The US government is stepping up its investigation into allegations that three giant investment firms – BlackRock, State Street, and Vanguard – conspired to manipulate the coal industry, ultimately driving up energy prices for consumers.
State and Federal Action
Last November, eleven state attorneys general, led by Texas Attorney General Ken Paxton, filed a lawsuit accusing the firms of an anti-competitive scheme. They claim the firms, using their considerable influence as major shareholders in competing coal companies, worked together to reduce coal production. This allegedly involved the illegal sharing of sensitive competitive information.
Now, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) have officially thrown their weight behind the states’ case. Federal officials argue that the firms’ actions artificially inflated energy costs for both businesses and consumers.
The Alleged Scheme
The government’s argument centers on the idea that these firms went beyond typical investment activities. They claim the firms intentionally coordinated their actions as major shareholders to restrict coal production, boosting their profits at the expense of consumers. This, the government says, is a clear violation of antitrust laws. The DOJ emphasized that this isn’t about typical investing or even shareholder activism; it’s about an alleged conspiracy to restrict output and raise prices.
