The Case of the Concrete Conspiracy

Keeping Free Markets Free
The Case of the Concrete Conspiracy

06/26/06

The fix was in: for nearly four years, the president of a ready-mixed concrete company in the Indianapolis area had brought his competitors together for a series of secret meetings—in local hotels and in a horse barn near his home in the northern suburbs—to collectively set in the stone the price of their highly popular product.

During the meetings, they all agreed to charge the same high prices, to wipe out or cut back any discounts, and to collectively enforce the deal they struck.

Illegal? You bet. Antitrust laws like the Sherman Antitrust Act, the Clayton Act, and the Federal Trade Commission Act prohibit price fixing, bid rigging, and unfair mergers and acquisitions. It's economics 101: free markets and fair competition ensure that businesses keep scrambling to provide the best products at the best prices…so consumers keep buying, inflation stays low, and the economy stays healthy.

In this case, the conspirators profited handsomely…at the expense of the many area businesses, suppliers, state and federal agencies, and consumers who use ready-mixed concrete—a blend of cement, sand, gravel, water, and other additives that's made on demand and shipped to work sites.

Now, following an intensive investigation by our office in Indianapolis and prosecutors in Chicago and Indiana, many of these concrete makers are paying the price. So far, four companies and nine executives have pled guilty or been charged in the scheme. Collectively, they've also been fined more than $30 million—including one fine of $29.2 million, the largest ever in a domestic antitrust case.

The investigation continues. If you have any information on possible price fixing or anticompetitive practices in ready mixed concrete industry, please contact our Indianapolis office at (317) 595-4000 or the Chicago Field Office of the U.S. Department of Justice's Antitrust Division at (312) 353-7530. Or submit a tip online.

We've got plenty more antitrust cases going, too. Here are a few:

• A former Michigan school official and his wife recently were charged for their alleged role in a scheme to steer school contracts to a company they owned to obtain nearly $7.3 million from a Michigan public school system and the federal E-Rate program.
• Three executives from the world's largest manufacturer of a common computer component called dynamic random access memory (DRAM) recently agreed to plead guilty and serve jail time for participating in a global DRAM price-fixing conspiracy. So far in the case, four companies and 12 individuals have been charged and fined more than $731 million.
• Two foreign companies recently agreed to plead guilty and pay more than $72 million in fines for participating in international price-fixing cartels in the hydrogen peroxide and sodium perborates industries.
• A U.S.-based brokerage firm and one of its auction representatives recently were indicted for allegedly participating in a bid-rigging conspiracy involving the sale of otter pelts.