Price fixing is prohibited by federal and state antitrust laws. Price fixing occurs when two or more competitors agree to reduce or eliminate competition for the pricing of goods or services by agreeing to “fix” the prices of those goods or services to their customers.
Price fixing agreements include schemes to:
- increase, maintain, or stabilize prices,
- determine prices through an agreed upon formula,
- refrain from advertising prices,
- offer and maintain discounts at agreed upon rates, or offer no discounts at all,
- limit credit offers, or
- reduce supply.
Price fixing hinders competition because it interferes with the natural supply and demand pricing that occurs in a free marketplace. This interference forces buyers to pay artificially inflated prices for goods and services.
Bid rigging is an agreement by companies asked to submit competitive bids to supply products or services. The companies arrange for a particular business to win a contract by agreeing that:
- one or more competitors will refrain from bidding for the contract (bid suppression), or
- one or more competitors will submit bids that will not be accepted for price or other reasons (cover, courtesy, or complementary bidding).
Bid rigging conspiracies that extend to more than one contract may also involve an agreement that competitors will take turns submitting the lowest bid (bid rotation). The intent and most frequent effect of a bid rigging conspiracy is increased profit for the winning company and increased cost for the entity awarding the contract.
Our antitrust lawyers represent businesses and consumers who suffer economic losses from the effects of price fixing and bid rigging.
Federal price fixing actions by direct and indirect purchasers may be brought under the Clayton Act, but only direct purchasers may recover damages under federal law. A direct purchaser is a buyer that purchased a good or service directly from a company that entered into a price fixing agreement. An indirect purchaser is one that bought the good or service from a direct purchaser.
The Clayton Act allows direct purchasers of a good or service (consumers or businesses) harmed by any antitrust violation, including price fixing, to recover treble damages from the sellers in a civil antitrust action. The Clayton Act also provides for injunctive relief by both direct and indirect purchasers threatened with injury from antitrust violations.
In contrast to federal antitrust laws, many state antitrust laws allow indirect purchasers to recover monetary damages in price fixing and other antitrust civil actions. This often results in actions by indirect purchasers and direct purchasers harmed by the same price fixing scheme.
REMEDIES FOR PRICE FIXING
AND BID RIGGING
Businesses and consumers may seek damages as well as injunctive relief for harm suffered as a result of a price fixing or bid rigging conspiracy. Federal price fixing and bid rigging actions award plaintiffs three times their actual damages (treble damages), attorneys’ fees, and other costs associated with the action. Treble damages and injunctions against further price fixing and bid rigging activity are intended to deter violators from future antitrust violations.
BEST LAWYERS HAS NAMED KOHN, SWIFT & GRAF AS A 2023 “BEST LAW FIRM”
Kohn, Swift & Graf, P.C. has achieved a Tier 1 ranking in Philadelphia in the area of antitrust law.
“The U.S. News – Best Lawyers® “Best Law Firms” rankings are based on a rigorous evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys, and review of additional information provided by law firms as part of the formal submission process. Firms who have at least one lawyer who has been recognized in the previous edition of Best Lawyers in a practice area and metro area currently ranked by “Best Law Firms” are eligible to receive a ranking.”
Joseph C. Kohn, William E. Hoese, Robert J. LaRocca, and Douglas A. Abrahams were selected for inclusion in Best Lawyers© in the area of antitrust litigation in 2021.
Zahra R. Dean was selected for inclusion in Best Lawyers© “Ones to Watch” in the area of mass torts litigation/class actions in 2021.