Attorney General Becerra Urges the U.S. Department of Agriculture to Alter Proposed Rule that Could Legitimize Anticompetitive Behavior

SACRAMENTO – California Attorney General Xavier Becerra today joined a multistate coalition of 8 attorneys general, led by Minnesota, in submitting comments to the U.S. Department of Agriculture (USDA) urging the agency to reconsider a proposed rule that would weaken antitrust protections and could exacerbate destructive anticompetitive behavior within the meat-packing and processing industry. The rule undermines important protections offered under the Packers and Stockyards Act of 1921 (the Act) by establishing a flawed set of criteria that could be used by the United States Secretary of Agriculture (the Secretary) when determining whether an undue or unreasonable preference or advantage exists. In today’s comment letter, the coalition opposes one part of the rule and urges USDA to adopt stronger guidelines that would better curb anticompetitive practices.
 
“Hard-working families making an honest living deserve to be safeguarded from the harms of anticompetitive behavior,” said Attorney General Becerra. “Today we are asking USDA to establish guidelines that will prevent and punish monopolistic business practices, not enable them. We owe it to the people of California to promote and preserve competitive fairness for all.”
 
The attorneys general argue that one part of the rule, consisting of the addition of one ill-defined standard, will allow members of the industry to evade consequences for their actions. There are currently four major meat processing companies that control more than 50 percent of the United States’ meat market. The coalition contends that the vague criteria proposed by USDA will allow companies like these to continue engaging in anticompetitive practices because they are already “customary in the industry.” In the letter, the attorneys general recommend that USDA rescind the proposed rule and instead adopt stricter, more specific criteria for evaluating violations under the Act.
 
Attorney General Becerra has made it a priority to protect consumers and to keep California markets competitive. In June 2019, Attorney General Becerra filed a lawsuit to block the proposed merger of telecommunication companies T-Mobile and Sprint over concerns it would result in fewer choices and higher service costs for consumers across the state and announced a settlement resolving that litigation earlier this week. In December 2019, Attorney General Becerra secured a historic $575 million settlement against Sutter Health, the largest hospital system in Northern California, for anticompetitive practices that resulted in higher healthcare costs for Northern Californians. During that same month, he also announced a $23 million settlement from 52 auto parts manufacturers for antitrust law violations that arose from illegal bid rigging in response to requests for bids from automakers. In August 2018, Attorney General Becerra opposed Bayer’s purchase of the Monsanto Company, a mega-merger greatly impacting consumer’s food choices and budgets. In 2017, Attorney General Becerra sued Valero Energy Corporation to stop the oil giant from acquiring the last independent petroleum distribution terminal in Northern California and obtained a final judgement prohibiting the transaction.
 
In submitting the comment letter, Attorney General Becerra joined the attorneys general of Minnesota, Illinois, Iowa, Nevada, New Mexico, Virginia, and the District of Columbia. 
 
A copy of the USDA comment letter is available here.