Price fixing is an agreement between business competitors to sell the same product or service at the same price. In general, it is an agreement intended to ultimately push the price of a product as high as possible, leading to profits for all the sellers. Price-fixing can also involve any agreement to fix, peg, discount or stabilize prices. The principal feature is any agreement on price, whether express or implied. For the buyer, meanwhile, the practice results in a phenomenon similar to price gouging. The Trade Practices Act 1974 is an act of the Parliament of Australia. ... The International Competition Network is an informal, virtual network that seeks to facilitate cooperation between competition law authorities globally. ... A competition regulator is a government agency, typically a statutory authority, which regulates competition laws, and may sometimes also regulate consumer protection laws. ... This article or section does not cite any references or sources. ... Price gouging is a term of variable, but nearly always pejorative, meaning, referring to a sellers asking a price that is much higher than what is seen as fair under the circumstances. ...

Price fixing requires a conspiracy between two or more sellers; the purpose is to coordinate pricing for mutual benefit at the expense of buyers. Sellers might agree to sell at a common target price; set a common "minimum" price; buy the product from a supplier at a specified "maximum" price; adhere to a price book or list price; engage in cooperative price advertising; standardize financial credit terms offered to purchasers; use uniform trade-in allowances; limit discounts; discontinue a free service or fix the price of one component of an overall service; adhere uniformly to previously-announced prices and terms of sale; establish uniform costs and markups; impose mandatory surcharges; purposefully reduce output or sales in order to charge higher prices; or purposefully share or "pool" markets, territories, or customers. In economics, a price book is a book in which the normal prices of an item are listed for all suppliers. ... The Suggested Retail Price (SRP) sometimes called Manufacturers Suggested Retail Price (MSRP) or Recommended retail price (RRP) of a product is the price the manufacturer recommends that the retailer sell it for. ... Advert redirects here. ... Credit as a financial term, used in such terms as credit card, refers to the granting of a loan and the creation of debt. ... Discounts and allowances are modifications to the basic price. ... Discounts and allowances are modifications to the basic price. ... This article or section needs to be wikified. ... An overprint is the addition of text (and sometimes graphics) to the face of a postage stamp after it has been printed. ...

Generally, price fixing is illegal, but it may nevertheless be tolerated or even sanctioned by some governments at various times, particularly among those whose countries are developing economies. See also Collusion. For other uses, see Law (disambiguation). ... A developing country is a country with low average income compared to the world average. ... Look up collusion in Wiktionary, the free dictionary. ...

In neo-classical economics, price fixing is inefficient. The anti-competitive agreement by producers to fix prices above the market price transfers some of the consumer surplus to those producers and also results in a deadweight loss. Supply curve shift Consumer surplus or Consumers surplus (or in the plural Consumers surplus) is the economic gain accruing to a consumer (or consumers) when they engage in trade. ... In economics, a deadweight loss (also known as excess burden) is a permanent loss of well being to society that can occur when equilibrium for a good or service is not Pareto optimal, (that at least one individual could be made better off without others being made worse off). ...

Examples

Main article: Price fixing cases

// On April 18, 2007 The European commission imposed a fined Heineken €219. ...

United States and Canada

In the United States, price fixing can be prosecuted as a criminal felony offense under section 1 of the Sherman Antitrust Act. ^[1] In Canada, it is an indictable criminal offence under section 45 of the Competition Act. Bid rigging is considered a form of price fixing and is illegal in both the United States (s.1 Sherman Act) and Canada (s.47 Competition Act). In the United States, agreements to fix, raise, lower, stabilize, or otherwise set a price are illegal per se.^[2] It does not matter if the price agreed upon is reasonable or for a good or altruistic cause; or if the agreement is explicit and formal or unspoken and tacit. In the United States, price-fixing also includes agreements to hold prices the same, discount prices (even if based on financial need or income), set credit terms, agree on a price schedule or scale, adopt a common formula to figure prices, banning price advertising, or agreeing to adhere to prices that one announces. ^[3] Although price fixing usually means sellers agreeing on price, it can also include agreements among buyers to fix the price at which they will buy products. For the record label, see Felony Records The term felony is a term used in common law systems for very serious crimes, whereas misdemeanors are considered to be less serious offenses. ... John Sherman The Sherman Antitrust Act (Sherman Act[1], July 2, 1890, ch. ... This article needs to be wikified. ...

Under American law, exchanging prices among competitors can also violate the antitrust laws. This includes exchanging prices with either the intent to fix prices or if the exchange affects the prices individual competitors set. Proof that competitors have shared prices can be used as part of the evidence of an illegal price fixing agreement. ^[4] Experts generally advise that competitors avoid even the appearance of agreeing on price. ^[5] Antitrust is also the name for a movie, see Antitrust (movie) Antitrust or competition laws legislate against trade practices that undermine competitiveness or are considered to be unfair. ...

Under U.S. law, price fixing is only illegal if it is intentional and comes about via communication or agreement between firms or individuals. It is not illegal for a firm to copy the price movements of a de facto market leader called price leadership, which has been seen to be the case in markets for breakfast cereals and cigarettes. But informal agreements or unspoken agreements to fix price also can violate the antitrust laws. The price-fixing laws apply to industries and professionals, for-profit concerns and non-profits and charities. ^[6] The United States Department of Justice Antitrust Division and United States Federal Trade Commission are responsible for enforcing federal price fixing laws; see also Sherman Antitrust Act. The Department of Justice handles both criminal and civil cases. As of 2004 under US law corporations may be fined up to $100 million for criminal price fixing; individuals can be charged and sentenced to prison sentences of up to 10 years for price-fixing violations. The Federal Trade Commission can prosecute firms for price fixing as a civil matter. Many State Attorneys General also bring antitrust cases and have antitrust offices, such as Virginia, New York, and California. Private individuals or organizations can bring their own lawsuits for triple damages for antitrust violations and also recover attorneys fees. ^[7]. The term Market leader means the company that has the largest share of sales in a particular market. ... Price leadership is an observation made of oligopic business behavior in which one company, usually the dominant competitor among several leads the way in determining prices, the others soon following. ... This article does not cite any references or sources. ... Unlit filtered cigarettes. ... The Robert F. Kennedy Department of Justice Building in Washington, D.C. “Justice Department” redirects here. ... This article is about anti-competitive business behavior. ... John Sherman The Sherman Antitrust Act (Sherman Act[1], July 2, 1890, ch. ... | logo_caption = | seal = US-FederalTradeCommission-Seal. ... The party distribution of Attorneys General by state. ... This article is about the U.S. state. ... This article is about the state. ... This article is about the U.S. state. ...

Two books were published about the Archer Daniels Midland (ADM) price-fixing case, that occurred during the mid-1990s, by authors that conducted several years of extensive investigation.^[8] The Archer Daniels Midland Company (NYSE: ADM), based in Decatur, Illinois, operates more than 270 plants worldwide, where cereal grains and oilseeds are processed into numerous products used in food, beverage, nutraceutical, industrial and animal feed markets worldwide. ... ADM is a three-letter acronym with multiple meanings, as described below: American Dream Machine, a nickname for the ADM-3A computer video terminal created by Lear-Seigler Inc. ... Price fixing is an agreement between business competitors to sell the same product or service at the same price. ...

Criticism on legislation

Economic libertarians such as the conclude that price fixing is inherently unstable and regulation does more harm than good. Companies can easily cheat on the cartel by secretly lowering its price and expanding in the market. New firms can enter the market. Also, it limits innovation because it discourages the creating of new, competing companies. ^[9] Economic libertarianism is the doctrine that government should not engage in economic interventionism, but only prohibit force and fraud. ...

Price fixing in Australia

Price fixing is illegal in Australia under the Trade Practices Act, the provisions of which are broadly similar to the US and Canadian prohibitions. The Act is administered and enforced by the Australian Competition and Consumer Commission. The ACCC Logo The Australian Competition and Consumer Commission (ACCC) is an independent Australian commonwealth government authority established in 1995 from the amalgamation of the Australian Trade Practices Commission (TPC) and the Prices Surveillance Authority, to protect consumer rights, business rights and obligations, perform industry regulation and price monitoring and...

Price fixing in United Kingdom

The Net Book Agreement was a public agreement between UK booksellers from 1900 to 1991 to sell new books only at the recommended retail price, in order to protect the revenues of smaller bookshops. The agreement collapsed in 1991 when the large book chain Dillons began discounting books, followed by rival Waterstones.[16] [17] The Net Book Agreement (NBA) was a British agreement between publishers and booksellers which set the prices at which books were to be sold to the public. ... Dillons is a grocery supermarket chain based in Hutchinson, Kansas, and the flagship banner of Dillon Stores Divison, one of the regional segments of The Kroger Company. ... Gower Street branch Waterstones is a chain of British bookshops. ...

Price-fixing cases in the rest of the world

In countries other than the United States, Canada, Australia and within the European Union, price-fixing is not usually illegal and is often practised. When the agreement to control price is sanctioned by a multilateral treaty or is entered by sovereign nations as opposed to individual firms, the cartel may be protected from lawsuits and criminal antitrust prosecution. This explains, for example, why OPEC, the global oil cartel, has not been prosecuted or successfully sued under U.S. antitrust law. International airline tickets have their prices fixed by agreement with the IATA, a practice for which there is a specific exemption in antitrust law. The first two pages of the Treaty of Brest-Litovsk, in (left to right) German, Hungarian, Bulgarian, Ottoman Turkish and Russian A treaty is an agreement under international law entered into by actors in international law, namely states and international organizations. ... For the American pop-punk band, see Cartel (band). ... This article is about anti-competitive business behavior. ... Not to be confused with APEC. OPEC Logo The Organization of the Petroleum Exporting Countries (OPEC) is an international cartel[1][2] made up of Algeria, Angola, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, Venezuela, and Ecuador (which rejoined OPRC in November 2007) . The... Petro redirects here. ... For the American pop-punk band, see Cartel (band). ... This article is about anti-competitive business behavior. ... The International Air Transport Association is an international trade organization of airlines headquarted in Montreal, Quebec, Canada. ... Antitrust is also the name for a movie, see Antitrust (movie) Antitrust or competition laws legislate against trade practices that undermine competitiveness or are considered to be unfair. ...

Under the EU commission's leniency programme whistleblowing firms which co-operate with the anti-trust authority see their prospective penalties either wiped out or reduced.^[10]

In October 2005, the Korean company Samsung pleaded guilty to conspiring with other companies, including Infineon and Hynix Semiconductor, to fix the price of dynamic random access memory (DRAM) chips. Samsung was the third company to be charged in connection with the international cartel and was slapped with a $300M fine, the second largest antitrust penalty in US history. In October 2004, four executives from Infineon, a German chip maker, received reduced sentences of 4 to 6 months in federal prison and $250,000 in fines after agreeing to aid the DoJ with their ongoing investigation of the conspiracy. Samsung Group is one of the largest South Korean business groupings. ... Infineon Technologies is a German manufacturer of integrated circuits and related products. ... Hynix Semiconductor Inc. ...

In 2006, the Government of France fined 13 perfume brands and three vendors for price collusion between 1997 and 2000. The brands include L'Oreal (4.1m euro), Pacific Creation Perfumes (90,000 euro), Chanel, LVMH's Sephora (9.4mill euro) and Hutchison Whampoa's Marionnaud (12.8mil euro).[18] International price fixing by private entities can be prosecuted under the antitrust laws of many countries. Examples of prosecuted international cartels are those that controlled the prices and output of lysine, citric acid, graphite electrodes, and bulk vitamins. [19] This article is about the political and administrative structures of the French government. ... The LOréal Group ( PAR: 120321), headquartered in Clichy, France, is the worlds leading company in cosmetics and beauty. ... Not to be confused with Channel. ... LVMH Moët Hennessy Louis Vuitton S.A. (Euronext: MC), usually shortened to LVMH, is a French holding company and the worlds largest luxury goods conglomerate. ... Sephora is a chain of beauty product stores founded in France in 1983 and acquired by Paris-based LVMH in 1997. ... Hutchison Whampoa Limited or HWL (Traditional Chinese: , SEHK: 0013) of Hong Kong is a Fortune 500 company and one of the largest companies listed on the Hong Kong Stock Exchange. ... Lysine is one of the 20 amino acids normally found in proteins. ... Citric acid is a weak organic acid found in citrus fruits. ... Retinol (Vitamin A) Vitamins are nutrients required in very small amounts for essential metabolic reactions in the body [1]. The term vitamin does not encompass other essential nutrients such as dietary minerals, essential fatty acids, or essential amino acids. ...

See also

• Price control
• Collusion
• antitrust
• cartel
• monopoly
• oligopoly
• Variable pricing
• Net Book Agreement
• Vendor lock-in
• Sherman Antitrust Act
• US Department of Justice
• Trade Practices Act 1974 (Australia)
• List of Corporate Executives Charged with Crimes
• DRAM Price Fixing
• Resale price maintenance

In economics, incomes policies are wage and price controls used to fight inflation. ... Look up collusion in Wiktionary, the free dictionary. ... This article is about anti-competitive business behavior. ... For the American pop-punk band, see Cartel (band). ... This article is about the economic term. ... This article does not cite any references or sources. ... Most firms use a fixed price policy. ... The Net Book Agreement (NBA) was a British agreement between publishers and booksellers which set the prices at which books were to be sold to the public. ... In economics, vendor lock-in, also known as proprietary lock-in, customer lock-in, lock-in is where a customer is dependent on a vendor for products and services and cannot move to another vendor without substantial switching costs, real and/or perceived. ... John Sherman The Sherman Antitrust Act (Sherman Act[1], July 2, 1890, ch. ... The United States Department of Justice (DOJ) is a Cabinet department in the United States government designed to enforce the law and defend the interests of the United States according to the law and to ensure fair and impartial administration of justice for all Americans. ... The Trade Practices Act 1974 is an act of the Parliament of Australia. ... In 2002, armed with the Sherman Antitrust Act, the US Department of Justice began a probe in the the activities of DRAM manufacturers. ... Resale price maintenance is the practice whereby a manufacturer requires distributors of their product to sell at certain prices, or set a minimum price. ...

Footnotes

1. ^ [1]
2. ^ Antitrust Law Developments (2002); United States v. Socony-Vacuum Oil Co., 310 US 150 (1940) [2]
3. ^ The Antitrust Laws A Primer (1993); Art Publishers Association, Bulletin: Be Careful About Antitrust Law (Feb. 2000). [3]
4. ^ Antitrust Law Developments (2002); Art Publishers Association, Bulletin: Be Careful About Antitrust Law (Feb. 2000). [4]
5. ^ Art Publishers Association, Bulletin: Be Careful About Antitrust Law (Feb. 2000). [5]
6. ^ The Antitrust Laws A Primer (1993); Antitrust Outline Northwestern University [6]
7. ^ Antitrust Enforcement [7]; National Association of Attorneys General Antitrust Project [8]; Art Publishers Association, Bulletin: Be Careful About Antitrust Law (Feb. 2000). [9]
8. ^ The Informant, by award-winning author and former New York Times writer, Kurt Eichenwald, and Rats In The Grain, by Ivy League lawyer, James B. Lieber. [10] [11] [12] [13] [14] [15] The ADM case was prosecuted in the USA but involved an international conspiracy.
9. ^ http://www.cato.org/pubs/regulation/regv12n2/reg12n2-debow.html
10. ^ "Heineken and Grolsch fined for price-fixing", The Guardian. Retrieved on 2007-08-01. 

The New York Times is an internationally known daily newspaper published in New York City and distributed in the United States and many other nations worldwide. ... Kurt Alexander Eichenwald (born June 28, 1961) was a writer and investigative reporter at The New York Times newspaper until October 2006, when he resigned to become an investigative reporter with Condé Nasts forthcoming business magazine, Portfolio -- which plans to mail out its premier issue in late April 2007. ... For other uses, see Ivy League (disambiguation). ... ADM is a three-letter acronym with multiple meanings, as described below: American Dream Machine, a nickname for the ADM-3A computer video terminal created by Lear-Seigler Inc. ... For other uses, see Guardian. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ... is the 213th day of the year (214th in leap years) in the Gregorian calendar. ...

External links

• US Department of Justice Antitrust Resource Manual
• Identifying Horizontal Price Fixing in the Electronic Marketplace
• SONY Accused of Price Fixing in the UK - Nov. 15, 2005
• Antitrust Enforcement
• Art Publishers Association, Bulletin: Be Careful About Antitrust Law (Feb. 2000)
• US Department of Justice Website, Samsung Pleads Guilty to Price Fixing - Oct. 5, 2005
• US Department of Justice Website, Infineon Pleads Guilty to Price Fixing - Oct. 2004
• Antitrust settlement in Nevada price-fixing case
• In Defense of Price Fixing by Sean Gabb
• LVMH, L'Oreal, PPR fined for perfume price collusion; LVMH plans appeal Forbes