PepsiCo, Inc. v. The Coca-Cola Company (alleged monopolization)
Economic Advice in Litigation
The Situation
PepsiCo brought an antitrust suit against The Coca-Cola Company, alleging that Coca-Cola had monopolized certain distribution channels for soft drink fountain syrup. Specifically, Pepsi claimed that Coca-Cola had monopolized and attempted to monopolize the market for fountain-dispensed soft drinks distributed through independent foodservice distributors throughout the U.S. in violation of Section 2 of the Sherman Act.
NERA's Role
NERA's economists were retained by Coca-Cola to provide support against PepsiCo's claims. Our experts provided declarations, extensive supporting exhibits, an expert report and deposition testimony on behalf of Coke. These analyzed the role of independent foodservice distributors, the significance of alternative distribution channels for fountain syrup, the economics of fountain syrup distribution, the nature of competition among distributors, the bargaining position of syrup purchasers such as large restaurant chains, and the vigor of direct competition between Pepsi and Coke.
The Result
The U.S. District Court for the Southern District of New York awarded summary judgment to Coca-Cola, finding that Pepsi’s alleged relevant market was too narrow and unsupported by the facts. On appeal, the U.S. Court of Appeals for the Second Circuit upheld the District Court's decision, agreeing that fountain-dispensed soft drinks distributed through independent foodservice distributors were not a separate market, and finding further that Pepsi had provided no evidence indicating that Coca-Cola has monopoly power in any broader market.
