US business sectors learned from the banking industry. Yeah you get caught occasionally by the government and fined but the fines are just a cost of business of illegal or border line illegal activities that lead to bigger profits. CEOs will not stop until a few are jailed methinks.
After years of consolidation, US industries are now using advances in algorithms and the speed of data sharing to remove any vestige of market forces that are supposed to keep prices down.
In attempts to maneuver around antitrust restrictions, companies turn to data firms offering software that helps increase profits. How? By exchanging information with competitors in order to keep wages low and prices high – effectively creating national cartels.
The US Department of Justice might finally be waking up to the problem. According to Bloomberg Law:
The department’s antitrust division is withdrawing—with no plans to replace—a trio of policy statements outlining permissible conduct related to information sharing in the healthcare industry issued between 1993 and 2011, Principal Deputy Attorney General Doha Mekki said Thursday [Feb. 2] at an antitrust conference in Miami.
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> These safe harbor statements have been broadly interpreted by health care and other sector companies to share information.
Last year the DOJ fined a group of major poultry producers $84.8 million. More significantly, it ordered an end to the exchange of compensation information, banned the data firm (and its president) from information-sharing in any industry, and prohibited deceptive conduct towards chicken growers that lowers their compensation. Neither the poultry groups nor the data consulting firm admitted liability.
How about in real estate, where Americans spend more than 30 percent of their income on rent? According to a January Moody’s report, the US is now officially a rent-burdened nation:
The national average rent-to-income (RTI) reached 30% for the first time in our 20+ years of tracking history, up 1.5% from year-ago or 0.2% from Q3, keeping the growth rate constant throughout the second half of last year.
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> Rising mortgage rates caused many households to be priced out from home buying and would-be buyers to remain renters. Apartment demand surged as a result and drove rates sky high. As the disparity between rent growth and income growth widens, American’s wallets feel financial distress as wage growth trails rent growth.