Бағаны келісіп белгілеу және оның салдары

Agreement over prices between participants on the same side in a market

Price fixing is an anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand. The intent of price fixing may be to push the price of a product as high as possible, generally leading to profits for all sellers but may also have the goal to fix, peg, discount, or stabilize prices. The defining characteristic of price fixing is any agreement regarding price, whether expressed or implied. Price fixing requires a conspiracy between sellers or buyers. The purpose is to coordinate pricing for mutual benefit of the traders. For example, manufacturers and retailers may conspire to sell at a common "retail" price; set a common minimum sales price, where sellers agree not to discount the sales price below the agreed to minimum price; buy the product from a supplier at a specified maximum price; adhere to a price book or list price; engage in cooperative price advertising; standardize financial credit terms offered to purchasers; use uniform trade in allowances; limit discounts; discontinue a free service or fix the price of one component of an overall service; adhere uniformly to previously announced prices and terms of sale; establish uniform costs and markups; impose mandatory surcharges; purposefully reduce output or sales in order to charge higher prices; or purposefully share or pool markets, territories, or customers. Price fixing is permitted in some markets but not others; where allowed, it is often known as resale price maintenance or retail price maintenance. Not all similar prices or price changes at the same time are price fixing. These situations are often normal market phenomena. For example, the price of agricultural products such as wheat basically do not differ too much, because such agricultural products have no characteristics and are essentially the same, and their price will only change slightly at the same time. If a natural disaster occurs, the price of all affected wheat will rise at the same time. And the increase in consumer demand may also cause the prices of products with limited supply to rise at the same time. In neo classical economics, price fixing is inefficient. The anti competitive agreement by producers to fix prices above the market price transfers some of the consumer surplus to those producers and also results in a deadweight loss. International price fixing by private entities can be prosecuted under the antitrust laws of many countries. Examples of prosecuted international cartels are those that controlled the prices and output of lysine, citric acid, graphite electrodes, and bulk vitamins.

In the United States, price fixing can be prosecuted as a criminal federal offense under Section 1 of the Sherman Antitrust Act. Criminal prosecutions must be handled by the U. S. Department of Justice, but the Federal Trade Commission also has jurisdiction for civil antitrust violations. Many state attorneys general also bring antitrust cases and have antitrust offices, such as Virginia, New York, and California. Further, where price fixing is used as an artifice to defraud a U. S. government agency into paying more than market value, the U. S. attorney may proceed under the False Claims Act. Private individuals or organizations may file lawsuits for triple damages for antitrust violations and, depending on the law, recover attorneys fees and costs expended on prosecution of a case. If the case at hand also violates the False Claims Act, in addition to the Sherman Act, private individuals may also bring a civil action in the name of the United States under the Qui Tam provision of The False Claims Act. Under American law, exchanging prices among competitors can also violate the antitrust laws. That includes exchanging prices with the intent to fix prices or the exchange affecting the prices individual competitors set. Proof that competitors have shared prices can be used as part of the evidence of an illegal price fixing agreement. Vertical price fixing includes a manufacturer's attempt to control the price of its product at retail. In State Oil Co. v. Khan, the US Supreme Court held that vertical price fixing is no longer considered a per se violation of the Sherman Act, but horizontal price fixing is still considered a breach of the Sherman Act. Also in 2008, the defendants of United States v LG Display Co., United States v. Chunghwa Picture Tubes, and United States v. Sharp Corporation, heard in the Northern District of California, agreed to pay a total sum of $585 million to settle their prosecutions for conspiring to fix prices of liquid crystal display panels. That was the second largest amount awarded under the Sherman Act in history. It does not matter if the price agreed upon is reasonable or for a good or altruistic cause or the agreement is unspoken and tacit. In the United States, price fixing also includes agreements to hold prices the same, discount prices (even if based on financial need or income), set credit terms, agree on a price schedule or scale, adopt a common formula to figure prices, ban price advertising, or agree to adhere to prices that are announced.

Under the EU commission's leniency programme, whistleblowing firms that co operate with the antitrust authority see their prospective penalties either wiped out or reduced.

British competition law prohibits almost any attempt to fix prices. The Net Book Agreement was a public agreement between UK booksellers from 1900 to 1991 to sell new books only at the recommended retail price to protect the revenues of smaller bookshops. The agreement collapsed in 1991, when the large book chain Dillons began discounting books, followed by rival Waterstones. However, price fixing is still legal in the magazine and newspaper distribution industry, and sometimes in the motion picture industry. Retailers who sell at below cover price are subject to withdrawal of supply. The Office of Fair Trading has given its approval to the status quo.

When the agreement to control price is sanctioned by a multilateral treaty or is entered by sovereign nations as opposed to individual firms, the cartel may be protected from lawsuits and criminal antitrust prosecution. That is why OPEC, the global petroleum cartel, has not been prosecuted or successfully sued under US antitrust law. International airline tickets have their prices fixed by agreement with the IATA, a practice for which there is a specific exemption in antitrust law.

Between 1995 and 2000 music companies were found to have used illegal marketing agreements such as minimum advertised pricing to artificially inflate prices of compact discs in order to end price wars by discounters such as Best Buy and Target in the early 1990s. It is estimated customers were overcharged by nearly $500 million and up to $5 per album. A settlement in 2002 included the music publishers and distributors; Sony Music, Warner Music, Bertelsmann Music Group, EMI Music, Universal Music as well as retailers Musicland, Trans World Entertainment and Tower Records. In restitution for price fixing they agreed to pay a $67.4 million fine distribute $75.7 million in CDs to public and non profit groups.

In October 2005, the Korean company Samsung pleaded guilty to conspiring with other companies, including Infineon and Hynix Semiconductor, to fix the price of dynamic random access memory (DRAM) chips. Samsung was the third company to be charged in connection with the international cartel and was fined $300 million, the second largest antitrust penalty in US history. In October 2004, four executives from Infineon, a German chip maker, received reduced sentences of 4 to 6 months in federal prison and $250,000 in fines after agreeing to aid the U. S. Department of Justice with their ongoing investigation of the conspiracy.

In March 2018, the European Commission fined eight firms, mostly Japanese companies, €254 million for operating an illegal price cartel for capacitors. The two largest players were Nippon Chemi Con which was fined €98 million and Hitachi Chemical which was fined €18 million.

In 2008 in the US, LG Display Co., Chunghwa Picture Tubes and Sharp Corp., agreed to plead guilty and pay $585 million in criminal fines for conspiring to fix prices of liquid crystal display panels. South Korea–based LG Display would pay $400 million, the second highest criminal fine that the US Justice Department antitrust division has ever imposed. Chunghwa would pay $65 million for conspiring with LG Display and other unnamed companies and Sharp would pay $120 million, according to the department. In 2010, the EU fined LG Display €215 million for its part in the LCD price fixing scheme. Other companies were fined for a combined total of €648.9 million, including Chimei Innolux, AU Optronics, Chunghwa Picture Tubes Ltd., and HannStar Display Corp. LG Display said it is considering appealing the fine.

In late 2005/early 2006, Lufthansa and Virgin Atlantic came forward about their involvement in large price fixing schemes for cargo and passenger surcharges in which 21 airlines were involved since 2000 (amongst which were British Airways, Korean Air, and Air France KLM). U. S. Department of Justice fined the airlines a total of $1.7 billion, charged 19 executives with wrongdoing and four received prison terms. In December 2008, the New Zealand Commerce Commission filed legal proceedings against 13 airlines in the New Zealand High Court. According to the Commission, the carriers "colluded to raise the price of [freight] by imposing fuel charges for more than seven years". In 2013 Air New Zealand was the final airline of the 13 to settle. The Commission noted that it might involve up to 60 airlines. In 2009 the Commission said overseas competition authorities were also investigating the air cargo market, including the US and Australia where fines had been imposed.

During the COVID 19 pandemic, companies such as Pfizer and Moderna announced rates for their coronavirus vaccines that would differ based on deals established with various governments. Executive orders were enacted in the United States to lower prescription drug costs which was claimed by Pfizer's CEO to cause "enormous destruction" to the pharmaceutical industry.

When prices are determined between various companies, it may affect consumers' choices to a certain extent, and affect small businesses that rely on these suppliers. Taking freight as an example, many products are now transported by freight through various channels. If the freight price is artificially increased, it will have an impact on the entire supply chain. For example, it will cause the price of goods and services to increase, and it will also affect consumers' choices.