Are you interested in learning more about price-fixing? When news broke recently that Canada’s four largest meatpacking companies are facing a class-action lawsuit in Quebec for allegedly conspiring to fix beef prices in the province for years, it was as they say, shocking but not surprising.
As the Toronto Star reported on March 29, Cargill Inc., JBS USA Food Company, Tyson Foods Inc., and the National Beef Packing Co. stand accused of conspiring to restrict competition in the production and sale of beef products in Quebec since 2015.
Between the four of them, the companies dominate the North American beef market and also face similar antitrust actions in the U.S. For its part, Cargill denies colluding with competitors, claiming it competes “vigorously in the market and conduct[s] ethical business.”
The topic of price-fixing isn’t top of mind
At the same time, the U.S. Department of Justice claims executives at Tyson and other major poultry producers similarly conspired to fix chicken prices by coordinating “massive, historic price increases” between 2012 and 2019.
While talk of wild conspiracy theories abounds these days amidst the COVID-19 pandemic, Canadians can perhaps be forgiven if the topic of price-fixing isn’t top of mind, even though they’ve likely been victimized over and over by real conspiracies involving some of Canada and the world’s largest corporations. Indeed, over the last three decades or so, price-fixing scandals have rocked a number of industries.
If you’ve bought any of the following products since the 1990s, it’s quite possible you overpaid due to collusion among industry players: cars, gasoline, chocolate bars, telescopes, gold, silver, copper, diamonds, foreign currencies, computers, packaged bread, vitamins, soft drinks (or anything containing high-fructose corn syrup), drywall, salmon, bricks, cellphones, and televisions.
Canada’s Competition Bureau
Of course, that list only includes industries where players were caught and called out, either by Canada’s Competition Bureau or in class action lawsuits handled by a handful of Canadian law firms. Perhaps the most infamous recent case in Canada involves packaged bread products, where billionaire-owned giants like Walmart and Loblaws copped to their involvement in an industry-wide price-fixing conspiracy that went on for 14 years.
While Bill Gates has drawn the delusional ire of conspiracy theorists over his involvement in vaccine distribution and development projects, Microsoft and its Canadian arm settled several class actions in 2020 for more than $400 million over accusations they illegally conspired to increase the price of certain software products between 1998 and 2010.
Despite settling the cases, the companies didn’t admit wrongdoing and “expressly” denied the allegations. Processing claims under the settlement was set to wrap up this spring, according to the website set up to handle consumer claims, which tone-deafly included a pun in the domain name “thatsuitemoney.ca.”
As part of its mea culpa, Loblaw avoided an ill-timed pun, instead of tossing crumbs to consumers in the form of a $25 gift card. Though still facing class-action lawsuits for their involvement in the scheme, Loblaw and its related firms were granted immunity from the Competition Bureau for being the first participants in the conspiracy to bring it to the bureau’s attention.
According to the Competition Bureau’s website, under its Immunity and Leniency Programs, participants in price-fixing conspiracies can avoid prosecution or serious criminal penalties including fines and jail time by cooperating with investigators.
The Competition Bureau claims that the immunity and leniency programs are among its “best weapons to combat criminal cartels under the Competition Act.” It’s a weirdly ironic situation where the bureau heavily relies on dishonest bad actors to wake up one day after years of ripping people off, see the light, and admit wrongdoing before taking action.
Yet, even when the Competition Bureau does get spurred into action, as it did in 2007 when Cadbury Adams Canada Inc. provided details of a chocolate price-fixing cartel, that doesn’t mean the charges stick. Cadbury avoided prosecution under the bureau’s immunity program after providing information about a price-fixing scheme involving big names including the Canadian arms of Nestle, Hershey, and Mars.
Public Prosecution Service of Canada
Eventually, Hershey Canada was fined $4 million but given leniency for its cooperation, while executives from Mars and Nestle and a wholesale distributor faced criminal charges in 2013 for their alleged involvement in the scheme which ran from 2002 through 2008. However, the Public Prosecution Service of Canada stayed the charges in 2015 without explanation, a decision which marked “the end of the chocolate price-fixing matter.”
With this in mind, it’s likely hard for Canadian consumers to maintain confidence in what’s supposed to be a free-market economy that encourages innovation and incentivizes competitive pricing. But instead of industry players being matched up like pugilists in a fair, tightly regulated marketplace, numerous examples of price-fixing conspiracies over the years make that marketplace look less like a boxing match and more like a professional wrestling spectacle.
In this scenario, supposed adversaries performatively compete and pretend to hate each other in the ring, while being close and friendly back in the dressing room, the outcome of the match fixed from the beginning. The difference is that everyone knows wrestling is fake, yet they recognize the entertainment value.
The price-fixing cartel
In contrast, such fakery in a capitalist free-market economy keeps leaving Canadians the poorer for it. Instead of the Competition Bureau incentivizing bad actors to snitch on themselves in exchange for kid-glove treatment, perhaps it’s time to try a new tactic of radical deterrence through real accountability. Otherwise, Canadians will likely continue to be victimized by price-fixing cartels again and again.
Author: Alistair Vigier is the CEO of ClearWay Law, a lawyer directory that helps Canadians find a lawyer in Canada. He also manages www.clearwaylaw.cn. The law blog gets over 110K readers each month.