The U.S. Department of Justice on Thursday announced an initiative to investigate and prosecute collusive conduct in the supply chains.
The initiative comes in the wake of persistent price increases initially stemming from supply chain disruptions caused by the COVID-19 global pandemic, the Justice Department said in its announcement. It also puts business on notice that the Department’s Antitrust Division is looking out for companies that would exploit supply chain disruptions to engage in illegal, anticompetitive conduct.
“Temporary supply chain disruptions should not be allowed to conceal illegal conduct,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “The Antitrust Division will not allow companies to collude in order to overcharge consumers under the guise of supply chain disruptions.”
As part of the initiative, the Antitrust Division will prioritize 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.
According to maritime law firm Holland & Knight, the fact that the Department of Justice’s announcement of the initiative does not single out specific supply chain industries indicates the areas of intended scrutiny are expected to be far-reaching.
“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,” the Justice Department said in a statement.
In an alert to industry, Holland & Knight points out that the initiative is the most recent undertaking by the federal government directed at supply chain disruptions caused by the pandemic.
In addition to a White House task force announced in June 2021 to “address supply and demand mismatches that emerged in several sectors,” the Federal Maritime Commission and the Justice Department also signed a first-of-its-kind agreement in July 2021 to increase oversight and enforcement of the ocean liner shipping industry following an Executive Order aimed at cracking down on anti-competitive behavior and “unjust and unreasonable fees,” including detention and demurrage charges which have soared during the pandemic.
“In casting a broad net over the entire supply chain, and indicating its willingness to work with the Federal Maritime Commission and foreign partners, the DOJ is highlighting that no business enterprise is immune from governmental scrutiny for antitrust violations – or from civil or criminal enforcement,” Holland & Knight said in its alert.
In addition to the initiative, the Justice Department’s Antitrust Division has also formed a working group with the Australian Competition and Consumer Commission, the Canadian Competition Bureau, the New Zealand Commerce Commission and the United Kingdom Competition and Markets Authority, which will work to develop and share intelligence to detect and combat collusive schemes.
Copyright gcaptain.com 2022
Mr Mike Schuler
Photo: mark reinstein / Shutterstock.com