U.S. Senator Amy Klobuchar, chairman of the Judiciary Antitrust Subcommittee, held a hearing today to discuss efforts to crack down on price-fixing cartels that rip off consumers and hurt the economy. When companies illegally collude to set prices for their products, consumers lose hundreds of millions of dollars in higher costs. The Department of Justice has uncovered an extensive network of price-fixing cartels that are causing higher prices on everything from TVs to cars. At the hearing, Klobuchar pressed Department of Justice and FBI officials on ways to effectively fight price fixing and protect consumers.
"As the holiday shopping season approaches, we need to make sure that businesses are competing to provide the best products at the lowest cost," said Klobuchar. "When companies illegally collude to set higher prices for their products, it's the consumer -- and the economy -- that loses. This hearing was an opportunity to take a close look at ways we can better fight these price-fixing cartels and protect families' pocketbooks."
Price fixing is when competitors illegally form a cartel to either set the price for their products, restrict production, or agree not to compete, in an effort to avoid the competitive pressures of the market. As a result of price fixing, consumers pay higher prices, competition suffers and innovation is stifled. In FY 2013, the Department of Justice Antitrust Division obtained $1.02 billion in criminal antitrust fines and charged 21 corporations and 34 individuals. One high profile case involved price fixing by manufacturers of LCD screens for TVs, computers, and other devices, between roughly 2001 and 2006, meaning any consumer who purchased a device in that time was a victim of price fixing. The Department of Justice has charged 13 executives and fined the participating companies $1.39 billion in relation to the case. Due to recent budget constraints however, the Department of Justice has closed four antitrust field offices, raising concerns that smaller domestic cartels are going unchecked.
Witnesses at the hearing included the Hon. William Baer, Assistant Attorney General at the Antitrust Division of the Department of Justice; Ronald T. Hosko, Assistant Director of the Criminal Investigative Division of the FBI; Hollis Salzman, Partner & Co-chair of the Antitrust and Trade Regulation Group at Robins, Kaplan, Miller & Ciresi, LLP; Christopher B. Hockett from the Section on Antitrust Law at the American Bar Association; Margaret C. Levenstein, Research Scientist and Adjunct Professor of Business Economics and Public Policy at the Ross School of Business at the University of Michigan; and Mark Rosman, Partner at Wilson, Sonsini, Goodrich & Rosati.