Section 1 of the Sherman Act of 1890 declared illegal "every contract, in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations." Enforcement is the responsibility of the Antitrust Division of the U.S. Department of Justice. What is a recent antitrust action performed by the Department of Justice?
What did the Department of Justice decide?
Why did the Department of Justice take the action it took?
Will the Department of Justice's action be economically beneficial?
One recent antitrust action taken by the Antitrust Division of the United States Department of Justice was a court case brought against Robert Bosch GmbH, also called Bosch, a leading automotive parts supplier. Bosch was charged with price fixing and bid rigging. Bid rigging happens when a contract is promised to a bidder after other fake bidders have placed fake birds "for the sake of appearance" ("Bid Rigging"). There are several methods of bid rigging, but one uses "cover bidding" in which conspirators intentionally place non-competitive bids so that the winner can pay a designated price, usually lower ("Bid Rigging"). As recently as yesterday, March 31, 2015, the Department of Justice issued a statement disclosing that Bosch "has agreed to plead guilty and to pay a $57.8 million criminal fine" ("Robert Bosch GmbH Agrees to Plead Guilty"). Bosch fixed prices and rigged bids on spark plugs, oxygen sensors, combustion engine parts, and starter motors for automobile and engine manufacturers in the U.S. as well as in other countries.
Pressing Bosch for criminal charges is a perfect example of the Antitrust Division of the United States Department of Justice overseeing the enactment of Section 1 of the Sherman Antitrust Act of 1890 because the section forbids even conspiracies to control US trade. Bosch certainly acted conspiratorially when the company both fixed prices and rigged bids at "non-competitive prices" to give its own company the advantage in the auto-parts market. Cracking down on Bosch's criminal actions will benefit the economy by opening the auto-parts market up to competition from other companies; however, since Bosch fixed the prices at "non-competitive prices" to give themselves the advantage, increasing competition may also raise the prices of auto parts, which, in the present economy, could hurt the automobile industry at least in a minor way.