The Pepsi lawsuit was filed against Coca-Cola because the companies are perceived to be monopolizing sales of soft drinks. In its lawsuit, Pepsi challenged Coke for monopolizing sales in the fountain segment of the $55 billion soft drink industry. The lawsuit only relates to fountain-dispensed beverages – the sales of which are controlled by the large foodservice distributors that supply chains of restaurants.
Pepsi’s loyalty policy amounted to unlawful monopolization
The case centers on whether PepsiCo’s loyalty policy amounted to unlawful “monopolization” of the fountain drinks market. While Pepsi acknowledges that it faces significant competition from Coke in the market for fountain drinks, it maintains that it does not have a monopoly over fountain syrup. Further, PepsiCo acknowledges that its loyalty policy puts it at a competitive disadvantage and that the one-stop shopping provided by Coca-Cola to its customers puts it at a competitive disadvantage.
In this case, Coca-Cola moved to enforce its loyalty policy and prevented its distributors from handling Pepsi products. PepsiCo sued Coca-Cola for unlawful monopolization and attempted monopolization. The district court affirmed, and the Court affirmed. The court noted that the evidence presented by Coca-Cola was strong. However, Coca-Cola argued that customers can choose between Pepsi syrup and fountain syrup. Moreover, the district court’s decision relied on the Supreme Court’s admonition and misreads the district court’s opinion.
It threatens to open Pandora’s box
A Pepsi commercial that is now a legal headache is now being sued by a business student. The commercial starred a computer-animated jet landing on a college campus. The actor, who played the title role, was named John Leonard, a 21-year-old business student. The Harrier jet, which Leonard would buy for seven million Pepsi points, was also available in the commercial.
The Pepsi lawsuit, which alleges that Coca-Cola is violating antitrust law by freezing out independent food distributors, is a threat to the coal industry. The lawsuit marks a new level of bitterness in the cola wars, and it raises questions about anti-competitive practices. The lawsuit has divided analysts. But whether it will succeed or not is unclear.
It threatens to mobilize workers
The Pepsi lawsuit is not only about wages – it is also about unfair labor practices. The company misclassified 40 distribution workers as independent contractors, instead of employees. This unauthorized classification of workers puts them at a higher risk of being fired or suspended. Those who work for Pepsi must follow a certain route to deliver the company’s products to customers. Workers must report any harassment or violations to the employer, and if the company doesn’t follow its own rules, the workers can take action against the company.
In December, the cyberattack on the company’s timekeeping system locked employees out of their jobs. The result was that PepsiCo failed to accurately record the hours their employees worked and subsequently underpaid them. The company self-estimated their workers’ hours based on past pay periods. That was not enough to prove the workers’ claims of underpayment. So, the workers filed a class-action lawsuit against PepsiCo in hopes of getting their wages.