This is probably one of the top five food scandals of the 21st century, and we can't underplay it. People need to go to jail. People need to go to jail for this. This is among the most widespread scandals and not only food pricing, [00:00:17] but food availability that I've actually ever heard of. We have been talking about price gouging by corporate America quite a bit on the show, and that's after the media decided to attack Kamala Harris, [00:00:33] alleging that she wants to do price fixing or price controls in response to inflation. She has argued that there has been price gouging, which has led to that inflation at grocery stores. And there's been a lot of denial about corporations doing price gouging at all. [00:00:50] And guess what? We've provided evidence before. Now, more perfect Union has done an investigation that has found alleged price fixing specifically in the meat industry. And just like in the rental housing market, they're using tech to do it. [00:01:07] So let me give you the details. The scheme revolves around a software called Agri Stats. So let's watch more from the more Perfect Union report to understand what we're talking about here. Let's watch agar stats is the heartbeat of the meat industry. [00:01:24] It tracks everything product prices, the cost to raise an animal worker wages and market projections. This info is then turned into reports bought by companies that effectively control all of the chicken, turkey and pork markets. So for each item in the grocery store, whether it be chicken thighs or chicken [00:01:42] wings agar stats, they create a report. The report outlines the price the company charged the national average of what its competitors charged and the top quartile. In fact, it goes deeper than that. It tells meat processors where their price ranks nationally. [00:01:59] Then the gap between what they're charging and the national average, And the gap between that and the top 25%. But I think most importantly, you can actually see the economic impact dollars or how much money the company is leaving behind. [00:02:16] The way the data was set up was an incentive for them to raise prices, like, you have to catch up to the market here. Why are you underselling? You're making us all look bad. Once all these suppliers knew what they were each selling and what they were selling for. It's really just a matter of determining what they want it to be selling it for. [00:02:38] So look, this is super important to understand everyone. And we've talked about this in a different context before. And I'm so, so heartbroken to see that this type of predatory activity is now being utilized by other sectors of the economy, namely the meat industry here. So we've talked about this in the context of the rental housing market, [00:02:57] and it's essentially a way of sellers or in the case of the housing market landlords to collude with one another and raise their prices and keep their prices high. Anyone who goes against that model is basically like punished for it [00:03:14] and ostracized for it. So what I'm talking about with the rental housing market, it's basically something called RealPage. And so let's go to the first graphic here. An e-book produced by RealPage says that the company allows corporate landlords, [00:03:29] who are technically competitors, to actually work together to make us all more successful in our pricing. RealPage bragged that landlords that use its software continually outpace the market in good times and bad. And so I'll give you a specific example when it comes to RealPage. [00:03:47] So in Phoenix, according to an Arizona lawsuit, 70% of multifamily apartment units listed in the Phoenix metropolitan area are owned, operated or managed by companies that have contracted with RealPage. And according to a lawsuit filed by DC, 60% of large multifamily buildings, [00:04:06] 50 units or more set prices using Realpage's software. Do you guys understand what's happening here? They're using technology to do price fixing. Okay. Like, in a way that will price gouge you. They're doing it. When it comes to apartment units and things like that. [00:04:23] And now that has unfortunately transferred over to the food industry, primarily the meat packing industry. Yeah. So I think that there's an answer for this, but first, it requires significant nuance. So number one, what is happening here is that natural, [00:04:41] logical and actually inevitable. So eventually whenever you're a business in any industry, you always want to know what your competitors are doing. And among the different things that you want to know is price. And so you're always trying to get what they call business intelligence, [00:04:58] which tells you, again, where the entire industry stands to the best of your ability to know it. And a lot of folks, of course hide a lot of what they're doing because they don't want their competitors to find out all that is logical, but your prices are public. So eventually there was going to be an app that collected the prices. [00:05:15] And if you're running a company and you don't check where your competitors are charging your nuts. So if there's an app that tells you what everybody is charging, you're definitely going to use it. And in fact, it would be a little bit negligent if you didn't use it. So since that is pretty much baked in in every industry, what it winds [00:05:34] up creating is oligopoly by app. Yes, yes. So those you know, the problem with oligopolies of course, is that like monopolies, they limit competition instead of one company. It's a small number of companies. [00:05:51] And that's basically describes an enormous percentage of the American economy. Now, in almost every industry consolidation because of deregulation, there used to be rules against this kind of consolidation, because the power that that consolidation brings. And then once you have a few number of companies and you're checking the app [00:06:07] for which you're what you're all charging, you're going to set prices and move them based on what people the maximum of what people can afford. So what's the answer to that? You can't say to the companies, don't check your competitor's prices and don't use this app. I don't think that that's productive or helpful in my opinion. [00:06:26] But what you can do is, well, now we're going to need an app for the consumers to check prices on all of these in a, in a kind of an industrial scale for all the different things that we buy. And it's harder for us because we have full time jobs, right? Whereas this is the job of the company to track these prices. [00:06:44] But we're going to have to even the playing field here a little bit and kind of force, price competition on them. Hey, don't scroll away, come back, come back. Because before the video continues, we just want to urge you to lend your support to t t u power our honest reporting. [00:07:00] You do it at tyt.com/team and we love you for it. Yeah that ain't going to work. Because what happens is all of the sellers in this case meat sellers Are colluding with one another and all of them agree to keep their prices high. [00:07:16] So if the consumer has an app that shows them, oh, what's the best price? They're not going to find the best price because all of them have agreed to. Charge incredibly high prices. So that's of course a good point. And so let me just. That requires a second level of nuance. So if let's say that the price of something. [00:07:33] Let's say bananas is $0.25 a pound to make up a number. Right. And and if they check. The app or whatever, they check. And for six months straight, none of the four major banana producers. Are making that up. It's just as an example, have moved from $0.25. That means they're colluding. [00:07:50] Because normally what would happen in a free market is somebody would move to $0.24, right. And see if they can grab a bigger share of the market and still have enough margins. Right. That's how free markets normally work. So if there's some price movement and we have that information as consumers, we [00:08:06] can then go to the company charging $0.24 and force a price competition on them. But if they have not moved for some period of time, that means they have de facto collusion. Yeah. And that is when the government can say, no, wait a minute. No, I'm not going to accept this, that you guys are. None of you are moving on price ever. And then it's very hard to prove that. [00:08:27] - But it's provable. - I mean, it's so out in the open. So going back to RealPage for a second. So RealPage is so incredibly strict about enforcing its price fixing scheme that it even deploys pricing advisors to make sure that its landlords are complying with their pricing [00:08:47] recommendations and get a load of this. Let's go to graphic for Jeffrey Roper, who created the RealPage algorithm, explains that if you have idiots, undervaluing it costs the whole system. - See that one saying it? - Yeah, that one gives it away. [00:09:02] Because, guys, if you if your, competitors doing something wrong, you don't want to stop them, right? In this case, they're undervaluing. And if you're at that company and you're a shareholder or whatever it might be, I can see you getting frustrated. [00:09:17] And that's why it pushes towards collusion, right? Because they will all naturally say, hey, if competitor Bob over there is charging 20% more than us and has the same number of customers, you're doing it wrong. That means you can charge more, right? And then shareholders get mad that you're not maximizing profit. [00:09:35] And that's how it works. But in that case, he's mad that the other guys are not colluding on price and that they're actually doing price competition in a free market. Wittingly or unwittingly. Right. And when you say, hey, I want to I want to prevent that guy from doing that. [00:09:52] That's like textbook collusion. Yeah. Look, this example is a little different from what we're talking about. But it does remind me about Senator Joe Manchin's daughter, when she was the executive of a pharmaceutical company that made the EpiPen, when the patent was about to run out and Pfizer was about to put out [00:10:10] a generic version that would be cheaper, thus allowing for competition in the pharmaceutical market. She actually colluded with the CEO of Pfizer to prevent him from putting out the generic version. She hiked up the price of the EpiPen and promised to do profit sharing [00:10:28] with Pfizer as part of the agreement. It is disgusting. That is the kind of stuff that's going on. And so, by the way, no consequences for what she did, which is also incredibly disgusting. But real quick, I do want to go back to how this is being implemented in the meat industry. [00:10:43] Is anyone doing anything about it? Does anyone in government care about it? And it turns out that Attorney General Keith Ellison is paying attention, which is good news. So why don't we take a look at what he has to say about it? He says this is illegal, and he says that he wants to do something about it. [00:10:59] Let's watch. We're at the state capital of Minnesota, where Attorney General Keith Ellison has his offices. He's leading the lawsuit against Edgar States. Attorney General Ellison, thanks for joining us today. Really good to be with you. Thank you. - What is this. - Complaint. [00:11:15] Allege? It alleges that under the Sherman Act, you can't share critical information that would have a tendency to reduce competitiveness and competition. They're essentially sharing information in a way that violates section one [00:11:31] of the Sherman Act, which prohibits things like conspiracies, collaboration, collusion, things like that. The goal of the lawsuit is to have fair competitive pricing. It's lower grocery prices. It's grocery prices that people can afford. [00:11:46] - That's the goal. - But again, it's tricky. Last year, a federal judge ruled in favor of meat companies and agri stats in a civil antitrust case. He wrote just because the stats provided a convenient form to transmit the information did not mean that stats itself joined the conspiracy. [00:12:04] So what's different with this one? Well, the facts are different here in Minnesota. The court has already found that there is a cognizable legal interest. There is a claim to be made. It's hopeful, but it's also not guaranteed. Most of our antitrust laws were written before mass electricity, [00:12:20] let alone streamline information sharing. In fact, most laws were passed before the monopoly man even made his debut. So, look, judges are not always going to rule in the way that you would expect. [00:12:37] You would expect that they would want to uphold and enforce the laws, primarily antitrust laws. Laws against price gouging. And so elections do matter, because you have to consider the fact that when it comes to federal judges, whoever's president gets to nominate and appoint the federal judges [00:12:55] who make these types of decisions. But this story is important to me because it really does highlight who the good guys are. And the fact that Keith Ellison, a Democrat, of course, is paying attention to this issue and wants to do something about it, is tremendously important. - Yeah. - A couple of funny things here. [00:13:12] Right before the show started, Keith Ellison walked by. We said hi. So it was pretty neat that he's in the show. And he was just here. Maybe we'll get him on later in the program, but, to the core of it. Look, to be fair, this one is kind of tough. Like, the judges overall in this country are very conservative, very pro-corporate. [00:13:31] So I'm not surprised at all that in a tough case, they are going to lean towards corporations. But the reason I say it's tough is because a lot of the pricing information is public. You can go to, you know, depending on the situation, like your meat, you can go to the grocery store and check out what the meat price is from your competitors. Right. So you can't. [00:13:47] So a judge can go, brother, the information is public. What is so. And they wrote this act 100 over 100 years ago when it maybe it wasn't as public as it is today. Right. So on the other hand, that's why that quote that Anna read you that we emphasized makes a big difference, [00:14:03] because when you're supposed to be having price competition and one of the people involved says, hey, idiot, don't keep dropping your price. We're all keeping our price at this level to charge as much as possible. That's textbook collusion. And that's why we're saying, obviously there is some effort here [00:14:21] to not have a free market and to charge the maximum to the consumer. And that's exactly when you need the government to step in and go, no, we've got evidence A, B and C here of you guys actually colluding and we can win this case. So that's why I love what Keith Ellison is doing in Minnesota. [00:14:38] And look, Republicans get up in arms about, you know, climate activists because they think it's going to impact their ability to eat their burgers and grill and have a good time. This story should get you fired up. They're coming for your meat. They're coming for your meat. [00:14:56] Okay. All right. - Don't let them touch your meat. - Oh, God. No no no no no no. All right. Thanks for watching the Young Turks. Really appreciate it. Another way to show support is through YouTube memberships. You'll get to interact with us more. There's live chat emojis, badges. [00:15:12] You've got emojis of me Anna John Jr. So those are super fun. But you also get playback of our exclusive member only shows and specials right after they air. 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