Report: Illegal Price-Fixing Conspiracies are Widespread in U.S. Economy

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Apr 18, 2023, 08:00 ET

WASHINGTON, April 18, 2023 /PRNewswire/ -- A new report from the research group Good Jobs First finds that large companies operating in the U.S. have since 2000 paid $96 billion in fines and settlements to resolve allegations of covert price-fixing in violation of antitrust laws.

Illegal pricing conspiracies have occurred in many industries, affecting the cost of products ranging from grocery items to electronics. In industries such as financial services and pharmaceuticals, almost every major corporation (or a subsidiary) has been a defendant.

These are the key findings of Conspiring Against Competition, a report from the Corporate Research Project of Good Jobs First, a non-profit center focused on corporate accountability. The report, available at goodjobsfirst.org, draws on data collected from government agencies and court records for inclusion in the Violation Tracker database.

"Large corporations which are supposed to be competing with one another are often secretly conspiring to set prices," said Philip Mattera, research director of Good Jobs First and author of the report. "In doing so, they cause economic harm to consumers and contribute to inflation."

Of the more than 2,000 cases in which companies made payments to resolve civil and criminal price-fixing allegations 357 were brought by the Justice Department and other federal agencies ($26 billion in penalties); 269 cases were brought by state attorneys general ($15 billion); and 1,407 were private class-action lawsuits ($55 billion).

Over one-third of the $96 billion in penalties was paid by financial services companies, mainly to resolve allegations they rigged interest-rate benchmarks. The second most penalized industry, at $11 billion, is pharmaceuticals, due largely to conspiracies to block the introduction of lower-cost generic alternatives.

Along with conspiracies to raise prices, the report reviews litigation involving schemes to depress wage rates. These include cases in which companies entered into agreements not to hire people working for each other. These no-poach agreements inhibit worker mobility and depress pay levels.

Despite the substantial sums corporations pay in penalties, price-fixing scandals continue to emerge on a regular basis, and numerous corporations have been named in repeated cases.

"Higher penalties could reduce recidivism," Mattera said. "But putting a real dent in price-fixing will require aggressive steps to deal with the structural reality that makes it more likely to occur: excessive market concentration."

Contact: Philip Mattera (202-725-7906) or [email protected]

SOURCE Good Jobs First