A New York waste-hauling cartel exchanged texts about bid rigging, allocating customers, and fixing prices. The texts ultimately helped lead to criminal and civil penalties for the participants.
In April of this year, two New York firms, Bert Adams Disposal Inc. and Taylor Garbage Service Inc., admitted to colluding to rig bids, allocate customers, and fix prices for waste hauling and recycling services. The companies’ collusive agreements spanned from July 2014 to May 2016.
The owners of Taylor Garbage and Bert Adams Disposal memorialized the creation of their cartel over text. One owner asked the other if he “would be willing to sit down sometime […] and talk about things in the battle field [sic].” He continued, “I’d like to try to work out a plan to work with each other rather than working against each other.
Because the customer is the only one that wins when we’re at each other’s throat” (emphasis added). Those customers were cities, townships, and other public purchasers, as well as private customers.
The cartel that was created with those text messages went on to cost New York taxpayers a significant amount of money. Rather than setting competitive prices, the two firms would coordinate price increases. One owner texted the other, asking, “Did I hear a rumor that your [sic] going to raise your residential rates?” to which the other responded, “Yes but I’ll tell you when and how much.”
In addition to coordinating prices, the companies protected each other’s ability to raise prices, often deceiving customers in the process. They would either decline to provide quotes to prospective customers or give prospective customers inflated bids. In one text exchange, an employee of one firm told the other what a specific prospective customer was paying. The other firm then relayed that they’d quoted that customer a higher amount.
The actions of this waste industry cartel deprived the public of free competition and forced customers to pay higher prices, and their texts helped the New York Attorney General secure criminal convictions and civil resolutions against the cartel. The majority owner of Bert Adams Disposal pleaded guilty to a charge of “combination in restraint of trade and competition.” He agreed to pay $75,000 in criminal penalties as part of his plea deal. Bert Adams Disposal itself also pleaded guilty and was required to pay $850,000 in criminal penalties.
Taylor Garbage Service confessed early on to the anticompetitive conduct and cooperated, resulting in more lenient settlement terms. Taylor Garbage Service and its president will each pay civil penalties to New York State, the former paying $500,000 and the latter paying $50,000.
If you suspect that any of your vendors may be engaging in a scheme like this one,
contact the Ohio Attorney General’s Antitrust Section.