We broke it down. It’s a lot. There’s a video, too.
A newly unsealed FTC lawsuit reveals that PepsiCo ran a multi-year campaign to force competitors like FoodLion to raise their Pepsi prices while keeping Walmart’s prices low.
The advocacy group More Perfect Union just released the details of it on YouTube, to over a million views. The mini-documentary outlines the pricing scheme between PepsiCo and its single largest customer (totaling 14% of revenue), Walmart.
The Lawsuit
The complaint describes a system Pepsi called a “price gap” strategy.
The Trump administration first dropped the case in May 2025, leaving the documents sealed and redacted. But the Institute for Local Self-Reliance (ILSR), a consumer rights group, fought to have those documents unsealed.
They won. And those unsealed documents tell the jaw-dropping story of alleged decades-long collusion and price-fixing between America’s second-largest soda company trying to keep the business of the world’s largest retailer.
How It Worked
Pepsi kept its wholesale prices high for virtually every retailer, while quietly offering Walmart special promotional allowances, rollback pricing, “Save Even More” deals, and online coupons that other stores simply could not access.
When smaller chains like Food Lion tried to close the gap by discounting Pepsi products on their own, Pepsi labeled them “offenders,” tracked the competitive pricing as “leakage,” and punished them by cutting promotional payments or raising their wholesale costs.
Internal communications show Pepsi executives monitoring a “price gap” between Walmart and what they called “ROM” (rest of market) and panicking when that gap narrowed.
The goal was clear: make Pepsi cheaper at Walmart than everywhere else, protect Walmart’s market dominance, and in return, secure premium shelf placement at the world’s largest retailer.
But here’s what makes this bigger than just a Pepsi story: Walmart controls roughly 30% of U.S. grocery market share. That kind of leverage doesn’t only work on one supplier.
Proctor & Gamble, General Mills, and virtually every major CPG brand face the same math: lose Walmart, lose a critical chunk of revenue. The Pepsi lawsuit is the smoking gun.
Algorithmic Risk
The question now is how many other suppliers made the same quiet bargain. Regulators are raising the question: When does market intelligence become collusion?
Last year, Instacart acquired an AI pricing tool platform called Eversight that let retailers charge individually personalized prices based on a shopper’s data profile.
When Consumer Reports and Groundwork Collaborative released a scathing report on the practice, coining it ‘surveillance pricing,’ consumers were outraged. Quickly labeled as unfair, deceptive, and manipulative, it created immediate and widespread customer backlash.
Not surprisingly, in December 2025, Instacart ditched that algorithmic endeavor.
In the wake of the lawsuit, PepsiCo isn’t shying away from AI-rolled market data. The company is actively building what it calls an “Agentic Enterprise” using Salesforce‘s Consumer Goods Cloud; the program can deploy AI agents to manage field distribution and retail support.
Whether those tools ever interact with pricing decisions is a question regulators may soon be asking. Many algorithmic pricing software programs monitor competitors’ prices in real time and adjust automatically.
Used internally, these tools may be legal. But when that data is shared between a supplier and a dominant retailer to undercut rivals, or when an algorithm coordinates pricing across companies without any direct human interaction, it could cross the line in the eyes of the FTC.
That legal frontier is exactly where regulators are now looking.
Consumer’s Choice
This isn’t the first federal court go-round for either of these industry titans, or many others.
Many top US retailers and multinational food & beverage companies face FTC lawsuits, and are forced to pay millions of dollars in fines every year for consumer fraud, price gouging, collusion, etc.
In fact, The Regulatory Review published a study in 2020 that describes how these top companies often bake the price of FTC fines into their business model as the “cost of doing business.” Often thought of as merely a business expense and (compared to the profits acquired operating unlawfully) rarely deters further wrongdoing, it says.
While both PepsiCo and Walmart deny the claims, a class action lawsuit is now underway, and several U.S. senators have called on the FTC and DOJ to revisit enforcement of the Robinson-Patman Act.
But whether the buying public will tolerate big corporations paying fines instead of playing by the rules remains to be seen.
If consumers refuse to accept pricing strategies that control where customers shop by manipulating the best bargains in favor of the world’s largest retailer, they will ultimately move the gavel much farther than any FTC fine ever will.
Sources: Forbes, Grocery Dive, FTC.gov, Institute for Local Self-Reliance, The Regulatory Review, Consumer Reports, Groundwork Collaborative, More Perfect Union (YouTube)