Identifying Price-Fixing Activities: Price fixing generally involves any agreement between competitors to tamper with prices or price levels, or terms and conditions of sale (e.g., interest rates for consumer credit), for commodities or services. Generally speaking, price fixing involves an agreement by two or more competing producers of a specific commodity, or competing providers of a particular service, in a defined geographic area, to raise, set or maintain prices for their goods or services. It may take place at either the wholesale or retail level and, although it need not involve every competitor in a particular market, it usually involves most of the competitors in the particular market.
In its most common form, price fixing is an agreement to raise the price of a product or service to or by a specific amount, e.g., all widget manufacturers agree to a 5 percent increase in price effective June 1. Other manifestations of price fixing include the following:
1. Agreements to establish or adhere to uniform price discounts;
2. Agreements to eliminate discounts to all customers or certain types of customers;
3. Agreements to adopt a specific formula for the computation of selling prices;
4. Agreements on terms and conditions of sale, including uniform freight charges, quantity discounts, or other differentials that affect the actual price of the product; and
5. Agreements not to advertise prices or to refuse to sell the product through any bidding process.
The fact that all competitors charge the same price, or use the same terms of sale, is not, by itself, evidence of a price-fixing conspiracy because similar prices may in fact be the outcome of competition. However, where price increases are announced by all competitors at the same time, or prior to a uniform effective date, there is a substantial likelihood of collusion.
Further, the fact that all prices are not identical does not indicate the absence of a conspiracy. For example, one company may have traditionally sold at a price lower than the others and, when a general increase in price occurs, the company with the lower price may adopt the same percentage or absolute increase as the others.
Records of changes or prices, including price lists, price-change notices and company memoranda relating to price analysis, are all helpful in determining the existence of a conspiracy. In addition, evidence of competitors' meetings or telephone conversations raise the possibility of collusion, and such evidence usually comprises the most effective circumstantial form of proof in price-fixing cases. Antitrust conspiracy cases, however, like other conspiracy cases, generally require testimony from a member of the conspiracy.
