In the May 27 issue of USA Today, AAI Founder Bert Foer and AAI Director Robert Lande join U.S. Court of Appeals Judge Douglas H. Ginsburg and FTC Commissioner Joshua Wright to argue that DOJ, among other things, should prohibit convicted firms from re-employing convicted employees after their release from prison.
Unfortunately, in spite of the DOJ's best efforts, corporate collusion is often still profitable net of fines and damages. Moreover, evidence suggests that many companies encourage their employees to engage in this lucrative but illegal activity by re-employing them upon their release from prison. The prospect of a one- to two-year "timeout" at a white-collar clink is not too much to pay, it seems, for job security and other benefits.
The four of us are known in antitrust circles for the points on which we disagree. We do agree, however, that price fixing among competitors is bad for consumers — who pay artificially elevated prices — and is inadequately deterred, with too many price-fixing cartels continuing to operate despite ever-increasing sanctions. Indeed, two careful event studies covering 40 years of price-fixing indictments of publicly traded firms in the United States show that the stock prices of 80% of the companies rebounded to pre-indictment levels in less than one year.
It is time to focus on the individuals who participate, on behalf of their employers, in illegal cartels. Companies are properly held responsible, but it is individuals who actually do the dirty work.
Read the entire article here.