A Case Study for International Antitrust: Pepsi vs. Coke

Both the United States and the European Union are committed to free market competition and enforcement of antitrust laws. In distribution, exclusive contracts are often used to insure that the distributor carries only the supplier's product, gives it the best promotional space available, and promotes its sale to end users. In the case of Pepsi versus Coke, PepsiCo complained that Coke's exclusive dealing contracts with distributors involved unfair business practices which denied Pepsi the right to compete for customers. This paper explores this litigation under U.S. and European antitrust policies concerning abuse of a dominant market position. Pepsi lost its vertical restraint case in the U.S. but won its similar case in Italy. Therefore, companies that would engage in business in either the U.S. or the EU are advised to comply with the regulations of the host nation rather than relying on their domestic way of doing business.