WASHINGTON, D.C. — Hendrikus van Westenbrugge, a former co-Managing Director of JO Tankers B.V., based in Spijkenisse, the Netherlands, was charged in Philadelphia today with participating in an international cartel to allocate customers, rig bids and fix prices on parcel tanker affreightment contracts for shipments of specialty liquids to and from the United States and elsewhere, the Justice Department announced.Notice that two of the DOJ's three charges involve simple acts of speech. The other charge, agreeing not to compete, involves the most basic of individual economic rights—the right not to engage in trade. Obviously, the DOJ begs to differ. They argue that speech is illegal when it relates to illegal activity and that no person may enter into a contract that "restrains trade." But these arguments miss the point. To say speech is illegal when it relates to a criminal activity is circular; under that reasoning, any act of speech may be banned (that is, subject to prior restraint) because it may lead to actions disfavored by the government. But more to the point, the speech at issue here involves discussions of prices and customers. It might involve defrauding customers—and if that is the case, the private tort system is the proper forum for resolving the issue—but there is no act of force warranting the government's intervention. At no point, according to these allegations, did the defendants conspire to deny any customer his legal rights.
Van Westenbrugge has agreed to plead guilty and cooperate with the ongoing investigation. In addition, van Westenbrugge, a Dutch citizen, has agreed to serve three months incarceration and pay a fine of $75,000. The plea agreement and recommended sentence are subject to court approval. "This case demonstrates our ongoing commitment to prosecute high-ranking executives who participate in international cartels that victimize American businesses," said R. Hewitt Pate, Assistant Attorney General in charge of the Department's Antitrust Division.
Parcel tanker shipping is the transportation of bulk chemicals, edible oils, acids and other specialty liquids by compartmentalized deep sea vessels. The temperature and other specifications of the compartments in the vessels can be regulated according to the specific requirements of the type of liquid being transported. A contract of affreightment provides for the transportation of bulk liquids from one port to another and typically covers multiple shipments during a certain period.
According to the charges, van Westenbrugge joined the ongoing parcel tanker shipping conspiracy as early as January 2001 and participated until at least as late as November 2002. The criminal case charges that van Westenbrugge and his co-conspirators:
As a result, the Department said consumers in the market for international parcel tanker shipping services paid non-competitive and higher prices for parcel tanker shipping.
- engaged in discussions concerning customers and prices of parcel tanker shipping of products to and from the United States and elsewhere;
- agreed not to compete for one another's customers either by not submitting prices or bids to certain customers, or by submitting intentionally high prices or bids to certain customers; and
- discussed and exchanged prices submitted to certain customers so as to not undercut one another's prices.
Once again, the DOJ will protest, saying customers were denied their right to "competitive" prices. But that is not a right. First of all, how does one determine "competitive" prices? In a free market, prices are objectively determined by the agreements made by buyers and sellers. If a group of sellers (or a group of buyers, for that matter) join together to insist on a particular price level, then so be it. The resulting price still reflects market principles. The DOJ, in contrast, seeks to prevent sellers from exercising any control over pricing; accordingly, the government initiates antitrust prosecution whenever a buyer complains that he's paying more than he'd care to. By prosecuting the sellers, the DOJ replaces the free market with a government-run system where sellers have economic rights only at the government's discretion.
When you establish a "right" to a particular price backed by government order, you have a price control. The DOJ would never call it that, but that's what it is.
Cases like this demonstrate the necessity of repealing the Supreme Court's "commercial speech doctrine," which segregates "commercial" and "noncommercial" speech, assigning the former class lesser First Amendment protection. The result is a policy of treating commercial speech as inherently suspect, and the mere exchange of information a criminal act.