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Most of us don't think too much about the price of canned tuna. It's generally pretty cheap, and if we're not penny pinching we'll likely go with the recognizable label on the shelf. You know, the blue can with Charlie Tuna on it?
But in an effort to squeeze more pennies out of its customers, StarKist, perhaps the most recognizable brand of tuna on the market, got itself into some costly trouble. The company pleaded guilty to conspiracy to fix prices of packaged seafood, and is now facing a possible $100 million in fines.
Something Smells Fishy
"The conspiracy to fix prices on these household staples had direct effects on the pocketbooks of American consumers," said Assistant Attorney General Makan Delrahim of the Justice Department's Antitrust Division. "All Americans have the right to the benefits of free and open competition -- the best goods and services at a price free from collusion. We will continue to hold companies and individuals who cheat consumers accountable."
According to investigators, StarKist and its co-conspirators agreed to fix the prices of canned tuna fish, undermining that free and open competition, from at least November 2011 through December 2013. The Justice Department filed total of six charges stemming from its antitrust investigation into the packaged seafood industry, with StarKist pleading guilty to one of them. The company also agreed to cooperate with the investigation, which could lead to leniency when it comes to its fines.
"We have cooperated with the DOJ during the course of its investigation and accept responsibility," said StarKist chief executive Andrew Choe. "We will continue to conduct our business with the utmost transparency and integrity."
Price fixing is just one of many anti-competitive practices, designed to limit or eliminate competition and cost consumers more, and is illegal under federal law. Under the Sherman Act, it doesn't even matter whether prices were fixed at a maximum price, minimum price, the actual cost, or the fair market price. Any agreement to artificially set prices between firms is prohibited.