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With a sole focus on price-fixing, the new division would act as a reserve force waiting to pounce on any sector of the economy where pernicious pricing arises.
The Revolving Door Project, a Prospect partner, scrutinizes the executive branch and presidential power. Follow them at therevolvingdoorproject.org.
High prices are at the top of voters’ minds this election, with polls showing that a vast majority list inflation as a top concern. Swing-state voters see rent and housing costs as a major issue and will support candidates who pursue policies to alleviate this strain. Young voters identify the cost of food and groceries as their top economic issue.
While some inevitably blame President Biden, there is also a bipartisan belief among the electorate, including 45 percent of Republicans, that corporate greed is playing a large role in inflation. There are countless examples that bear out this assessment. RealPage’s algorithmic rent-setting, which is simply collusion by corporate landlords via a third party, has wreaked havoc in rental markets across the country. Oil and gas companies attempted to collude to artificially inflate prices.
Biden has done a lot to rein in corporate abuses; grocery chains are finally slashing prices after raising them dramatically since the start of the pandemic. But these successes are clearly not translating into public confidence. In fact, people mistakenly believe that Trump would be better on the economy despite agreeing with Biden on the influence of corporate greed.
In March, the White House announced the formation of the Strike Force on Unfair and Illegal Pricing. Jointly chaired by the Department of Justice and Federal Trade Commission, but encompassing a large swath of executive agencies, the coalition has a mandate to crack down on corporations ripping off the American people. A strike force that is hyper-focused on corporate pricing schemes, with the investigative and prosecutorial authority to back it up, is a political winner that substantively benefits American pocketbooks.
It is such a good idea, in fact, that it should become a permanent fixture of the executive branch.
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Antitrust enforcers are already stretched thin, with minimal budgets and personnel. FTC chair Lina Khan recently raised this issue specifically in regard to a push from legislators for the agency to investigate more oil mergers, saying, “Additional resources would better equip the Commission to fully pursue its mandate and continue the vital work of promoting competition in oil and gas markets.”
To alleviate this burden, Biden should work with congressional leaders to propose legislation that creates an Anti-Price-Fixing Division within the DOJ, equipped with substantial new appropriations to enable the government to hire world-class experts and attorneys who can effectively uncover and prosecute corporate criminality.
Specialized task forces of this kind are common within the DOJ Antitrust Division. The Procurement Collusion Strike Force works with the FBI and state attorneys general to identify and prosecute fraud in government contracts. The Task Force on Health Care Monopolies and Collusion, as the name suggests, addresses the rampant consolidation of the health care industry. But these divisions are targeted at specific sectors of the economy, and are not equipped to play whack-a-mole at illegal pricing as it pops up unpredictably.
For years, the Antitrust Division was primarily concerned with price-fixing, as it ignored corporate concentration. But as merger challenges and monopolization cases have been revived, and as price-fixing has become more sophisticated and high-tech, the need for a separate division becomes more clear.
Biden needs to throw every possible resource at the problem, and an expert team of lawyers knocking the heads of corporate villains is the perfect way to let the public know that the government has their back. With a sole focus on price-fixing, the new division would act as a reserve force waiting to pounce on any sector of the economy where pernicious pricing arises. By housing the force within DOJ, the unit will be able to pursue both civil cases and long-overdue criminal accountability for corporate crooks. Once one industry is cleaned up, the force can move on to the next problem area while the administration runs PR campaigns touting their successes.
Biden would benefit greatly from making price-fixing a massive legislative fight, where his previous accomplishments on the issue are spotlighted. When Trump and congressional Republicans are unwilling to address the culpability of corporations, it will be clear they do not take the concerns of the electorate seriously. Biden and his allies, on the other hand, will be seen as risking political capital on behalf of consumers’ pocketbooks.
Despite the White House’s announcement of the strike force, it’s unclear what concrete actions the new venture has taken. This is hardly surprising. Cooperative efforts of this nature are subjected to the fluctuating capacities of both the co-chairs and their other government partners. This is not necessarily a criticism of the important work by these intergovernmental task forces—it is a statement of the reality that finite resources necessitate difficult prioritization decisions.
Creating a new congressionally mandated division would allow the DOJ to always have the investigative resources to go after price-fixers. Furthermore, under other administrative leadership, a strike force may be diminished if departments decide to allocate their limited appropriations elsewhere. Funding and mandates are still subjected to the whims of partisan haggling, but it is much more difficult to cut from established divisions than it is to quietly divert money away from informal task forces.
A legislative push to institutionalize the fight against price-fixing, price-gouging, and related practices would spotlight the issue and force Republicans to do more than talk a big game. Perhaps it wouldn’t pass, but the electorate would witness Trump and Republicans vote in favor of corporate price hikes over enforcing the rule of law. At the very least, it could shift public opinion on who really cares about high prices and which party is willing to act on behalf of consumers. At best, Americans will have a well-funded, well-staffed team of experts and litigators in their corner fighting against corporate greed
