My take: Feds take closer look at criminal monopoly actions

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A criminal conviction in Big Sky Country may serve as a warning for businesses wishing to engage in classic monopolistic practices.

Back in October, an executive for a company that does highway crack sealing pleaded guilty in federal court to charges.

According to the U.S. Justice Department, the company’s owner approached a competitor about a “strategic partnership” in return for the other company not competing for sealing work in Montana and Wyoming.

Click here for the release announcing further details that included payment to the competitor.

What’s significant about the Montana crack-sealing action is that it marks the first time in decades that the Justice Department has pursued such a case, at least as a criminal matter.

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It is also a signal that the Biden Administration will pursue monopoly cases on a broader front.

The potential for similar cases may become more difficult as private equity swoops in and acquires smaller companies, sometimes at eye-popping prices.

In order to pay for the cost of buyouts, private equity owners see the potential to raise prices, reduce back-office costs and legally reduce competition through buyouts in adjoining areas that create a regional or national footprint.

Then again, fewer competitors may mean more scrutiny when only one or two bids are received.

Long-term, the key to leveling the playing field is the ability of entrepreneurs to gain funding to launch a company capable of taking on the giants. That requires a strong business climate and the ability to access financing.

With interest rates on the rise, achieving that goal is considerably more difficult these days, something the Federal Reserve, the Biden Administration and others need to keep in mind. – Doug Rainey, chief content officer.

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