How do I counter Sonic?

The thing about beating Sonic is you have to play smarter; be patient. Don't be overly aggressive and don't overexert for little things such as a jab or grab. The only way to beat Sonic is to capitalize on his end lag and don't let him capitalize on yours.

This probably won't help because you don't main him, but wario counters sonic a lot. Spin dash - chomp, homing attack - chomp,tries to run fast and quickly hit you- chomp. Chomp kills sonic.

My brother is the most annoying sonic player I know, but I have found some tricks that may help you get the upper hand. Some sonic players will use their up B to bet out is sticky situations. Try to get where they land and it is easy to land a grab when they hit the ground. Just be careful because sonic can still attack while in free fall. I would recommend shielding until they hit the ground and then go for a grab. Shielding can also cause a spin dash to be useless, but it is hard to punish after that. Some projectiles are effective at stopping the spin dash as well.

I main Sonic myself, I say the best counters that I have experienced, is Cloud, ZSS, Lucas and Ness, Diddy Kong (Some say its a neutral) his banana can really mess them up, Fast projectile users (Don't use Fox stick with falco) if your using heavy characters, then I recommend little mac because their speed is almost similar, but his recovery can really mess you up. Though I highly recommend that you use his n-B(super armor) That can stop them for a while. Since you use falco, I say you stay back when the user fails to use their spin dash correctly, and shoot them to slow them down, and go really aggressive when said user is recovery, its straight up, and only deals damage below them, so that a perfect time to spike them down, Ike is also a good counter, when they are about to do a up air gimp, counter on their 3rd up air that will you give you enough time to do it. Really that all I recommend.

TL;DR: Learn to play a stronger Neutral Game, practice counters to specific situations/moves and watch professional players.

This is a good question and still a real problem for many players. The other answers here hit on the main point: you need a strong Neutral Game. Sonic is fast enough to punish just about anything, even from across the stage. This means if you go throwing out moves, you'll be punished.

So like the other answers mention, instead of trying to rush the Sonic--which probably won't end well with his speed--play things a little slower.

Watch them closely. After they hit you with Side-B (Side Special) regardless of whether they hit you or shield, do they always jump and Neutral-Air? Jump and Forward-Air? If so, then after they hit your shield, you have a jump to Up-Air punish or maybe even more depending on your character.

When playing a Sonic I prefer to use Mewtwo or other characters with a fast Down-Tilt like Roy/Marth/Lucina. When the Sonic comes in with the Side-Special, Mewtwo and friends' Down-Tilt's are fast enough that it's easy to time to knock the Sonic out of it. And then from there Mewtwo has a free Neutral-Air/Forward-Air/any other follow up to D-Tilt.

Outside of bettering your Neutral Game and practicing specific punishes for Sonic's Side-Special, I'd strongly suggest watching professional level competitive play. You can find a list of professional players for each character here (here's an example of the Mewtwo page). Then from there, you can search YouTube to see how they handle the Sonic matchup (continuing the Mewtwo example, this is what such a search would look like).

Best of luck!

Sonic is pretty squishy.

Try grabbing him, then throwing him up to make him in the air then finish him off with some aerials. Not everyone's style of play but I sure use it.