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Price Fixing

whitecollar

Price fixing is a federal crime in the U.S. and can have serious consequences for those who are convicted. Because price fixing is almost always committed in secret, prosecutors are often forced to rely purely on circumstantial evidence in prosecuting an alleged crime. This can lead to unfair verdicts, making it especially important for those who are being investigated for price fixing to obtain the advice of an experienced white collar crime attorney who can help them build a solid defense.

Price Fixing Defined

Price fixing is defined as any agreement, whether written, verbal, or inferred from a person’s conduct among competitors that raises, lowers, or stabilizes prices or competitive terms regarding a particular product. Instead, all American businesses are required to establish their own prices and terms on an individual basis. However, just because multiple businesses change the price of a commodity at the same time does not mean that the change was the result of price fixing. Often, price changes are merely the result of fluctuations in the market. For instance, an increase in consumer demand for a product can cause prices to uniformly increase across an entire industry.

The crime of price fixing also encompasses situations where competitors reach an agreement on other terms, including, but not limited to:

  • Shipping fees;
  • Warranties;
  • Promotions;
  • Credit terms;
  • Production quotas;
  • Financing rates; and
  • Discount programs.

An agreement between companies that has the result of restricting production, output, or sales is also grounds for a charge of price fixing because all of these actions could potentially drive up prices.

Types of Price Fixing

Generally, there are two types of price fixing agreements. The first are known as horizontal price fixing schemes, and include situations where two competitors collude to fix prices or other business terms. Vertical price fixing, on the other hand, occurs when companies from different parts of the supply chain, including manufacturers, distributors, suppliers, and retailers make agreements with each other. Courts have held that vertical price fixing is not always unlawful and should be evaluated on a case by case basis. When making these determinations, courts often look at a number of factors, including:

  • Whether an actual agreement among several defendants existed;
  • Whether an agreement produced anti-competitive effects;
  • Whether the objects or conduct supporting an agreement were illegal;
  • Whether anyone was actually injured;
  • Whether the agreement was catalyzed by retailers and wholesalers rather than manufacturers; and
  • Whether the party insisting on the agreement had a significant amount of power.

Convictions for price fixing can result in severe penalties, including heavy fines and a prison sentence of up to ten years.

Contact an Experienced White Collar Crime Attorney Today

Price fixing is considered a serious white collar crime that carries the threat of jail time and fines of up to $1 million, so if you live in south Florida and are being investigated for price fixing or another type of antitrust violation, please contact Jeffrey S. Weiner, P.A. Criminal Defense Attorneys by calling 305-670-9919 and a member of our dedicated legal team will assist you in setting up a free consultation with an experienced white collar crime attorney who can explain your legal options.

Resource:

ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/dealings-competitors/price-fixing

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