Clifford Chance

The Department of Justice has announced that it would be working with domestic and international partners to further scrutinize collusive conduct relating to the ongoing pandemic-related supply chain issues.

The U.S. DOJ unveiled a new initiative Thursday to "deter, detect and prosecute those who would exploit supply chain disruptions to engage in collusive conduct."

In a statement, AAG Jonathan Kanter said that "temporary supply chain disruptions should not be allowed to conceal illegal conduct" and that "the Antitrust Division will not allow companies to collude in order to overcharge consumers under the guise of supply chain disruptions."

Domestically, the DOJ's Antitrust Division will work with the FBI to prioritize existing investigations into conduct where parties may be exploiting the supply chain crisis and to "proactively investigate" related collusion in certain industries that may be particularly affected by those disruptions, such as agriculture.

"It's important for us to ask questions about whether all of these increases, every penny of these increases, is justified based on disruptions, based on supply, based on the normal economics," said Agriculture Secretary Tom Vilsack. "And if they are not, then shame on anybody who is trying to take advantage of the circumstance."

Further, the DOJ announced that it would be forming a working group with competition authorities in Australia, Canada, New Zealand, and the UK to develop and share intelligence to detect and investigate suspected anti-competitive behavior and collusion.

"We want to be clear: we have zero tolerance for any attempts to use pandemic-related supply chain disruptions as a cover for criminal collusion that harms consumers and damages [the] economy," Matthew Boswell, Canada's Commissioner of Competition, said.

The announcement and formation of the working groups are an important reminder that companies should ensure that their supply chains are acting within the bounds of the law, including US and international antitrust laws. Further, the announcement underscores the importance of supply chain due diligence as companies must monitor all aspects of their supply chain, including human rights, as this Administration continues to underscore the connection between national security and supply chains.