Other LanguagesWashington antitrust penalties now among nation’s strongest
OLYMPIA — Washington state’s maximum penalties for antitrust violations like price-fixing and collusion will be among the strongest in the nation after the Legislature approved a bill last night sponsored by Rep. Darya Farivar, D-Lake City, and requested by Attorney General Bob Ferguson.
Antitrust violations include anticompetitive behavior like collusion, monopolization or price-fixing to inflate prices to produce higher profits, or avoiding losses by working together to artificially prop up prices.
Ferguson is engaged in an ongoing lawsuit targeting a price-fixing conspiracy in the broiler chicken industry. That lawsuit already produced more than $40.6 million in financial restitution for impacted Washingtonians, with a trial scheduled against the remaining co-conspirators in October 2024. Additionally, Ferguson’s legal team is engaged in several antitrust lawsuits against dozens of pharmaceutical companies, including Teva Pharmaceuticals, the largest generic drug manufacturer in the world, for conspiring in secret to increase prices of over a hundred common medications. These include everyday antibiotics, antidepressants, contraceptives and statins.
With the passage of House Bill 2072, Washington increases the maximum civil penalty for price-fixing, collusion and other antitrust violations to three times the unlawful gains or loss avoided. Prior to the passage of this bill, Washington’s antitrust penalty lagged far behind other states and did not provide meaningful deterrence for unlawful conduct by large corporations. The maximum penalty was $900,000 – even if the price-fixing conspiracy netted tens of millions of dollars in profit.
Sen. Yasmin Trudeau, D-Tacoma, sponsored the companion bill, Senate Bill 5994. The National Federation of Independent Business signed in to support the bill in committee, joining the Statewide Poverty Action Network, Teamsters, Washington State Association for Justice, and Washington Build Back Black Alliance.
“We’ve seen price-fixing conspiracies unfairly drive up costs on everyday items for hardworking Washingtonians,” Ferguson said. “Strong penalties deter price-fixing and monopolies that harm Washingtonians, and help businesses by ensuring a more level playing field. I appreciate the bipartisan support in the Legislature for strengthening our penalties to provide a meaningful deterrent to bad actors.”
“Right now, breaking the rules is seen as just another cost of doing business in Washington,” Farivar said. “This is unequivocally wrong. By passing HB 2072, we send a clear message: corporations will be held accountable and every business will be able to participate in a fair playing field.”
By law, penalties go to the state general fund. Ferguson expects this legislation to increase revenues to the state.
Washington law currently allows for the recovery of restitution of the harm done to consumers, as well, but proving the exact harm done to individual consumers is challenging in cases of collusive, price-fixing conspiracies. Recovering full restitution does not actually punish violators because they only surrender unlawfully gained profits, and the effort requires significant investment of resources from the Attorney General’s Office. The strong penalties will deter violations without requiring costly litigation.
HB 2072 passed off the floor with bipartisan votes of 59-37 and 29-20. Opponents of the bill spoke on the floor about concerns related to giving the Attorney General’s Office too much enforcement power.
Washington now joins other states, red and blue, including Florida, Vermont, Illinois, California, Texas and New York, among others, that have significant penalties for antitrust violations.
Despite low penalty, Washington a leader in antitrust enforcement
Ferguson’s antitrust division has been recognized as a national leader. On February 14, 2023, Law 360 ran an analysis piece with the headline “Washington AG Making National Name as Antitrust Champion.” Recent highlights of their enforcement work include the following:
- The Washington Attorney General’s Office is in the process of returning $40.6 million in restitution to Washingtonians as a result of successful antitrust lawsuits against large chicken and tuna corporations that engaged in price-fixing.
- The Washington Antitrust Division eliminated “no-poach” clauses in 237 corporate franchises that operate in Washington. No-poach agreements are, in essence, non-compete clauses for employees within a corporate franchise chain that the employee never sees because the agreement is between the franchise owner and the corporation. A no-poach clause prohibits franchises from hiring employees of another franchise within the same corporate chain, meaning franchise locations do not have to compete for employees by offering better wages or positions. The division eliminated these agreements at all 237 corporations nationwide. An economist estimated that this work increased pay for millions of workers across the country by an average of 3% — a total increase of billions in additional compensation.
- As a result of the attorney general’s price-fixing investigation, Amazon shut down its “Sold by Amazon” program nationwide. The “Sold by Amazon” program allowed the online retailer to agree on prices with third-party sellers, rather than compete with them. Ferguson’s lawsuit asserted that the program violated antitrust laws. Amazon unreasonably restrained competition in order to maximize its own profits off third-party sales. This conduct constituted unlawful price-fixing.
- Ferguson’s Antitrust Division took on price-fixing conspiracies among foreign manufacturers of LCD screens and cathode ray tubes — the components of television and computer monitor screens. These lawsuits netted more than $63 million in restitution that Ferguson sent to more than 30,000 Washington consumers and businesses harmed by these schemes.
Every legislative session Attorney General Ferguson introduces a slate of Attorney General Request bills. The majority pass with bipartisan support. More on the history of this work is available here.
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