Edgardo Sola Colon, a prominent figure in Puerto Rico’s steel distribution sector, recently pleaded guilty to his role in a long-running price-fixing conspiracy that manipulated the cost of reinforcing bar (rebar) on the island. This high-profile case sheds light on the detrimental impact of anti-competitive practices in the construction supply chain and highlights the serious legal consequences for those who violate federal antitrust laws.
Background of the Price-Fixing Conspiracy
Between 2015 and 2022, Edgardo Sola Colon, the president of a leading steel distributor in Puerto Rico, conspired with other executives to fix prices for rebar, a critical material in construction. Rebar is a steel product widely used to reinforce concrete structures, making it essential for residential and commercial construction projects. Sola and his competitors, who collectively controlled about 70% of the wholesale rebar market in Puerto Rico, worked together to eliminate competition and maintain artificially high prices for this crucial building material.
The conspiracy took place during a period of significant reconstruction efforts following Hurricanes Irma and Maria in 2017, a time when the demand for construction materials was especially high. The collusion was aimed at boosting profits for Sola and his co-conspirators by manipulating the prices of rebar sold to hardware stores, building contractors, and other businesses across Puerto Rico.
Evidence of Collusion Among Competitors
Court documents reveal that Edgardo Sola Colon and his competitors coordinated their price-fixing activities through private communications, including WhatsApp messages. For example, in December 2020, Sola sent a message to Juan Carlos Aponte, an executive at a competing company, discussing the price of Turkish rebar. Aponte replied with specific price points for different quantities of rebar and asked, “The question is, are we on the same page?” Sola confirmed, “Yes, that is what I am doing,” indicating that an agreement to maintain these fixed prices had been reached.
Through these coordinated efforts, Edgardo Sola Colon and his associates effectively suppressed competition in the rebar market, allowing them to increase their profits at the expense of consumers. Sola admitted that more than $50 million in sales by his companies were directly affected by this price-fixing conspiracy, leading to substantial financial gains for those involved.
Legal Consequences for Edgardo Sola Colon
By pleading guilty, Edgardo Sola Colon has acknowledged his role in violating the Sherman Act, a federal antitrust law that prohibits business practices that restrain trade or commerce. Violating the Sherman Act constitutes a felony, with potentially severe penalties. Individuals found guilty of such offenses can be sentenced to up to 10 years in prison and fined up to $1 million. Corporations may face fines of up to $100 million, or even higher if the financial impact of the offense exceeds the statutory limit.
Edgardo Sola Colon’s guilty plea follows that of Juan Carlos Aponte, who also admitted his role in the price fixing conspiracy in August 2023. Both men are awaiting sentencing, with Sola’s court date set for December 16. The sentences will be determined by a federal district court judge, who will consider the U.S. Sentencing Guidelines and other statutory factors.
Impact of the Price-Fixing Conspiracy on Puerto Rico
The price-fixing conspiracy orchestrated by Edgardo Sola Colon and his associates had a significant impact on Puerto Rico’s economy, particularly in the construction sector. By colluding to fix prices, the conspirators undermined fair market competition, resulting in higher costs for rebar—a key material in building and infrastructure projects. This not only affected businesses and contractors but also increased costs for homeowners and developers, delaying rebuilding efforts and inflating project budgets.
Price-Fixing Conspiracy: Jury Convicts 2 Executives in Concrete Market
The conspiracy was especially harmful during the critical period of reconstruction after Hurricanes Irma and Maria. At a time when affordable construction materials were vital for the recovery of the island, Sola and his co-conspirators were focused on inflating their profits, disregarding the broader impact on the community.
Government Response to Antitrust Violations
The U.S. Department of Justice’s Antitrust Division, in collaboration with the FBI’s San Juan Field Office, led the investigation into this case. Deputy Assistant Attorney General Manish Kumar highlighted the importance of this prosecution in sending a clear message about the consequences of engaging in anti-competitive practices. Kumar said that the Antitrust Division’s continued commitment to holding accountable those who collude to raise prices and harm consumers and businesses in Puerto Rico is demonstrated by this guilty plea.
The prosecution team, which includes experienced trial attorneys from the Antitrust Division’s Washington Criminal Section, is determined to enforce federal laws that protect consumers and ensure a fair competitive market. This case highlights the government’s dedication to investigating and prosecuting price-fixing schemes that harm the economy and limit consumer choices.
