Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Justice Department and FTC launch aggressive campaign against corporate price gouging, (Aug 2, 2024)
By George Basharis, J.D.
Federal agencies unveil concrete actions to combat unfair pricing practices across multiple industries, promising relief for American consumers.
The Department of Justice and FTC virtually cohosted the first public meeting of the Strike Force on Unfair and Illegal Pricing, marking a significant escalation in the government’s efforts to combat corporate price gouging and anticompetitive practices. The meeting, which brought together leaders from various federal agencies, highlighted a series of enforcement actions aimed at lowering prices for American consumers across a wide range of industries.
Antitrust division’s aggressive stance. Assistant Attorney General Jonathan Kanter, head of the Antitrust Division, delivered a forceful message, emphasizing the division’s commitment to taking concrete actions to put “more money in the pockets of real people by stopping illegal conduct.” Kanter, who was confirmed to lead the division while the pandemic was still raging, recounted his experiences talking to Americans across the country. “Here is what I heard: Americans were tired,” Kanter said. “They were tired of getting squeezed, they were tired of living paycheck to paycheck, they were tired of worrying whether the economy would work for working people.”
In response to these concerns, Kanter outlined eight specific areas where the Antitrust Division has taken action:
Health care: Blocking major health insurer acquisitions to preserve competition and protect consumer choice.
College tuition: Intervening in cases of financial aid price-fixing, resulting in settlements benefiting harmed students.
Housing: Addressing unfair practices in both real estate and rental markets.
Income and wages: Pursuing groundbreaking no-poach and wage-fixing cases, including the first-ever criminal conviction of an employer for wage collusion.
Airfare: Blocking airline mergers to maintain competition and keep prices in check.
Groceries: Preventing mergers that could lead to higher prices for essential food items.
Supply chain: Intervening in ocean shipping mergers to protect against inflated prices due to supply chain disruptions.
Concert fees: Enforcing antitrust laws to address rising costs and poor customer service in the live event ticketing industry.
Kanter emphasized that these actions were not just about punishing wrongdoers but also about creating opportunities for honest businesses to thrive in a competitive marketplace. “We want law-abiding companies to succeed and thrive by competing,” he stated.
FTC Chair Khan announces grocery price inquiry. FTC Chair Lina M. Khan used the meeting to highlight the Commission's recent efforts to combat corporate practices that raise prices for consumers. Khan announced plans to launch an inquiry into grocery prices, aiming to investigate tactics used by large grocery chains to increase prices and extract profits from consumers. Khan also noted the FTC’s work in uncovering evidence of corporate conduct that may raise gas prices, efforts to lower out-of-pocket costs for asthma inhalers, and initiatives to make it easier for consumers to cancel unwanted online subscriptions.
Broader efforts to combat unfair pricing. Acting Associate Attorney General Benjamin Mizer outlined the Justice Department’s comprehensive approach to tackling unlawful behavior affecting prices in essential sectors such as groceries, transportation, and healthcare. Mizer’s remarks underscored the department’s commitment to using its full range of legal tools to protect consumers from unfair pricing practices.
Civil Division’s role in consumer protection. Principal Deputy Assistant Attorney General Brian Boynton highlighted the Civil Division’s work in combating fraudulent pricing schemes and unfair consumer practices. Boynton detailed several key cases, including:
A lawsuit against Adobe for its use of hidden “early termination fees” in subscription services.
Actions against telehealth companies Cerebral, Inc. and Zealthy, Inc. for misleading billing practices and false advertising.
Criminal prosecution of individuals involved in odometer fraud schemes.
Enforcement actions against generic drug manufacturers for price-fixing conspiracies.
A case against a major insurance company for imposing unwanted and duplicative car insurance on borrowers.
Boynton emphasized that these efforts aim to protect both taxpayer dollars and American families from abusive pricing practices.
Challenges and commitment. Throughout the meeting, agency leaders acknowledged the significant challenges they face in taking on powerful corporate interests. Kanter noted that the Antitrust Division often confronts monopolies with more lawyers for a single case than the entire division has staff. However, he praised the dedication and talent of his team, stating, “They are not intimidated. They rise to the challenge every single day and will continue to do so without fear or favor.” He added, “By their actions, they are fighting to enforce the law and lower prices for hard working Americans.”
SEC participation. Securities and Exchange Commission Chair Gary Gensler also spoke at the meeting, highlighting related enforcement activities. Gensler noted that guarding against deceptive, fraudulent, or anticompetitive practices is at the heart of what the SEC does as the "the cop on the beat for the securities markets." He noted in particular that artificial intelligence offers tremendous promise but could also be used by bad actors for deceptive purposes; he added that there is also the possibility of anticompetitive behavior if a small number of platforms come to dominate the field.
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