Why do companies do price fixing

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Learn about our Financial Review Board. Businesses can take steps to prevent this anti-competitive behaviour. You must not discuss pricing with your competitors. If you suspect a case of potential price fixing, then you should contact the CCPC. You should provide the CCPC with any evidence you have of price fixing at the earliest opportunity, for example, emails or texts relating to price changes, notes of telephone conversations, or records of meetings. The CCPC may use this evidence to open and progress an investigation.

The CCPC will only disclose confidential information if it is required to do so by law. This may happen when:. The Competition Act as amended sets out the rules regulating competitive processes in Ireland. Not all price similarities, or price changes that occur at the same time, are the result of price fixing. On the contrary, they often result from normal market conditions. For example, prices of commodities such as wheat are often identical because the products are virtually identical, and the prices that farmers charge all rise and fall together without any agreement among them.

If a drought causes the supply of wheat to decline, the price to all affected farmers will increase. An increase in consumer demand can also cause uniformly high prices for a product in limited supply. Price fixing relates not only to prices, but also to other terms that affect prices to consumers, such as shipping fees, warranties, discount programs, or financing rates. Antitrust scrutiny may occur when competitors discuss the following topics:. A defendant is allowed to argue that there was no agreement, but if the government or a private party proves a plain price-fixing agreement, there is no defense to it.

Defendants may not justify their behavior by arguing that the prices were reasonable to consumers, were necessary to avoid cut-throat competition, or stimulated competition.

Example: A group of competing optometrists agreed not to participate in a vision care network unless the network raised reimbursement rates for patients covered by its plan. The optometrists refused to treat patients covered by the network plan, and, eventually, the company raised reimbursement rates.

Price fixing occurs when competitors agree on pricing rather than competing against each other. A price fixing cartel occurs when competitors make written, informal or verbal agreements or understandings on:. Price fixing agreements do not have to be formal; they can be a 'wink and a nod', made over a drink in the local pub, at an association meeting or at a social occasion. The important point is not how the agreement or understanding was made or even how effective it is, but that competitors are working out their prices collectively and not individually.

Sometimes competing businesses will sell goods or services at the same or similar price levels so that the price fluctuations of one are matched by equivalent fluctuations by the others.