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6h ago

DOJ and FTC Back States' Antitrust Case Against Asset Managers Over Coal Market Coordination

The federal agencies filed their first-ever court statement on antitrust risks of common shareholdings, supporting claims that BlackRock, State Street, and Vanguard manipulated coal output under ESG policies.

A trader works as a screen displays the trading information for BlackRock on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 14, 2022. REUTERS/Brendan McDermid/File Photo
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Overview

  • The U.S. Department of Justice and Federal Trade Commission filed a statement of interest in support of a lawsuit led by Texas and 11 other Republican-led states against BlackRock, State Street, and Vanguard.
  • The lawsuit alleges that the asset managers coordinated coal output reductions by leveraging their common shareholdings in competing companies, driving up energy prices and violating antitrust laws.
  • This marks the first federal court filing by the DOJ and FTC addressing antitrust concerns related to common shareholdings, signaling heightened scrutiny of passive investment strategies.
  • The federal agencies emphasized that competition in coal markets is essential for energy security, economic stability, and consumer protection against rising electricity costs.
  • The case, filed in the Eastern District of Texas, is pending a ruling on the defendants' motion to dismiss, with a hearing scheduled for early June.