Getting Tougher with the Monopolists

The Antitrust Division of the Justice Department has announced that the former president of a paving and asphalt company based in Montana has pleaded guilty to criminal charges of attempting to monopolize the market for highway crack-sealing services in that state and Wyoming.

It is encouraging to see DOJ take aggressive action against an individual executive, especially since this action was the first criminal case to be brought under the Section 2 anti-monopoly provisions of the Sherman Act in decades.

Yet it is difficult to get too excited about the case, given that it involves a pretty small culprit in a minor market. DOJ should set its sights higher.

In doing so, prosecutors may want to look back at a case that shook up the corporate world 60 years ago. In what became known as the great electrical equipment conspiracy, dozens of executives from companies such as Westinghouse and General Electric were charged with colluding to fix prices and rig bids in the sale of transformers and other gear to industrial customers.

The defendants included a variety of vice presidents, division managers and other fairly high-level managers in the companies. Faced with incontrovertible evidence gathered by the DOJ during the Eisenhower Administration, they pleaded guilty or no contest and threw themselves on the mercy of the court. As Time magazine reported in 1961, defense attorneys argued for leniency:

One by one, as the sentencing went on, lawyers rose to describe their clients as pillars of the community. William S. Ginn, 45, vice president of General Electric, was the director of a boys’ club in Schenectady, N.Y. and the chairman of a campaign to build a new Jesuit seminary in Lenox, Mass. His lawyer pleaded that Ginn not be put “behind bars with common criminals who have been convicted of embezzlement and other serious crimes.”

Federal District Judge J. Cullen Ganey was not swayed. He sentenced Ginn and half a dozen other defendants to 30-day jail sentences, while many of the others received suspended sentences for reasons of age or health. A month was not a long stretch, but it was shocking at the time to see prominent businessmen being led off in handcuffs. In fact, it was the first time in the 70 years following the enactment of the Sherman Act that executives of large companies were incarcerated for antitrust offenses.

In the ensuing years, DOJ vacillated in its position on individual criminal charges for cartel activity. In the 1970s Congress revised the Sherman Act to allow violations to be prosecuted as felonies rather than just misdemeanors, but those provisions were not always applied.

Today the Antitrust Division regularly brings charges against individuals under Section 1 of the Sherman Act for price-fixing and bid-rigging, but the case volume is low and the sentences are not much harsher than those meted out by Judge Ganey. Moreover, the defendants in those cases are rarely high-level executives at large companies.

DOJ’s new willingness to bring Section 2 criminal cases is encouraging, but in order to shake up the business world the way the electrical equipment prosecutions did, the Antitrust Division will have to take aim at high-level executives at some of the mega-corporations that dominate our economy.

Poultry Concentration and Collusion

In the debate over the causes of today’s persistent inflation, corporate profiteering tends to get put far down on the list, well below factors such as supply-chain bottlenecks and the war in Ukraine. While corporate practices may not be the primary driver of rising prices, they are something government officials can actually do something about.

In fact, they already are trying to do so. One of the primary arenas is agribusiness, especially poultry processing. For instance, the Washington State Attorney General just announced that Tyson Foods has agreed to pay more than $10 million to settle its role in a lawsuit alleging that a dozen broiler chicken producers conspired to manipulate prices.

The U.S. Justice Department has also been targeting the broiler producers. It has run into difficulty proving its allegations against specific executives and has dropped a slew of individual charges. That doesn’t necessarily mean price fixing hasn’t been occurring. One of the major corporate defendants, Pilgrim’s Pride, pled guilty to criminal charges and paid a penalty of $107 million.

DOJ’s case against the chicken industry is not a response to recent inflation. It is an attempt to address many years of inflated prices resulting from collusion among a small group of companies in a highly concentrated industry.

Whatever happens with the government’s case, the industry is still facing a slew of private antitrust lawsuits that have been consolidated in federal court in Illinois. Last May, the judge presiding over the sprawling case certified three classes of plaintiffs: direct purchasers, indirect purchasers and end-user consumers. The plea by Pilgrim’s Pride in the DOJ case will make it much easier for the various plaintiffs to win substantial relief beyond the several hundred million dollars already paid out in partial settlements.

Chicken producers have also been accused of anti-competitive employment practices. In July, Cargill Meat Solutions, Sanderson Farms and Wayne Farms agreed to pay a total of $84.8 million to settle a civil antitrust case alleging that they engaged in a long-running conspiracy to depress wages by improperly exchanging information and coordinating their pay practices. A court-appointed monitor will oversee their behavior over the next decade.

The potential for future collusion, however, is now greater. Over the summer, a joint venture of Cargill and Continental Grain, the parent of Wayne Farms, acquired Sanderson and combined it with Wayne to form Wayne-Sanderson Farms. This deal creates another mega-producer alongside Tyson and Pilgrim’s Pride. The three will together control over 50 percent of the chicken market.

Diminished competition by itself serves to push prices higher. The effect is intensified in an industry whose dominant players have shown an inclination to engage in collusion as well. Anti-competitive practices by themselves do not account for mounting inflation, but they are a significant part of the story that deserves more attention—and more intervention by regulators and prosecutors.

The Pentagon Wakes Up to Arms Industry Concentration

Lockheed Martin’s decision to bow to pressure from the Federal Trade Commission and abandon its takeover of Aerojet Rocketdyne is a rarity. Such mergers among weapons producers were long encouraged by the Pentagon and approved by antitrust regulators. Bigger and more prosperous contractors were seen as being in the national interest.

This gave rise to a group of military leviathans. Along with Lockheed Martin, the result of the 1995 combination of Lockheed and Martin Marietta and the later addition of Sikorsky Aircraft, those giants include: Raytheon Technologies, which arose out of the 2020 merger of Raytheon and portions of United Technologies; Northrop Grumman, born out of the 1994 combination of Northrop Aircraft and Grumman Corporation; General Dynamics, formed from the 1950s merger of Electric Boat Company and Canadair; and Boeing, which gobbled up McDonnell Douglas in 1997.

Concentration, however, is no longer seen as a virtue in the arms industry. The Defense Department has just issued a report warning that the sharp reduction in competition among contractors is creating problems for the Pentagon. It points out that the number of aerospace and defense prime contractors is down from 51 in the 1990s to five today, making the military highly dependent on a very small number of producers in all categories of weapons systems.

This reduction in competition, the report argues, creates supply risks, increases costs and diminishes innovation: “Consolidations that reduce required capability and capacity and the depth of competition,” it states, “have serious consequences for national security.”

In place of the old approach of “bigger is better,” the report recommends heightening merger oversight, encouraging new entrants, increasing opportunities for small business, and hardening of supply chain resiliency.

For all its candor, one issue the report does not address is the checkered history of the big contractors in terms of honest dealing. They were all involved in numerous procurement scandals in the 1980s, the 1990s and into the 2000s. These ranged from massive cost overruns to cases of outright bribery.

The misconduct has continued. According to Violation Tracker, which covers cases back to 2000, the big five have paid more than $2 billion in fines and settlements in cases relating to government contracting—mainly violations of the False Claims Act. For example:

In 2006 Boeing paid $615 million to resolve criminal and civil allegations that it improperly used competitors’ information to procure contracts for launch services worth billions of dollars from the Air Force and NASA.

In 2008 General Dynamics agreed to pay $4 million to settle allegations that a subsidiary fraudulently billed the Navy for defective parts.

In 2014 a subsidiary of Lockheed Martin paid $27.5 million to resolve allegations that it overbilled the government for work performed by employees who lacked required job qualifications.

In 2009 Northrop Grumman agreed to pay $325 million to settle allegations that it billed the National Reconnaissance Office for defective microelectronic parts.

In 2008 Raytheon subsidiary Pratt & Whitney, then part of United Technologies, agreed to pay $50 million to resolve allegations it knowingly sold defective turbine blade replacements for jet engines used in military aircraft.

Now that the Pentagon is trying to reduce its dependence on giant contractors, it should also show less tolerance for corruption on the part of suppliers both large and small.

More Competition Is Only Part of the Solution

The executive order on competition issued by the Biden Administration earlier this month gave rise to headlines suggesting it was a direct assault on corporate power. The New York Times said the administration was stepping up its “mission to rein big business in.” The Wall Street Journal said the order “targets big business.”

There is no doubt that the order lays out an ambitious agenda to address anti-competitive practices in numerous areas of the economy. Coupled with the nomination of aggressive advocates to head the Federal Trade Commission and the Justice Department’s Antitrust Division, it creates momentum in dealing with the increasing dominance of large corporations over major portions of the economy.

Yet there are risks in relying too much on the idea of competition as the way to deal with all the harmful effects of modern capitalism. There are some areas in which we need less rather than more competition. After all, for example, the basic mission of the labor movement is to take wages out of competition.

Moreover, unions have traditionally had more organizing success among larger companies than smaller ones. Union density is higher at utilities, which are often monopolies, than any other industry. Utility workers are also better paid than most other blue-collar workers.

This is not, of course, true across the board. Giant corporations such as Walmart and Amazon have adamantly resisted unions and have thus been able to suppress wages. Some smaller firms have learned to live with unions.

There are also complications when it come to areas such as consumer protection. Some large companies use their market domination to keep prices high (example: cable TV providers), while others use theirs to drive their competitors out of business by keeping prices artificially low.

And if we look at employment and consumer issues at the same time, we’re confronted with the fact that large corporations may use the lack of competition to benefit customers at the expense of workers, or vice versa.

One thing I have learned in the course of gathering data for Violation Tracker is that corporate misconduct can be found in companies of all sizes. The database now contains more than 490,000 entries with total penalties of $669 billion. Of those cases, about one-fifth involve units and subsidiaries of large corporations. That leaves several hundred thousand smaller companies that have been implicated in abuses such as wage theft, employment discrimination, government contracting fraud, predatory lending, nursing home negligence, and toxic dumping.

The larger companies pay vastly much more in total fines and settlements, but it remains unclear whether in the aggregate they or smaller firms do more harm to workers, consumers and communities.

All of this is to say that more competition, while in many respects desirable, would not necessarily address all the ills of private enterprise. What we need are not just more players in the market, but better controls on all the players, whether they are mammoth corporations or more modest-sized operations.

Attacking Corporate Concentration on Multiple Fronts

Big Tech breathed a sigh of relief in late June when a federal judge dismissed antitrust complaints that had been filed against Facebook by the Federal Trade Commission and a coalition of state attorneys general.

That respite is proving short-lived. Although some of its enforcement powers were curtailed by the Supreme Court earlier this year, the FTC under its new chair Lina Khan is mapping out an aggressive approach. The commission, for example, recently voted to make greater use of techniques such as subpoenas to compel companies to provide evidence. It also voted to prioritize investigations into technology platforms and health businesses, two areas in which large corporations have too much power.

At the same time, the dismissal of the Facebook actions has given more impetus to moves in Congress to modernize and strengthen federal antitrust laws, most of which are now well over a century old. Bills are pending that would address Big Tech practices such as buying up smaller competitors and giving preference to their own services on the platforms they control.

A third front is at the state level, where attorneys general have shown no sign of being deterred by the Facebook setback. A group of 37 AGs just filed an antitrust suit against Google, alleging that it effectively forces users of Android mobile devices to purchase apps through its Play Store and collects extravagant commissions in the process.

This is just the latest in a series of antitrust actions filed against Google by the states and the U.S. Justice Department. The state actions are of particular interest because they involve AGs from across the political spectrum. Those bringing the new Google suit come not only from unsurprising states such as New York and California but also the likes of Florida, Mississippi, and Oklahoma. In fact, the lead states include Utah and Tennessee.

At a time when partisan gridlock dooms many policy initiatives in Washington, it is encouraging to see states of very different political stripes find common ground in addressing corporate abuses.

This is not an entirely new phenomenon. As my colleagues and I at the Corporate Research Project of Good Jobs First pointed out in a 2019 report, state AGs have banded together hundreds of times to bring multistate actions against a variety of abuses. In Violation Tracker, we document more than 600 successful cases of this type, which have resulted in penalties of over $112 billion.

These include more than 100 cases involving anti-competitive practices. Yet many of these concerned outright price-fixing, which is a serious offense but one that is often not relevant to tech companies that abuse their power in other ways.

Addressing monopoly control and other abuses related to concentration of power is supposed to be the purview of federal regulators, whose enforcement approaches have failed to keep up with changes in the economy.

We can still hope the FTC and the Justice Department’s Antitrust Division will reinvigorate themselves, but for now it is good to see the states step in to address corporate concentration.

The Many Sins of the Tech Giants

The 400-page report just published by the Democratic leadership of the House Judiciary Committee is a damning review of the anti-competitive practices of the big tech companies—Amazon, Apple, Facebook and Google’s parent Alphabet.

The report finds that in various portions of the digital world these companies have amassed what amounts to monopoly control and have not hesitated to use it crush or absorb competitors. Comparing the tech giants to the oil barons and railroad tycoons of the late 19th century, the report calls for aggressive measures such as breaking up the companies and doing more rigorous reviews of proposed mergers and acquisitions in the future.

Among the broader consequences of the rising power of the tech giants are, the report argues: a weakening of innovation and entrepreneurship, a decline in the number of trustworthy sources of news, and an erosion of safeguards for the privacy of personal information.

One aspect of the report that has not received much coverage is the brief discussion of the power of the tech giants in the labor market. This is especially relevant for Amazon, which as the report notes has become one of the largest employers in the country and is exercising monopsony power in sectors such as warehousing and “has wage-setting power through its ability to set route fees and other fixed costs for independent contractors in localities in which it dominates the delivery labor market. These entities are dependent on Amazon for a large majority—or even 100%—of their delivery business.”

Amazon has moved into the position previously held by Walmart—a shamelessly exploitative employer that depresses wages and worsens working conditions not only for its own workers but also for the entire sector in which it operates—and to some extent for the economy as a whole.

The report’s wide-ranging recommendations do not include any remedies for these labor issues, perhaps because they are outside the scope of the Judiciary Committee.

It is worth noting that there are already efforts underway to address the labor practices of the tech giants. Several unions as well as other groups are working with Amazon employees to agitate for better conditions, a process made more difficult by Amazon’s brazen anti-union practices and its widespread use of staffing services to evade its employer responsibilities.

There are also class-action lawsuits challenging unfair employment practices by Amazon and other tech giants. For example, Facebook recently agreed to pay $1.65 million to resolve litigation alleging that it misclassified workers to deprive them of overtime pay.  A few years ago, Apple, Google, Intel and Adobe Systems together agreed to pay $415 million to resolve allegations that they conspired not to hire each other’s employees, thus suppressing salary levels.

Taking on the tech giants will require many lines of attack to address the harms they cause to users and employees alike.

Meddling in Mergers

President Trump’s effort to influence the outcome of the prosecution of his buddy Roger Stone represents another threat to the rule of law in the United States. Yet it is not just the rule of criminal law that is endangered. The Trump Administration has also been meddling with civil law, particularly in the area of antitrust.

This has been going on for a while. Early in his administration, the Trump Justice Department sought to block AT&T’s acquisition of Time Warner, mainly, it appears, because the president wanted to get back at Time Warner subsidiary CNN for its negative coverage of him. Even after a federal court ruled in favor of AT&T and allowed it to close the deal, DOJ continued its legal crusade. A year ago, some critics were arguing that Trump’s actions with regard to AT&T amounted to an impeachable offense.

Last year, DOJ did Trump’s bidding by opening an antitrust investigation of four automakers that had sided with California in a dispute over whether the state could maintain its stricter automobile emissions standards in the face of the administration’s move to ease those standards at the federal level. Recently, DOJ quietly dropped the probe after concluding that the companies had violated no laws—something that was clear from the beginning.

As with criminal cases, Trump is trying to use antitrust laws not only to harm his opponents but to reward his friends. Exhibit A here is the proposed merger of T-Mobile and Sprint. A federal judge has just ruled in favor of the deal, which will greatly reduce competition in a wireless industry that is already highly concentrated. One study found that it would also depress wages of workers at cellphone retail stores.

The case had been brought by attorneys general in 13 states and the District of Columbia concerned that the combination had received approval from the Justice Department and the Federal Communications Commission.

Those approvals came amid reports over the past year that the merger was being strongly promoted by the White House. Trump is very chummy with Masayoshi Son, the chair of Sprint’s Japanese parent SoftBank, who has cultivated close ties with the president by making lavish promises of new investments in the U.S. that are unlikely to materialize. SoftBank, in fact, is in bad shape financially, due to setbacks relating to its stakes in companies such as We Work and Uber.

Meanwhile, T-Mobile also stoked the administration’s enthusiasm for the merger by spending hundreds of thousands of dollars at Trump’s DC hotel.

When Trump does not have a personal stake in the matter, he seems willing to large mergers proceed. He made some noises about the combination of aerospace giants Raytheon and United Technologies but then dropped the matter. The deal is expected to close in the next few months.

Other big combinations have also been succeeding. Last year alone, Bristol-Myers Squibb acquired Celgene; Occidental Petroleum bought Anadarko; Walt Disney took over a big chunk of Twenty-First Century Fox; and so on.

What we are left with are two problems. On the one hand, we have an administration that is largely willing to left corporate concentration continue unchecked. On the other hand, we have a president who is willing to selectively intervene in deals to help friends and harm foes.

Both practices are exactly the opposite of what is in the public interest. The antitrust laws should be applied rigorously to control corporate power, and a president should refrain from meddling in deals, especially when it’s done for personal political reasons. But that’s not the way it works in Trumpworld.

The 2019 Corporate Rap Sheet

While the news has lately focused on political high crimes and misdemeanors, 2019 has also seen plenty of corporate crimes and violations. Continuing the pattern of the past few years, diligent prosecutors and career agency officials have pursued their mission to combat business misconduct even as the Trump Administration tries to erode the regulatory system. The following is a selection of significant cases resolved during the year.

Online Privacy Violations: Facebook agreed to pay $5 billion and to modify its corporate governance to resolve a Federal Trade Commission case alleging that the company violated a 2012 FTC order by deceiving users about their ability to control the privacy of their personal information.

Opioid Marketing Abuses: The British company Reckitt Benckiser agreed to pay more than $1.3 billion to resolve criminal and civil allegations that it engaged in an illicit scheme to increase prescriptions for an opioid addiction treatment called Suboxone.

Wildfire Complicity: Pacific Gas & Electric reached a $1 billion settlement with a group of localities in California to resolve a lawsuit concerning the company’s responsibility for damage caused by major wildfires in 2015, 2017 and 2018. PG&E later agreed to a related $1.7 billion settlement with state regulators.

International Economic Sanctions: Britain’s Standard Chartered Bank agreed to pay a total of more than $900 million in settlements with the U.S. Justice Department, the Treasury Department, the Federal Reserve, the New York Department of Financial Services and the Manhattan District Attorney’s Office concerning alleged violations of economic sanctions in its dealing with Iranian entities.

Emissions Cheating: Fiat Chrysler agreed to pay a civil penalty of $305 million and spend around $200 million more on recalls and repairs to resolve allegations that it installed software on more than 100,000 vehicles to facilitate cheating on emissions control testing.

Foreign Bribery: Walmart agreed to pay $137 million to the Justice Department and $144 million to the Securities and Exchange Commission to resolve alleged violations of the Foreign Corrupt Practices Act in Brazil, China, India and Mexico.

False Claims Act Violations: Walgreens agreed to pay the federal government and the states $269 million to resolve allegations that it improperly billed Medicare, Medicaid, and other federal healthcare programs for hundreds of thousands of insulin pens it knowingly dispensed to program beneficiaries who did not need them.

Price-fixing: StarKist Co. was sentenced to pay a criminal fine of $100 million, the statutory maximum, for its role in a conspiracy to fix prices for canned tuna sold in the United States.  StarKist was also sentenced to a 13-month term of probation.

Employment Discrimination: Google’s parent company Alphabet agreed to pay $11 million to settle a class action lawsuit alleging that it engaged in age discrimination in its hiring process.

Investor Protection Violation: State Street Bank and Trust Company agreed to pay over $88 million to the SEC to settle allegations of overcharging mutual funds and other registered investment company clients for expenses related to the firm’s custody of client assets.

Illegal Kickbacks: Mallinckrodt agreed to pay $15 million to resolve claims that Questcor Pharmaceuticals, which it acquired, paid illegal kickbacks to doctors, in the form of lavish dinners and entertainment, to induce them to write prescriptions for the company’s drug H.P. Acthar Gel.

Worker Misclassification: Uber Technologies agreed to pay $20 million to settle a lawsuit alleging that it misclassified drivers as independent contractors to avoid complying with labor protection standards.

Accounting Fraud: KPMG agreed to pay $50 million to the SEC to settle allegations of altering past audit work after receiving stolen information about inspections of the firm that would be conducted by the Public Company Accounting Oversight Board.  The SEC also found that numerous KPMG audit professionals cheated on internal training exams by improperly sharing answers and manipulating test results.

Trade Violations: A subsidiary of Univar Inc. agreed to pay the United States $62 million to settle allegations that it violated customs regulations when it imported saccharin that was manufactured in China and transshipped through Taiwan to evade a 329 percent antidumping duty.

Consumer Protection Violation: As part of the settlement of allegations that it engaged in unfair and deceptive practices in connection with a 2017 data breach, Equifax agreed to provide $425 million in consumer relief and pay a $100 million civil penalty to the Consumer Financial Protection Bureau. It also paid $175 million to the states.

Ocean Dumping: Princess Cruise Lines and its parent Carnival Cruises were ordered to pay a $20 million criminal penalty after admitting to violating the terms of their probation in connection with a previous case relating to illegal ocean dumping of oil-contaminated waste.

Additional details on these cases can be found in Violation Tracker, which now contains 397,000 civil and criminal cases with total penalties of $604 billion.

Note: I have just completed a thorough update of the Dirt Diggers Digest Guide to Strategic Corporate Research. I’ve added dozens of new sources (and fixed many outdated links) in all four of the guide’s parts: Key Sources of Company Information; Exploring A Company’s Essential Relationships; Analyzing A Company’s Accountability Record; and Industry-Specific Sources.

Facebook Joins the Multi-Billion-Dollar Penalty Club

It is a sign of how jaded we have become to corporate misconduct that the $5 billion fine imposed on Facebook by the Federal Trade Commission for privacy violations is being shrugged off by the company, by the market and by the public. Many are describing it as a slap on the wrist.

It’s true that a ten-figure penalty is no longer such a rarity. According to Violation Tracker, 35 parent companies have had to pay that amount in at least one case in the United States. Eleven corporations have been hit with billion-dollar-plus penalties more than once. Of these, nine are big banks: Bank of America, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Royal Bank of Scotland and Wells Fargo. The other two are BP and Volkswagen.

Bank of America, whose penalty total is far greater than that of any other corporation, has racked up seven ten-figure cases, including three in excess of $10 billion.

BofA’s rap sheet is perhaps the most persuasive evidence that escalating penalties are not having the desired effect of deterring corporate wrongdoing. Even at the higher levels, the fines are seen by large companies as a tolerable cost to pay for continuing to do business more or less as before.

The Justice Department and the regulatory agencies seem to be aware of this and are at least making noises about taking other steps to deter and punish miscreants.

In the case of Facebook that includes provisions in the FTC settlement that will put more responsibility on the company’s board to make sure that privacy protections are enforced. It also enhances external oversight by an independent third-party monitor.

All of this might be more impressive if Facebook had not already signed a previous settlement with the FTC in 2012 that was supposed to establish strong privacy protections—provisions that the company has clearly evaded.

Also contained in the Facebook settlement is a provision that will require Facebook CEO Mark Zuckerberg to personally certify that the company is adhering to privacy protections. This would only have an impact if it is rigorously enforced, with non-compliance putting him behind bars rather than just triggering another big payout.

There is also renewed discussion of stepped up antitrust enforcement, especially against the big tech companies. This would be more effective if federal authorities were willing to try breaking up the likes of Facebook, Alphabet/Google and Amazon rather than seeking limited restrictions on their market power. That approach has largely been shunned for the past two decades, ever since the effort to split up Microsoft collapsed and the DOJ had to settle for more modest remedies.

Prosecutors and policymakers continue to struggle with the issue of how to deal with large companies. Often it seems they are mainly concerned with little more than giving the appearance of getting tough. Only when faced with sustained public pressure will they come up with effective ways to rein in rogue corporations.

Oligopolies and Regulatory Compliance

There is growing awareness of the dangers posed by Amazon’s ever-increasing market clout, but the concentration of economic power is not limited to that online retailer. More and more U.S. industries have become oligopolies, and in some sectors the top two companies now have a market share in excess of 50 percent.

This concentration is made clear to me each time I revise the parent-subsidiary data in Violation Tracker. In the just-completed quarterly update, which will be posted next week, I had to make adjustments to reflect about three dozen instances in which one of the companies in our universe of some 3,000 parent companies completed the acquisition of another.

Among these deals: the purchase of Aetna by CVS Health, the acquisition of Express Scripts by Cigna, and the purchase of industrial gas giant Praxair by its competitor Linde.

But the one that stood out to me was the acquisition of oil refiner Andeavor by Marathon Petroleum. Andeavor is the name adopted last year by Tesoro, one of the largest petroleum refiners in the country. Over the last two decades it has bought refineries from large corporations such as Shell and BP, and in 2016 it purchased all of Western Refining.

Marathon Petroleum, which was spun off from Marathon Oil in 2011, has grown through previous deals such as the takeover of the infamous BP refinery in Texas City, Texas, the site of a 2005 explosion in which 15 workers were killed.

The marriage of Marathon and Andeavor will create the largest oil refiner in the United States, but at the same time it will join together two companies with very checkered environmental, safety and labor records.

Marathon’s operations, including those previously owned by BP in Texas City, have amassed more than $920 million in penalties, according to Violation Tracker. This total includes a $334 million settlement with the EPA and the Justice Department covering air pollution at refineries in five states, along with two dozen OSHA penalties.

Andeavor has accumulated $467 million in penalties, most of which comes from a single giant settlement with the EPA in 2016. It also has had about two dozen significant OSHA fines.

The combined company’s page in the updated Violation Tracker, which will include other new data, will show a total of nearly $1.4 billion in penalties. This will put Marathon in the dubious club of only a few dozen mega-corporations that have racked up ten-figure totals in Violation Tracker. It will put the company higher on that list than the long-time environmental miscreant Exxon Mobil.

Aside from the economic consequences, growing concentration may also be weakening regulatory compliance. As industries become increasingly dominated by large corporations with a history of breaking the rules, it is likely that those violations will become even more common. That’s another reason to get tough on oligopolies.