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Price Fixing: Types, Identification, Legal Consequences

This page explains what price fixing is, how to identify it, and how a lawyer from ContractsCounsel can help you with its legal consequences.

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What is Price Fixing?

Price fixing is an illegal activity. It involves competitors creating agreements between them that prevent competition in their industry. By setting certain prices for their goods or services, instead of letting supply and demand determine the prices, they engage in price fixing.

Price fixing has many negative consequences, such as preventing lower costs for goods or services, which is unfair to consumers; and legal troubles for those involved.

Read the rest of this article to learn more about price fixing: its types, how it works, and when to hire a lawyer for assistance.

What are the Types of Price Fixing?

There are two main types of price fixing:

  • Horizontal Price Fixing. Competitors agree to set either a minimum or maximum price for their products. A prime example is if competitors in the same industry choose agreed-upon prices that are much higher than what would have been charged in the market.
  • Vertical Price Fixing. Members in the supply chain, such as manufacturers,

decide on a minimum or maximum price for their products. This influences the price strategy throughout all stages of production.

How Do You Identify Price Fixing?

Consumers can spot price fixing in the following ways:

  • The same product is being sold by different companies, and at high prices.
  • Competitors are using the same prices. This is a red flag that they might be in agreement over locking prices.
  • Prices for products are high, despite there not being a big demand for them.

In order for price fixing to be seen as illegal, from a legal standpoint it has to involve intent. It must be proven that the companies involved were trying to restrict competition in the industry. The price fixing must have occurred as a result of an agreement between them.

Clearly, this can be challenging to prove. What makes it even more trying is that the people involved usually don’t put their agreements in writing. They will try to restrict their communication to private, in-person meetings, so that their agreement can’t be traced.

What Should You Do if You Suspect Price Fixing?

As a consumer or whistleblower, you’re not powerless when faced with price fixing. There are important things you can do to deal with the illegal activity.

  • Report the price fixing. You can do this on the Federal Trade Commission (FTC).
  • Be aware of market trends. By doing this regularly, you’ll start to notice unfair or unusual prices.
  • Keep a record of evidence. If you’re aware of a price-fixing agreement, you should try to gather as much evidence as you can of the activities. This can include recording meeting minutes or text chats.
  • Contact a lawyer. If you’ve experienced financial losses as a result of price fixing, or you’re a whistleblower, you should hire a lawyer to help you.

What are the Consequences of Price Fixing?

People and companies that are involved in price-fixing agreements risk being investigated by the FBI and can be prosecuted for their actions, such as by paying hefty fines. They face up to 10 years of imprisonment and penalties of up to $1 million for individuals and $100 million for companies.

How is Price Fixing Investigated?

Price fixing can be challenging to identify, but antitrust authorities around the world use strategies to uncover them so that people guilty of the illegal practice can be caught out.

Investigations usually include market surveillance to notice any unusual pricing, analyzing pricing data with the use of algorithms, and making use of insider tips.

When pricing patterns are found to be unusual, they will be investigated further. This can include obtaining subpoenas, which provides access to a business’s records, or interviewing people who are suspected of being involved in the price fixing scheme.

Is Price Fixing the Same as Predatory Pricing?

Although they might seem similar, there are important differences between price fixing and predatory pricing.

Price fixing is when competitors agree to set their prices higher, whereas predatory pricing is when one company drops their prices so that their competitors can’t match them.

While it isn’t illegal to lower your prices, it can be deemed predatory if you are trying to push competitors out of the market. It’s an illegal activity, just like price fixing.

How Can a Lawyer Help with Price Fixing?

If you suspect price fixing, it’s important to reach out for legal guidance. A lawyer will help you to report the price fixing and start investigations into the activity. Other ways a lawyer can help you include the following:

  • They’ll assess the information and evidence you’ve provided. This will help you determine if there is illegal activity at play.
  • They’ll explain risks involved for you, such as if you’re working for someone who’s involved in the price fixing activity.
  • They’ll guide you on what to do and avoid doing so that they can protect you.
  • They’ll remind you of your rights in the situation.
  • If you’ve experienced financial harm from a price fixing scheme, your lawyer will help you to build a case. They’ll assist you with remedies, such as if you want to pursue damages.
  • They can also help you negotiate settlements to get compensated for the price fixing.
  • They’ll ensure you stay legally compliant throughout the situation so that you don’t put yourself at risk of legal or financial trouble.

Do you need a lawyer for price fixing?

If you need help from a lawyer, you should hire a lawyer from ContractsCounsel, an online legal network that connects clients with vetted lawyers.

They have several years of experience and the expertise to assist you with any and all fixed- pricing concerns, minimizing your risks and protecting your assets.


ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


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