The FTC chairman accused the companies of hampering coal production ‘in the name of climate change scaremongering.’
The Federal Trade Commission (FTC) and the Department of Justice (DOJ) have filed a “Statement of Interest” in a multi-state litigation that accuses asset managers BlackRock, State Street, and Vanguard of conspiring to restrict coal production, the FTC said in a May 22 statement.
A “Statement of Interest” is typically used by government entities to express their perspective in a legal argument without formally intervening in the suit.
The lawsuit was initially filed on Nov. 27 last year in the U.S. District Court for the Eastern District of Texas, Tyler Division, by 11 states led by Texas.
In the complaint, the states alleged that BlackRock, State Street, and Vanguard acquired “substantial stockholdings in every significant publicly held coal producer in the United States” over several years, thus gaining enough power to control company policies, Texas Attorney General Ken Paxton’s office said in a statement at the time.
According to the statement, the asset managers, which, combined, control around $25 trillion in investor funds, announced in 2021 their intent to “weaponize their shares” in the coal companies to push forward “green energy” goals. Their goal was reportedly to cut down coal production within their companies by more than 50 percent by the end of this decade.
Cutting down production impacts market prices. “Deliberately and artificially constricting supply increased prices and enabled the investment companies to produce extraordinary revenue gains,” the statement reads.
The three companies’ actions ended up raising electricity costs for Americans, it adds.
In the May 22 “Statement of Interest“ filed at the same court, the FTC and DOJ affirmed that “asset managers and institutional investors may be held liable under Section 7 of the Clayton Act when they use their stock holdings in multiple competitors to achieve anticompetitive goals.”
The Clayton Antitrust Act of 1914 prohibits unethical corporate behavior, including predatory or discriminatory pricing, price fixing, and monopolies.
Even though the three asset managers play a key role in America’s capital markets, they “nonetheless remain subject to the same antitrust laws as everyone else,” the FTC said.
