Competition record
Addyston Pipe & Steel
Deep profile · 1 linked library matter
Addyston Pipe and Steel made cast-iron pipe for city water and gas mains. In 1899 the Sixth Circuit, in an opinion by William Howard Taft, held that the foundries' bid allocation violated the Sherman Act.
Overview
Addyston Pipe and Steel produced the cast-iron pipe cities bought for water and gas mains. Municipal contracts were let by bid, so the winning price was supposed to be the result of foundries competing for the job.
The foundries agreed which firm would take which territory and arranged the bids so the chosen foundry won. Taft's Sixth Circuit opinion in 1899 treated that naked allocation as unlawful under the Sherman Act. The library status is won by the plaintiff.
The case is an early American statement that dividing customers and rigging bids is illegal even when the conspirators call the arrangement a joint selling plan. Later cartel law still cites that distinction.
Competition footprint
The customers were cities buying pipe for public works.
A reserved territory meant a foundry did not have to bid as if it might lose.
The library records a plaintiff win, which in this case is the condemnation of the allocation.
Consumer & business angle
Taxpayers paid for water and gas pipe that had not been honestly bid.
A foundry that wanted a city contract outside its assigned territory was shut out by the pact.
What to watch
- How modern bid-rigging cases still use Taft's line between a real joint venture and a sham auction.
- Public-works tenders in concentrated pipe and construction markets, where the same allocation pattern can reappear.
Markets
cast-iron pipe · municipal water and gas pipe · cast iron pipe · municipal utilities
Also known as: addyston pipe, addyston pipe and steel