The heavy price of economic collusion
Collusion is illegal in the U.S. and many other countries. You can sometimes pay a heavy price.
In March 2016, the U.S. Department of Justice charged Aubrey K. McClendon, a former CEO of Chesapeake Energy with collusion:
Aubrey K. McClendon has been charged by a federal grand jury with conspiring to rig bids for the purchase of oil and natural gas leases in northwest Oklahoma, the Department of Justice announced today.
The indictment alleges that McClendon orchestrated a conspiracy between two large oil and gas companies to not bid against each other for the purchase of certain oil and natural gas leases in northwest Oklahoma. During this conspiracy, which ran from December 2007 to March 2012, the conspirators would decide ahead of time who would win the leases. The winning bidder would then allocate an interest in the leases to the other company. McClendon instructed his subordinates to execute the conspiratorial agreement, which included, among other things, withdrawing bids for certain leases and agreeing on the allocation of interests in the leases between the conspiring companies.
Next day, McClendon died in a car crash. CNBC reported
[He was] driving alone and traveling very fast when his car “drove straight into” an overpass wall, according to the Oklahoma City Police Department. His 2013 Chevy Tahoe was immediately engulfed in flames and investigators concluded he was not wearing a seatbelt.
A very heavy price, indeed.
In 2007, British Airways paid a fine of £270m for colluding with Virgin.
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