What is price fixing?
Price fixing occurs when supposedly competing businesses agree to “fix” the prices for goods and services.
Price fixing is a serious form of anti-competitive conduct and could lead to severe penalties for the companies and individuals involved.
Different forms of price fixing cartels
Competitors might agree to fix prices in the following ways:
- Stick to a specified price or a price range
- Fix a certain amount/percentage of price increases
- Fix elements of price such as discounts, commissions, rebates, promotions, and credit terms
- Adopt a standard formula to calculate prices/profit margins
- Eliminate or reduce discounts
- Maintain floor prices, a certain profit margin or a price schedule
- Maintain a certain price difference between different product sizes, quantities or types of products or services
- Not to quote a price without consulting competitors
- Not to charge less than prevailing prices in the market
Providing competitively sensitive information to a competitor, for example, intentions to increase prices, can also be considered as a form of price fixing even in the absence of an agreement. [See “Can I share Information with my competitors?”]
What should I do?
Businesses should set the prices of their goods or services independently. They must not communicate their pricing strategies in any way with competitors.
It’s My Call — five 20-second videos on price fixing
"Combat Price Fixing Cartels" brochure