The Federal Trade Commission has filed a civil suit in this building-boom town alleging that four steel companies have conspired to unlawfully restrict and control the sales of reinforced steel bars and other materials used in reinforced concrete construction.
The FTC suit says the companies have been setting prices, dividing the market and rigging bids, among other actions from 1969 to the present in violation of a 1951 FTC administrative cease and desist order. The current suit asks for the maximum penalty of $10,000 per day.
The suit was filed Monday against Armco Steel Co. and United States Steel Corp., which were among more than 100 companies governed by the 1951 order against the membership of the American Iron & Steel Institute for activities nationwide.
The four companies now being sued were among nine steel producers and nine steel executives fined last year following their filing of no-contest pleas for price fixing in Texas and other states involving the same products, according to FTC compliance attorney R. Baylor Rowe. He wouldn't elaborate.
Rowe said the only previous use of the 1951 FTC order was a suit filed in 1974 in Washington D.C., against two steel companies, involving different products. That action has yet to be tried, he said.
The current suit charges that the four companies all of which either have offices or do business in the southern judicial district of Texas (which includes Houston), engaged in "a series of planned common course of action" in violation of the 1951 order.
The suit says these actions included:
Raising or stablizing the price of reinforced bars and other materials sold in Texas and other states.
Requiring independent fabricators to limit price quotations and bid submissions for the steel bars to construction projects requiring no more than a specified tonage of them.
Allocating contracts on the basis of assigned percentages of the market.
Maintaining uniform weight and measures of the materials "in order to fix and support the price".
Maintaining arrangements to structure and facilitate "rigged and collusive bids" for the sale of the bars.
Engaging in other arrangements unlawfully restricting and controlling competition.
The materials in question include one-quarter-inch to one-and-one-half-inch round and deformed reinforcing steel bars, steel wire mesh in various gauges, steel bar supports and accessories used in reinforced concrete construction.
The $10,000 maximum fine was $5,000 per day before and amendment to the Federal Trade Act in 1973.