Business & Lobbying

DOJ to investigate companies that exploit supply chain disruptions

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The Justice Department on Thursday launched an initiative to identify and prosecute companies that exploit supply chain disruptions to overcharge consumers and collude with competitors.

The effort comes as pandemic-driven supply chain congestion continues to drive up the cost of transporting and producing goods. The Biden administration has scrutinized oil producers, ocean carriers, meat processing companies and other industries for raising prices amid surging inflation. 

The Justice Department said Thursday that it will investigate and prosecute companies that “seek to exploit supply chain disruptions for their own illicit gain.” The Justice Department is specifically looking into agreements between companies to fix prices or wages, rig bids or allocate markets that violate antitrust laws.

“Temporary supply chain disruptions should not be allowed to conceal illegal conduct,” Assistant Attorney General Jonathan Kanter, a critic of corporate consolidation, 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 Justice Department’s antitrust division formed a global working group to investigate supply chain collusion that will share intelligence with Australian, Canadian, British and New Zealand authorities.

With Thursday’s announcement, the Biden administration is ramping up its price gouging efforts that have drawn pushback from business groups that say rising prices are primarily a function of supply and demand. 

Consumer prices increased by 7.5 percent from January 2021 to January 2022, the fastest rate since February 1982, according to Labor Department data.

The Biden administration has gone after highly consolidated industries dominated by a handful of companies, arguing that reduced competition leads to higher prices for consumers.

The administration has scrutinized ocean carriers, which saw their profits more than triple during supply chain congestion, and meatpacking giants benefiting from inflated meat prices.

Tags Anti-competitive practices antitrust Collusion Department of Justice DOJ Inflation Price fixing Price gouging Supply chain

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