By Naveen Athrappully
Contributing Writer
The Federal Trade Commission and the Department of Justice have filed a “statement of interest” in multi-state litigation that accuses asset managers BlackRock, State Street, and Vanguard of conspiring to restrict coal production, the FTC said in a Thursday statement.
A statement of interest is typically used by government entities to express their perspective in a legal argument without formally intervening in the suit.
The lawsuit was initially filed on Nov. 27 last year in the U.S. District Court for the Eastern District of Texas, Tyler Division, by 11 states led by Texas.
In the complaint, the states alleged that BlackRock, State Street and Vanguard acquired “substantial stockholdings in every significant publicly held coal producer in the United States” over several years, thus gaining enough power to control company policies, Texas Attorney General Ken Paxton’s office said in a statement at the time.
According to the statement, the asset managers, which, combined, control around $25 trillion in investor funds, announced in 2021 their intent to “weaponize their shares” in the coal companies to push forward “green energy” goals. Their goal was reportedly to cut down coal production within their companies by more than 50% by the end of this decade.
Cutting down production impacts market prices. “Deliberately and artificially constricting supply increased prices and enabled the investment companies to produce extraordinary revenue gains,” the statement reads.
The three companies’ actions ended up raising electricity costs for Americans, it adds.
In the Thursday statement of interest filed at the same court, the FTC and DOJ affirmed that “asset managers and institutional investors may be held liable under Section 7 of the Clayton Act when they use their stock holdings in multiple competitors to achieve anticompetitive goals.”
The Clayton Antitrust Act of 1914 prohibits unethical corporate behavior, including predatory or discriminatory pricing, price fixing and monopolies.
Even though the three asset managers play a key role in America’s capital markets, they “nonetheless remain subject to the same antitrust laws as everyone else,” the FTC said.
Commenting on the latest development, FTC Chairman Andrew Ferguson said the companies “allegedly blocked the production of American coal in the name of climate change scaremongering, all so they could take money out of the pockets of American consumers and put it in theirs.”
“President Donald Trump understands the importance of coal for our energy security and has vowed to fight left-wing ideologues who seek to make us weaker and poorer under the guise of ESG,” he said in a statement, referring to the environmental, social, and governance framework used in assessing how companies carry out sustainability efforts.
“Today, the Federal Trade Commission carries out this administration’s mission to unleash American energy dominance, protect coal, and stop the left’s attempt to corrupt financial markets with political and social objectives.”
Alexander Williams, a spokesperson for BlackRock, previously said that the suggestion that BlackRock invested money in companies with the goal of harming these businesses was “baseless and defies common sense.”
“BlackRock’s holdings in energy companies are regularly reviewed by federal and state regulators,” he said. “We make these investments on behalf of our clients, and our focus is on delivering them financial returns.”
Kevin Stocklin contributed to the report.
