Price Fixing

The agreement does not need to name a single price. Competitors can fix a list price, a minimum price, a discount ceiling, a surcharge, credit terms or the date of an increase. Exchanging plans about future prices can also be enough, because it removes the uncertainty that drives rivals to compete. The agreement can be written, spoken or only understood through a nod at a meeting. Price rigging is a looser label for the same family of conduct, including coordinated bids. Price fixing is horizontal, meaning between rivals. Agreements between a supplier and its distributors, such as resale price maintenance, are vertical and judged differently. Most authorities treat price fixing as unlawful by its nature, with no need to show actual harm. Many cases grow from something small, a remark at a trade lunch or a shared price list, which is why internal rules ban such contact outright.

Three car-hire firms at one airport discuss a rise in daily rates at a trade lunch. One says it plans to add a fuel surcharge next month and the others reply that they will do the same. Within weeks all three have introduced identical surcharges, and a customer complaint leads the authority to examine the lunch.