In the wake of persistent price increases initially stemming from supply chain disruptions caused by the Covid-19 global pandemic, the Department of Justice and the FBI launched an initiative last month to deter, detect and prosecute those who exploit supply chain disruptions to engage in collusive conduct.
“Temporary supply chain disruptions should not be allowed to conceal illegal conduct,” Assistant Attorney General Jonathan Kanter of the DOJ’s Antitrust Division said in a statement. “The Antitrust Division will not allow companies to collude in order to overcharge consumers under the guise of supply chain disruptions.”
“The lingering challenge of supply chain disruptions from the Covid-19 pandemic has created an opportunity for criminals to fix prices and overcharge customers,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “The FBI and our law enforcement partners will continue to collaborate and investigate schemes that violate our antitrust laws and stifle our economic recovery.”
As part of the initiative, the Antitrust Division is prioritizing any existing investigations where competitors may be exploiting supply chain disruptions for illicit profit and is undertaking measures to proactively investigate collusion in industries particularly affected by supply disruptions. The Antitrust Division has also formed a working group focusing on global supply chain collusion with its global partners, the Australian Competition and Consumer Commission, the Canadian Competition Bureau, the New Zealand Commerce Commission and the United Kingdom Competition and Markets Authority. The working group is developing and sharing intelligence, utilizing existing international cooperation tools, to detect and combat collusive schemes.
Economies across the globe have faced significant challenges caused by supply chain disruptions resulting from the Covid-19 global pandemic, the DOJ said. Transportation constraints, disruptions to routine business operations and difficulty in obtaining raw materials have all led to increased costs of production and shipment, which in turn have resulted in higher prices for consumers. Supply chain disruptions have been broad in scope, affecting a variety of industries ranging from agriculture to health care.
While many individuals and businesses across various sectors in the economy have responded and will continue to respond to supply chain disruptions caused by the pandemic with laudable ingenuity — bringing goods to communities in need, expanding existing capacity and developing products and services to meet new needs — others may seek to use supply chain disruptions as a cover for collusive schemes, the DOJ said.
For those who seek to exploit supply chain disruptions for their own illicit gain, the Antitrust Division, along with the FBI, will investigate and prosecute criminal violations of the antitrust laws, including agreements between individuals and businesses to fix prices or wages, rig bids or allocate markets.
Anyone with information on price fixing, bid rigging, market-allocation agreements or other anticompetitive conduct should call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, or visit http://www.justice.gov/atr/report-violations.