligopolistic companies in the U.S. soft drink market, have violated the Robinson-Patman Act, which prohibits anti-competitive price discrimination.

The Robinson-Patman Act is a law that requires producers to supply goods to all buyers at the same price. Under this law, allegations that Coca-Cola or Pepsi supply products at lower prices to certain large distributors constitute a violation.

The Robinson-Patman Act is very technical in its application, and due to many legal disputes and its low effectiveness, it has seen very little use since its enactment in 1936.

Foreign media have pointed out that this law has not been used since 2000 and, contrary to its intent to help small distributors compete, it only raises the prices of products sold by large distributors without producing significant effects.

Alden Abbott, a former FTC legal advisor during the Donald Trump administration and senior fellow at the Mercatus Center at George Mason University, argued, "Reviving the Robinson-Patman Act would only increase living costs for low-income consumers."

[Image source=Reuters Yonhap News]

The FTC is taking an aggressive stance. It is known that the FTC has already requested data from large distributors, including Walmart, to verify transaction prices with Coca-Cola and Pepsi.

According to Euromonitor International, as of the end of 2021, Coca-Cola maintains the number one market share in the U.S. soft drink market at 46%, followed by Pepsi at 26%.

A Coca-Cola spokesperson denied the allegations, stating, "We are committed to fair and legal competition in the market." They also said, "Claims that we have engaged in any illegal activities in sales or distribution are unfounded, and we are prepared to defend against specific allegations."

The Biden administration, shortly after taking office in January 2021, divided oversight of big tech between the Department of Justice and the FTC and officially launched regulatory efforts. Since then, the executive, legislative, and judicial branches have simultaneously increased antitrust regulatory levels across technology, healthcare, and manufacturing sectors.

Led by Lina Khan, the FTC has taken the lead in tightening control over monopolistic and oligopolistic companies, filing antitrust lawsuits against big tech firms such as Microsoft (MS).

Starting with Amazon being sued for antitrust violations by the Washington DC prosecutor's office in May last year, the acquisition of Blizzard by MS, considered the largest merger and acquisition in the IT industry, also faced a powerful antitrust lawsuit from the FTC in December last year, casting uncertainty over the completion of the acquisition.

This content was produced with the assistance of AI translation services.