Rep. Porter’s Competitive Prices Act Will Make Sure Corporate Crime Doesn’t Pay
Washington, D.C. — The American Economic Liberties Project released the following statement in support of Congresswoman Katie Porter’s Competitive Prices Act, new legislation to address tacit and explicit forms of price and wage-fixing collusion. The bill, which is co-sponsored by Representatives Jerry Nadler (D-NY), David Cicilline (D-RI), Hakeem Jeffries (D-NY), and Pramila Jayapal (D-WA), uses a similar approach as model legislation Economic Liberties released earlier this year.
“Representative Porter’s Competitive Prices Act will make sure powerful corporations can no longer flout anti-collusion laws to straight-up steal from the American people,” said Sarah Miller, Executive Director of the American Economic Liberties. “It’s simple — in a severely monopolized economy, it’s easy for a handful of firms that don’t fear competition to coordinate to keep prices high. But because of loopholes in the law, it’s hard for antitrust enforcers to make sure corporate crime doesn’t pay. This bill would change that and we encourage Congress to make it law.”
Due to elevated pricing, corporate profit margins are reaching highs not seen since 1950. Yet research shows many of the price hikes seen across the economy today are not legal. Nearly every industry in the United States is controlled by a few dominant firms that can engage in coordinated price hikes and wage suppression without triggering obvious alarm among antitrust enforcers. These cartels are effective at keeping prices high and wages low. Indeed, the best modern scholarship shows that cartels raise prices by an average of 49% while a recent report from the U.S. Treasury Department found concentrated power has suppressed workers’ wages by roughly 20% on average, and by almost 30% for lower wage workers. These dominant firms are rarely held accountable; even very conservative scholars believe that antitrust enforcers catch only 20% to 30% of illegal cartels in the U.S.
Read more in “How Policymakers Can Stop Monopoly Prices Hikes,” here.
The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.