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Justice Department to investigate companies exploiting supply chain snafus

Boxes are stacked up inside a warehouse in Santa Teresa, N.M.
The Justice Department on Thursday announced a new initiative to identify companies that are exploiting ongoing supply chain disruptions in the U.S. for increased profits. Pictured: Boxes stacked up in a warehouse in Santa Teresa, N.M., in November.
(Connor Sheets / Los Angeles Times)
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The Justice Department announced on Thursday it was launching an initiative to identify companies that are exploiting supply chain disruptions in the U.S. for increased profits in possible violation of antitrust laws.

The program, spearheaded by the Justice Department’s antitrust division and the FBI, comes amid supply chain problems and labor shortages that have plagued retailers since the COVID-19 pandemic began.

The supply chain issues have left an opportunity for companies to fix prices and overcharge customers, the Justice Department said.

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“Temporary supply chain disruptions should not be allowed to conceal illegal conduct,” Asst. Atty. General Jonathan Kanter of the Justice Department’s Antitrust Division said in a statement.

The FBI will prosecute antitrust violations, including agreements between individuals and businesses to fix prices or wages, the Justice Department said.

Justice Department officials said they were also going to work closely with their counterparts in other countries — including Canada, Great Britain, Australia and New Zealand — to address the problem.

Economists have said supply chain woes have contributed to rising inflation. The Biden administration has sought to untangle supply chains, focusing much of the government’s attention on U.S. ports. In California, just before the holidays, dozens of vessels were seen idle off the coast. By November, 78 ships clogged San Pedro Bay.

Officials have said the situation is improving, but the Port of Long Beach is still dealing with a backlog of waiting cargo vessels.

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