The post-pandemic inflation surge generated an intense debate over the role of corporate profits and market power. One side argues that supply disruptions created opportunities for companies, especially in concentrated industries, to raise prices in coordination beyond their rising costs. The other side responds by noting that profits could have increased due to rising demand, while asserting that the ability to coordinate price hikes did not suddenly increase in 2021. A cruder version of this critique mocked the notion of corporate malfeasance under the label “greedflation,” and reminded us that greed is a constant! Maybe so, but opportunity to exercise it is not. As any investigator knows, a crime requires both motive and opportunity. Greed provided the former, while the cover of inflation provided the latter.
In a recent paper, titled “Did profits cause inflation?,” industrial organization economist Christopher Conlon advances this demand-based alternative hypothesis—a defense of corporations, really—by suggesting that for weakened competition to explain the rise in inflation in 2021-22, new cartels would have to emerge at roughly the same time: “Importantly, there is little evidence of a surge in newly organized cartels or widespread consolidation across industries during 2021–2022.” Because Conlon finds no economy-wide formation of cartels, he rejects the hypothesis that a change in firm behavior could have driven inflation.
Yet the “profit-inflation” hypothesis does not require cartels to have formed exactly when inflation surged. An industry could have been highly concentrated before the pandemic, but the opportunity to collude did not present itself until after the cost shock began. In addition to cartels, proponents of this theory, aka “seller’s inflation,” such as Lindsay Owens and Isabella Weber, explained how firms exploited a cost shock to raise prices by more than any cost increase as we emerged from Covid. Again, profiteering under the cover of a crisis doesn’t require the immediate formation of a cartel. Indeed, firms themselves were advertising price increases during earning calls, providing price signaling to their rivals—that is, a willingness not to undercut them. And the more concentrated the industry, the less the need for concerted action if unilateral exercise of market power will achieve the same goal.
Covid-related disruption created unusually favorable conditions for firms to exercise their preexisting market power. The rapidly changing input costs during this period made it difficult for the customers to determine the reason and magnitude of the cost shocks. In such uncertain conditions, firms could also expect competitors to face the same disruptions and increase prices, thereby reducing the risk that a firm increasing its prices would be undercut. This not only justified their price increases but also gave them greater confidence that their rivals would follow.
Inflation spiked in the immediate aftermath of the Covid shock from 2021 to 2022. The subsequent decline in inflation in 2023-24 does not mean that the coordination broke down or market power disappeared. Conlon’s argument confuses inflation—the rate at which prices increase—with the price level itself. When companies set higher prices, they don’t have to keep increasing them at the same magnitude to maintain those ill-gotten margins. Disinflation does not necessarily mean that coordination failed; it could just be that the firms achieved a higher price equilibrium.
So many cartels
For the forgoing reasons, new cartel formation is not a necessary requirement for the profit-inflation hypothesis. But even if we credit Conlon’s (straw-man) requirement, there is substantial evidence of anticompetitive coordination in crucial economic markets during that specific time frame.
Consider RealPage. A complaint put forward by the Department of Justice (DOJ) and multiple states in 2024 alleges that competing property owners gave confidential details to RealPage about rental prices, lease conditions, and occupancy rates. RealPage incorporated this information into its pricing software and generated recommendations based partly on competing landlords’ data. The DOJ claimed that this method prevented property owners from reducing rents, offering fewer discounts and enabling them to set their prices together rather than competing separately for tenants.
Although RealPage was formed in 1998, the alleged conduct occurred right before and during the inflation surge. In February 2020, RealPage prepared to launch its AI Revenue Management platform, which relied on lease data covering 13.5 million units. The complaint further alleges that RealPage facilitated discussions among competing landlords about concessions in May 2020, pricing calculations in August 2020, and potential pricing adjustments in March and April 2021. The President’s Council of Economic Advisers analyzed and estimated that this algorithmic coordination increased rents in involved buildings by around $70 each month on average, or about 4 percent, making renters spend an estimated $3.8 billion. Given that housing represents over a third of the Consumer Price Index, and given the well-known rental price-fixing scheme, it is curious that Conlon never mentions RealPage.
Food markets give us another instance of an industry being cartelized and experiencing rapid inflation. In 2023, Agri Stats was sued by the DOJ for facilitating information sharing among big processors of chicken, pork and turkey. (Disclosure: Singer was an expert for a class of chicken growers and indirect pork purchasers in two Agri Stats matters. Both classes were certified, and the cases ended via settlements.) The lawsuit claims, during the period covering rampant inflation, that Agri Stats gathered confidential data about processing participants related to price, cost and production and distributed the detailed reports unavailable to buyers and public. Processors that subscribed to Agri Stats allegedly used the reports for setting prices and production levels. And Agri Stats would allegedly push processors at times to increase prices and limit supply. Even though its pork and turkey reporting was paused prior to the pandemic, the alleged information sharing persisted in the chicken sector throughout the inflationary period. Conlon never mentions the Agri Stat price-fixing litigation.
The frozen-potato litigation provides further evidence of price fixing in the food industry. The buyers claim that Lamb Weston, McCain Foods, J.R. Simplot and Cavendish Farms—processors that together dominate almost all of the market—planned a series of nearly simultaneous price hikes starting in 2021. These complaints, which were filed in 2024, point out several instances during this period where prices went up at the same time and assert that the cost for frozen potatoes increased by over 40 percent even though input costs were going down. Conlon never mentions the frozen-potato litigation.
Not to be upstaged, the beef industry provides an example of how preexisting concentration played out during the pandemic shock. Tyson, JBS, Cargill, and National Beef, the “Big Four,” controlled approximately 85 percent of beef processing. Lawsuits filed by ranchers, retailers, and distributors allege how these companies coordinated cattle purchases and slaughter volumes to restrict supply and depress the cattle prices, while it maintained higher beef prices. According to an investigation by the Food and Environment Reporting Network, when Covid outbreaks closed major Tyson and Cargill plants, the remaining processors allegedly reduced their cattle purchases rather than expanding production to capture their competitors’ sales. All four processors then raised their prices for the purchasers. During this period the wholesale price of choice beef cuts doubled while the price paid to cattle ranchers decreased by approximately 30 percent. Tyson and JBS have reached substantial settlements while denying any wrongdoing. These allegations illustrate precisely the mechanism that Conlon overlooks: a disruption can magnify the price effects of market power that existed before the shock began.
And these food cases are the ones covered in the mainstream business press. To document other price-fixing complaints in the food industry, we searched the news and analysis portion of Law360, a specialty law journal that tracks antitrust litigation, using keyword searches. Each search combined a food product name with a word like antitrust or price fixing. Next, we ran one structured search on Law360’s case database. We used the following filters: nature of suit set to Antitrust; industry set to Food-Major Diversified and Food Wholesale; and date range set from January 1, 2021, to July 24, 2026. This search returned 131 cases, which we reviewed to remove cases that were already in trial or resolved. The table below summarizes our findings.
| Case Name | Case Number | District Court | Industry |
| United States of America et al. v. Cal-Maine Foods, Inc. et al. | 5:2026-cv-04060 | Northern Iowa | Eggs |
| In re: Nitrogen, Phosphorus, Potassium (NPK) Antitrust Litigation | 26-md-3187 | Kansas | Fertilizer |
| In re Frozen Potato Products Antitrust Litigation | 1:24-cv-11801 | Northern Illinois | Frozen Potatoes |
| US Foods, Inc. v. Agri Stats, Inc. et al | 1:26-cv-04459 | Northern Illinois | Broiler Chicken, Turkey, Pork |
| In re Granulated Sugar Antitrust Litigation | 0:24-md-03110 | Minnesota | Sugar |
| In re: Cattle and Beef Antitrust Litigation | 0:22-md-03031 | Minnesota | Cattle and beef |
| Performance Food Group, Inc. et al v. Keurig Green Mountain, Inc. | 1:26-cv-03950 (E.D.N.Y.), Judge Diane Gujarati | Eastern District of New York | Coffee (K-Cup pods) |
| Conry, et al v. Gerber Products Company, et al | 1:24-cv-06784 (E.D.N.Y.), Judge Nina Gershon. A related, earlier filing exists in the Eastern District of Virginia (4/22/2024). | Eastern District of New York | Baby formula (infant formula) |
In addition to the cases mentioned above, our research found antitrust complaints alleging price-fixing in eggs, fertilizer, sugar, coffee, and baby formula. In June 2026, the DOJ reached a settlement with the nation’s largest egg producers, which requires defendants to “end coordinated benchmark manipulation that artificially inflated prices across the country.” None of these cases were mentioned in Conlon’s paper. Consistent with the formation of these alleged food-related cartels, Conlon finds a large spike in the profit margins of consumer products in the second quarter of 2022 (Figure 7). He reports that “we see a drop in the margins of food manufacturers in 2024,” which is consistent with the pattern of food inflation (spiking in 2022 and falling in 2024).
To be fair, these cases do not prove that all food-related price hikes after the pandemic were due to explicit coordination. Yet they establish a point against Conlon’s thesis—namely, significant markers of anticompetitive coordination were present in important food markets during the time food prices were spiking. In the face of such evidence, it is odd that Conlon would conclude there wasn’t a “surge in newly organized cartels or widespread consolidation.”
An alternative hypothesis with zero evidence
Conlon is correct that citing higher total profits is not sufficient to distinguish between increased demand and reduced competition as the driver of inflation. Total profits can go up when companies sell more units above cost, make a larger profit margin on each item they sell, or both.
Conlon recognizes what kind of evidence would serve as the tie-breaker: “In the case of a demand shock, we would expect output to grow,” he writes, “while in the case of a change in conduct, we would expect output to fall.” Yet he fails to offer the very empirical analysis that his very framework requires. By his own calculations, he acknowledges that there was a notable rise in markups over costs (as opposed to total profits) that coincided with price spikes—which rules out the demand-driven explanation of more units sold—but does not resolve whether higher markups resulted from increased demand or increased coordination. Both treatments could dampen the demand elasticity, resulting in greater markups. Because empirical investigation of quantities is needed to disentangle the two dueling hypotheses, and because he offers none, Conlon has no basis upon which to invoke demand as the stronger candidate.
Conlon’s own analysis finds that market-wide markups, defined as the ratio of price to marginal costs, increased in 2020 and stayed high from 2021 until the third quarter of 2022, right as inflation began rising. In particular, he estimates that the total markup on a sales-weighted basis rose from about 1.60 in 2018 to around 1.66 by 2021, but then fell back to nearly 1.61 in 2023 (see Figure 8). This economy-wide trend is also observed in the food industry (see Figure 7), as food and consumer products enjoyed a spike in margins in 2022, before these margins returned to normal levels in 2023 and 2024. These correlations do not prove that higher markups caused inflation to rise. But they indicate that when markups went up, inflation increased; and when markups dropped back down, inflation decreased.
Finally, Conlon tests whether industries with greater markup growth between 2018 and 2024 experienced higher producer price inflation growth, finding no meaningful relationship as evidenced by a low R-squared. There are at least three problems with this test of the profit-inflation hypothesis. First, recall that proponents of this hypothesis believe that firms in concentrated industries exploited an economy-wide cost shock to raise prices by more than the true increase in costs. Hence, Conlon’s test omits a critical explanatory variable—namely, the cost shock brought about by Covid—which might bias his estimate on markup growth. It is the interaction of this cost shock with high levels of industry concentration that allegedly caused prices to spike. Second, when testing for a causal relationship of A (the treatment) on B (the outcome), the statistic of interest is not the R-squared but rather the estimated coefficient and standard error on the treatment (markup growth). Conlon 2026 never tells us whether that coefficient is economically or statistically significant or both. Going back and checking his 2023 paper, however, one learns that coefficient on markup growth is indeed positive and statistically significant at the one percent level. The objective of the model is not to maximize R-squared (or predict PPI growth in any given year); if that were the goal, one would add more explanatory variables. Rather, the goal is to isolate the impact of the treatment on the outcome variable, controlling for potential confounders. Conlon never tests that model. Third, even crediting the wrong statistic, the low R-squared in Conlon’s regression at the industry level cannot reject the hypothesis that firms were exploiting general cost increases in the economy, as opposed to cost increases in their own industries (the independent variable in Conlon’s univariate regression).
In summary, Conlon is right to suggest that accounting evidence alone is not enough to conclude the cause of inflation. But that limitation does not vindicate his preferred demand explanation either. Having identified output as the principal way to distinguish stronger demand from changed conduct, he never completes his own test. At best, his analysis demonstrates uncertainty about the cause of higher profits; it does not demonstrate that pricing coordination, whether tacit or explicit, among firms in concentrated industries played no causal role in the inflationary spike in 2021 and 2022.