California-based tuna giant Bumble Bee has agreed to plead guilty in a price-fixing scheme. According to a CNN news report, the company will pay a $25 million criminal fine after pleading guilty for its role in a conspiracy to fix the prices of cans and pouches of tuna in the United States. U.S. Department of Justice officials filed a felony charge in U.S. District Court saying Bumble Bee and its co-conspirators agreed to fix, raise and maintain prices of packaged seafood between 2011 and 2013 after several meetings and conversations with representatives of other major packaged seafood firms.
Bumble Bee has said it has fully cooperated with the DOJ investigation and accepts complete responsibility for earning back the trust of consumers. It has promised to “act with integrity and transparency in every way” it operates its business. The company’s general counsel said Bumble Bee has hired a chief compliance officer and has revised its internal policies. It’s still not clear how much the company overcharged consumers. Apparently, limited competition in the seafood industry has been an ongoing issue.
Price Fixing and How It Works
Price fixing is basically an agreement between producers, sellers or buyers of the same product or service to set prices at a certain level. The goal of price fixing is to coordinate pricing for the conspirators’ mutual benefit. Those engaged in the price fixing then push the price on goods or services as high as possible forcing consumers to pay inflated prices for these products. There are also cases where the purpose of price fixing is to drive a competitor out of business by significantly lowering prices so the competitor cannot match those reduced prices. Regardless of how the price fixing is done, it is illegal under both California and federal antitrust laws.
The Role of Class Action Lawsuits
When it comes to correcting unethical practices in corporate America, class-action lawsuits are a formidable weapon. Tort reform advocates tend to demonize class-action lawsuits as money-making machines for attorneys. While attorneys do get paid for winning class-action lawsuits, that is hardly their main purpose.
The goal of class action lawsuits is to give wronged consumers the opportunity to go after large corporations as a group and not only collect damages, but also to hold them accountable for unethical, or in some cases, criminal behavior. While one person may not have the time, money or resources to go after a large corporation, a group of consumers absolutely have that power.