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Q: price fixing ( Answered,   0 Comments )
Subject: price fixing
Category: Business and Money > Advertising and Marketing
Asked by: keeve29-ga
List Price: $2.00
Posted: 02 Oct 2002 10:14 PDT
Expires: 01 Nov 2002 09:14 PST
Question ID: 71691
describe the significance of the ability for the courts and the
government to control corporate acts of price fixing and other
collusinary practices.
Subject: Re: price fixing
Answered By: seedy-ga on 02 Oct 2002 13:32 PDT
This researcher has a working knowledge of the applicable laws and
actions which can be taken by the Justice Department in enforcing the
laws against price fixing or discriminatory pricing. sur am not an
attorney and GA's terms of service do not allow for legal advice to be
given at GA, so we strongly suggest consultation with an attorney
prior to taking any advice or action based on the answer provided.

The Sherman Act, the Clayton Act, and Robinson-Patman Act are
controlling laws regarding price fixing, discrimination in pricing,
and monopolies.  From a practical sense, these laws are used to
prosecute an individual or a company for engaging in conspiracy to fix
prices, fixing prices, discriminatory pricing, or attempts to
establish a monopoly in the sale of a product/service, or a monopoly
in a market, or market segment.

Collusion by two or more parties to establish pricing or to move in
concert on price increases/decreases is illegal in the USA.  Most of
the actions taken by the government are based on complaints by
customers, a class of consumers, or by visible practice.  It is
forbidden to meet with a competitor to discuss price increases,
pricing to individual customers, classes of customers, and/or market
segments.  How is collusion discovered?? Customers may balk at pricing
and find a strong intransigence on the part of all vendors in the
market to lower pricing. This could result in the Justice Department
being called and opening an investigation.  This investigation could
involve wire taps, raids on companies to obtain documents, and dealing
with the individuals to convince someone to "confess" in exchange for
light treatment in sentencing. The sentencing guidelines are such that
a three year prison term, felony conviction, and fine up to $350,000
can be imposed for violations of the law or conspiracy to violate the

Robinson-Patman details discriminatory practices in pricing which is
also illegal. i.e.:  A bid request comes out to be serviced by a
distributor. Two distributors call the manufacturer for pricing on
this bid. R-P requires that the same price be given to both
distributors to be in compliance with R-P.  Also, the manufacturer is
required to give the same price to two customers who are buying in the
same quantity with the same terms if it can be assumed these two
customers are going to compete with one another in the same market.
Vendors often ask if a special price it to "meet" a quote from a
competitor where deviation from standard pricing is allowed.

Some years ago, I don't have the case law in front of me, it was found
that two USA companies were fixing prices and allocating markets by
country in Europe. These companies were prosecuted under price fixing
laws in the USA although there was no evidence that they were doing
any price fixing in the USA. The thinking on this action was that the
price fixing/market allocation that they were doing in Europe
strengthened their positions illegally in the USA,
Links which can be helpful are shown below:  Sherman act  penalty

This is a complex area of the law which requires competent legal
advice in order to insure your compliance.

If I can clarify this information, please don't hesitate to ask before
rating the answer. sure to seek an attorney's advice before
taking any action which could be interpreted as having implications of
price fixing.


Search strategy on Google:  "Sherman Act"    "Clayton Act" 
"Robinson-Patman Act"
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