The Federal Trade Commission (FTC), in collaboration with the U.S. Department of Justice (DOJ), has filed a Statement of Interest in a significant antitrust case against three major asset management firms: BlackRock, State Street, and Vanguard. This case, spearheaded by Texas Attorney General Ken Paxton, alleges that these firms engaged in an anticompetitive conspiracy aimed at reducing coal production as part of a broader 'Net Zero' initiative aligned with Environmental, Social, and Governance (ESG) goals.

According to the allegations, BlackRock, State Street, and Vanguard utilized their influence as shareholders in competing coal companies to pressure these firms into decreasing coal output across the industry. The lawsuit claims that this collusion, along with the illegal sharing of sensitive competitive information, has led to increased coal prices, ultimately burdening American consumers with higher energy costs as part of a politically motivated agenda.

The FTC and DOJ, as the primary enforcers of antitrust laws in the United States, expressed their commitment to ensuring that antitrust laws are applied correctly. They aim to protect markets from anticompetitive practices that could lead to inflated energy prices while also respecting legitimate investment activities.

FTC Chairman Andrew Ferguson emphasized the administration's stance on the importance of coal for energy security, criticizing the alleged actions of these asset managers as detrimental to American consumers. He stated that the companies' efforts to limit coal production under the guise of climate change concerns were financially motivated, benefiting them at the expense of consumers.

In their joint statement, the FTC and DOJ urged the U.S. District Court for the Eastern District of Texas to dismiss the asset managers' claims, highlighting several legal misinterpretations regarding federal antitrust laws and the role of institutional shareholders. They affirmed that asset managers could be held accountable under Section 7 of the Clayton Act if they use their holdings in multiple competitors to pursue anticompetitive objectives.

Furthermore, the Statement of Interest clarifies that public initiatives aimed at social goals could still violate the Sherman Act and Clayton Act, reinforcing that all market participants, including institutional investors, are subject to antitrust regulations. The Commission's decision to file the statement was approved with a vote of 2-0-1, with one commissioner recused.