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Of course I'm happy to see the bad guys get caught. I just wonder when it will occur to the Department of Justice that there might be a similar reason why you simply cannot get a competitive deal on cell phones, cable TV or broadband. Maybe they should take a closer look at them, too. It would certainly make me want to vote for any administration that broke those monopolies!
(Reuters) - Under the direction of CEO Aubrey McClendon, Chesapeake Energy Corp. plotted with its top competitor to suppress land prices in one of America's most promising oil and gas plays, a Reuters investigation has found.
In emails between Chesapeake and Encana Corp, Canada's largest natural gas company, the rivals repeatedly discussed how to avoid bidding against each other in a public land auction in Michigan two years ago and in at least nine prospective deals with private land owners here.
In one email, dated June 16, 2010, McClendon told a Chesapeake deputy that it was time "to smoke a peace pipe" with Encana "if we are bidding each other up." The Chesapeake vice president responded that he had contacted Encana "to discuss how they want to handle the entities we are both working to avoid us bidding each other up in the interim." McClendon replied: "Thanks."
That exchange - and at least a dozen other emails reviewed by Reuters - could provide evidence that the two companies violated federal and state laws by seeking to keep land prices down, antitrust lawyers said.
"The famous phrase is a ‘smoking gun.' That's a smoking H-bomb," said Harry First, a former antitrust lawyer for the Department of Justice. "When the talk is explicitly about getting together to avoid bidding each other up, it's a red flag for collusion, bid-rigging, market allocation."
[...] The talks to suppress land prices could prove even more damaging - for McClendon, Chesapeake, Encana and other top executives with both companies.
Private industry cartels are forbidden in the United States, where price-fixing between competitors is illegal under the Sherman Antitrust Act. Violations carry stiff penalties. Companies can be fined up to $100 million and individuals up to $1 million for each offense. Jail sentences - which are rare - can be as long as 10 years, and collusion among competitors can lead to prosecution or fines for mail and wire fraud. Victims of bid-rigging can also seek triple the amount of damages.