The Justice Department's Antitrust Division is studying new ways to deal with "lock-step" pricing in industries dominated by a few large firms, Attorney General Griffin B. Bell said last night.
Acnowledging that there have been few successful antitrust prosecutions of "oligopoly pricing," Bell said he has asked his antitrust experts for "innovative, creative thinking" to combat "price-fixing disguised as independent, parallel action."
In remark prepared for an address before the Harvard Law Review, Bell said an example of such a pricing arrangement was found in sales of large electrical generators. He said General Electric and Westinghouse, the only American firms in the business, had maintained a "price-fixing conspiracy" even though they had no explicit agreement on prices.
Although Bell did not mention other instances, economists have noted patterns of "oligopoly pricing" in the automobile, steel, tobacco, oil and sugar refining industries.
In such industries, Bell explained, the major manufacturers keep close tabs on any price changes instituted by their competitors.
"Price reductions - and, much more common, price increases - are followed by most or all major firms. In other words, the firms take parallel action . . . noncompetitive pricing is the result."
The Attorney General said that such circumstances encourage regular price increases but provide few incentives for lower prices.
If a manufacturer raises his price, Bell said, he will probably not lose sales because he can expect his competitors to follow suit. But lowering prices will not mean increased sales, because competitors are apt to match the reduction.
Parallel price increases in such industries are difficult to prosecute under antitrust laws, Bell said, because there is no explicit agreement the firms - as Bell put it, no "smoking gun" - to introduce as evidence of collusion.
Even if such cases could be prosecuted, Bell added, courts migt have trouble finding a legal remedy that would assure independent price-setting decisions by the dominant firms in an industry.
But he said development of new methods of prosecution and new remedies - possibly including price-setting orders by judges - would be an important priority for the Justice Department during his tenure.
Bell also reiterated his determination to seek "stiff prison sentences" for corporate officials convicted of antitrust violations.
"I believe hard-core price-fixing is a serious crime and should be prosecuted accordingly," he said.
Antitrust violators have rarly been sentenced to prison. In fiscal 1976, the Justice Department gained guilty verdicts or no-contest pleas in 30 cases; only one resulted in incarceration.
Bell expressed again his impatience will complicated antitrust cases that drag on for years. He said he will try to develop procedures for speeding up antitrust trials.