Corporations and Price Fixing

Cannone, Brian. dollar-sign. 2009. Accessed 14 Apr. 2011.
<http://www.fitnesssalestraining.com/access/upside-
leverage-fitness-marketing.html>

American consumers have the right to expect the best goods and services at the lowest prices from free and open competition.  Businesses often rely on a competition to accomplish this.  However competition only works when businesses set prices honestly and independently. When corporations conspire together prices are inflated and customers are cheated. According to Jean-Claude Bosch price fixing is an agreement among businesses to raise, fix, or maintain the price that their goods or services are sold for (par 2).  Studies from Bosch show that about 14% of American corporations have been caught engaging in price fixing schemes (par 3).  If that number were to include all of the corporations that engaged in price fixing schemes and were never caught the number would be substantially higher.  Certain pricing patterns can show if there is a high probability of price fixing.  According to the U.S. Department of Justice price fixing can occur if prices stay identical for long periods of time, price increases are not supported by increased costs, discounts are eliminated, or if businesses are charging higher prices to local customers than distant customers (par 17) .  Price fixing and other forms of corruption are illegal and are subject to criminal prosecution by the Antitrust Division of the United States Department of Justice.  According to the U.S. Department of Justice if a corporation is caught running price fixing schemes the maximum penalty is a $100 million fine and if an individual is caught running a price fixing scheme the maximum penalty is a $1 million fine and 10 years of prison (par 5).  When corporations fix prices they are stealing money from the general public just to increase their profits.  Corporate price fixing schemes are difficult to detect but people need to do whatever it takes to fight against it and eradicate it from the world. 

Works Cited

Bosch, Jean-Claude. The Profitability of Price Fixing: Evidence From Stock Market Reaction to Federal Indictments. May 1991. 14 April 2011 <http://www.jstor.org/stable/2109522>.

Cannone, Brian. dollar-sign. 2009. Accessed 14 Apr. 2011. <http://www.fitnesssalestraining.com/access/upside-leverage-fitness-marketing.html>

United States Department of Justice. Price Fixing, Bid Rigging, and Market Allocation Schemes: What They Are and What to Look For . January 2011. 14 April 2011 <http://www.justice.gov/atr/public/guidelines/211578.htm>.