The Department of Justice’s Antitrust Division has its sights set on anticompetitive conduct in the ready-mix concrete industry.
In the latest enforcement action, cement manufacturer Argos USA on Monday agreed to pay a $20 million criminal penalty to resolve charges brought by the Antitrust Division for the company’s participation in a conspiracy to fix prices, rig bids, and allocate markets for sales of ready-mix concrete in the Southern District of Georgia and elsewhere.
The details: Argos employees coordinated with other ready-mix concrete companies through “the issuance of price-increase letters to customers, allocating specific ready-mix concrete jobs in the coastal Georgia area, charging fuel surcharges and environmental fees, and submitting bids to customers at collusive and noncompetitive prices,” the DOJ said. The conduct began as early as 2010 and continued until about July 2016.
Compliance implications: Argos entered into a deferred prosecution agreement (DPA) with the Antitrust Division, under which the company admitted to participating in the conspiracy and agreed to maintain a compliance and ethics program designed to prevent and detect antitrust violations, including conducting specific antitrust training for Savannah-area employees and terminating the employees who participated in the illegal conduct at issue.
Additionally, Argos’ senior leadership “will work to foster a culture of compliance” and “will be held accountable for failures” in the company’s antitrust compliance program. At least one senior leader “with sufficient background and competence in antitrust law” will be assigned responsibility for the implementation and oversight of the antitrust compliance program and “will be provided with sufficient autonomy, authority, and seniority within the company’s governance structure to effectuate the compliance program.”
From an incentives and discipline standpoint, “the importance of antitrust compliance must be reflected in the company’s employee evaluation, incentive, and compensation structure,” according to the DPA’s terms. Employees, managers, and senior executives must be disciplined as appropriate for antitrust compliance failures. The DPA also requires Argos to conduct periodic risk-based reviews and submit annual reports to the Division regarding the remediation and implementation of its compliance program.
Enforcement trend: Argos is the second company charged in this matter. In September 2020, a federal grand jury in the U.S. District Court in Savannah returned an indictment against Evans Concrete and four individuals for their roles in the price-fixing, bid-rigging scheme. Argos has agreed it will cooperate fully with the Antitrust Division’s ongoing criminal investigation and prosecution of others involved.
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