U-Haul International Inc. today settled charges brought by the Federal Trade Commission that it tried to fix prices for truck rentals with its closest competitor.
U-Haul and its parent company Amerco were charged with violating Section 5 of the FTC Act for inviting Avis Budget Group, Inc. to collude on prices between 2006 and 2008. Together, the two companies account for 70% of the one-way truck rental market.
The FTC did not allege the companies actually entered into an agreement to collude.
According to the complaint, which was filed as an administrative proceeding, U-Haul Chairman Edward Shoen instructed regional managers to raise prices and then contact Budget and encourage the rival company to follow suit.
For example, Shoen wrote in a 2006 memo, “Budget continues in some markets to undercut us on One- Way rates. Either get below them or go up to a fair rate. Whatever you do, LET BUDGET KNOW. Contact a large Budget Dealer and tell them.”
The complaint also alleges that Shoen again invited Budget to collude in 2008 after Budget declined to match U-Haul’s price increases – this time, during a conference call with industry analysts.
Unlike actions brought under the Sherman Antitrust Act, invitations to collude do not require proof of an agreement; nor do they require proof of an anticompetitive effect.
U-Haul was represented by Geoffrey Oliver of Jones Day and did not admit to any of the allegations in the complaint. The terms of the settlement bar U-Haul and Amerco from colluding or inviting collusion. The order also includes monitoring and compliance provisions.
“It’s a bedrock principle that you can’t conspire with your competitors to fix prices – and shouldn’t even try. Consumers deserve better,” said FTC Chairman Jon Leibowitz in a statement. “The order announced today will ensure that U-Haul will not try it again.”
Comments