We’ve been following litigation led by the Texas Attorney General alleging that BlackRock, State Street, and Vanguard violated antitrust laws when taking part in net-zero industry initiatives. In addition to the twelve states behind the litigation, the federal government has now entered the fray with both the FTC and DOJ filing a Statement of Interest in the case. According to the filing, the FTC:
“Affirms 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. While these asset managers play an important role in American capital markets—a role that the agencies are committed to protecting—they nonetheless remain subject to the same antitrust laws as everyone else. The Statement of Interest further affirms that public, industry-wide initiatives may still violate the Sherman Act and Clayton Act, even when purportedly justified out of social concerns.”
Antitrust lawsuits of this nature have long been a goal of red state AGs which have spent the past several years before the lawsuit launching probes and investigations which ultimately led to the demise of the Net-Zero Asset Managers initiative earlier this year. BlackRock responded to the FTC and DOJ filing with the following statement:
“The DOJ and FTC’s support for this baseless case undermines the Trump Administration’s goal of American energy independence. As we made clear in our earlier motion to dismiss, this case is trying to re-write antitrust law and is based on an absurd theory that coal companies conspired with their shareholders to reduce coal production. Forcing asset managers to divest from coal companies will harm their ability to access capital and invest in their businesses and employees, likely leading to higher energy prices.”
Legal analysts have been skeptical of the legal viability of antitrust claims like the ones alleged in this case. However, if the past six months have taught the sustainability world anything, it is to expect the unexpected, and rule out no possibility. We will see more state level enforcement actions against ESG to be championed by the federal government as the administration attempts to enact the playbook developed by the anti-ESG movement.
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