Price fixing is a serious antitrust violation that carries significant legal consequences. It involves an agreement between competitors to set, maintain, or control prices at a certain level. This practice is illegal under the Sherman Act in the United States and similar laws in other countries.

Consequences of Price Fixing

Civil Penalties

• Treble damages: Private parties injured by price fixing can sue for treble (triple) damages under the antitrust laws. This means that if a plaintiff can prove damages of $100,000, they can recover up to $300,000.
• Injunctive relief: Courts can order defendants to stop engaging in price fixing and take other corrective actions.
• Attorney's fees: Plaintiffs who successfully sue for price fixing can recover their attorney's fees.

Criminal Penalties

Price fixing can also result in criminal charges. If found guilty, individuals and corporations can face:

• Imprisonment: Individuals can be sentenced to prison for up to 10 years.
• Fines: Corporations can be fined up to $100 million per offense.
• Restitution: Defendants may be ordered to pay restitution to injured parties.
• Corporate officer liability: Corporate officers who knowingly participate in price fixing can be held personally liable.

Other Consequences

Beyond financial penalties, this activity can have severe reputational damage for a company. It can lead to negative publicity, loss of consumer trust, and damage to relationships with business partners.

How Price Fixing is Proved

To prove price fixing, the government or a private plaintiff must typically demonstrate:

• An agreement: There was an agreement between competitors to fix prices. This agreement can be explicit or implied.
• Market power: The defendants had market power, meaning they could control prices.
• Anticompetitive effects: The agreement harmed competition and consumers.

It is important to note that even the appearance of collusion can be enough to trigger an antitrust investigation. Therefore, businesses must be careful to avoid any actions that could be construed in this manner.

While this overview provides a general understanding of the potential legal consequences of such activity, it is crucial to consult with an attorney for advice on a specific situation. The laws and penalties can vary depending on jurisdiction and the specific circumstances of the case.

One online legal resource is Valerie Del Grosso at Del Grosso Law Ltd.. Tell her Stephen B. Henry sent you.

Got questions about, or need more help on, the potential legal consequences of price fixing or related issues? Please feel free to reach out to Stephen B. Henry.

 

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