Competition Matters

A brutal winter like the one that has gripped Ohio and much of the nation this year makes cities, counties, townships, and other governmental entities rely even more heavily than usual on their purchases of one particular product: rock salt. Because rock salt is widely accepted as the most cost-effective means of treating icy roads, public purchasers have very little choice when the price goes up but to take money from other parts of their budgets for salt purchases. The fact that it is impractical for buyers to purchase less of a product when the price goes up is one factor that can make the product especially susceptible to bid-rigging and other forms of anticompetitive vendor behavior.
 
It is that kind of scenario that Ohio Attorney General Mike DeWine described in his complaint against rock salt sellers Morton Salt Inc. and Cargill Inc., filed March 21, 2012, in Tuscarawas County Common Pleas Court. The complaint alleges that Morton and Cargill, operators of the only two Ohio salt mines, conspired to divide up Ohio public entity customers between themselves for more than a decade beginning about 2000. It also alleges the two companies provided sham (purposefully losing) bids on public entity accounts in order to give the appearance they were competing against each other when in reality they had predetermined which company would win which accounts. According to the Attorney General’s filing, public entities were overcharged because they had no alternative but to pay the increased prices charged for rock salt as a result of these companies’ scheme to refrain from competing against each other.
 
Defendants Morton and Cargill asked the court in May 2012 to dismiss the Attorney General’s conspiracy case against them, but the judge refused. The case is currently set for trial in November.