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What Is A Price-Fixing Scheme

A price-fixing scheme occurs when competitors agree to fix prices to undermine free enterprise and competition. Adam Smith observed in 1776 that business owners meeting for leisure would often conspire to raise prices. Applicable antitrust rules generally prohibit agreements between competitors about the prices they will charge customers or pay suppliers, as such collusion aims to stabilize or raise prices rather than engage in price competition, and it infringes on fair marketplace competition.

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Sean Chris Conson
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28 views

What Is A Price-Fixing Scheme

A price-fixing scheme occurs when competitors agree to fix prices to undermine free enterprise and competition. Adam Smith observed in 1776 that business owners meeting for leisure would often conspire to raise prices. Applicable antitrust rules generally prohibit agreements between competitors about the prices they will charge customers or pay suppliers, as such collusion aims to stabilize or raise prices rather than engage in price competition, and it infringes on fair marketplace competition.

Uploaded by

Sean Chris Conson
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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What is a price-fixing scheme?

Adam Smith said in his seminal text "The Wealth of Nations" back in 1776: "People of the same
trade seldom meet, even
for merriment and diversion, without it ending in a conspiracy to raise prices."
▸ Either declare a price war (that is, lower down prices) or agree to fix
prices.
▸ Price often is the principal way by which several firms compete.
▸ Conspiracy between competitors about the prices they will charge to
customers or pay to suppliers for goods or services are generally
amongst the most serious infringements of applicable antitrust rules.
▸ Often referred to as "collusion," and in stronger term as "economic
conspiracy," this sort of agreement undermines the system of free
enterprise.
▸ Conspiracy between competitors which have the effect of stabilizing
or raising prices or profit margins, agreements on price initiatives or
price targets, price ranges or price recommendations, and collusion
between competitors of "floor" or minimum prices are generally illegal
under applicable antitrust laws.
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