Glossary
Price Fixing
An agreement between competitors to raise, lower, or hold prices steady instead of letting the market set them. It is illegal under federal antitrust law, and overcharged buyers can sue for three times their losses.
Price fixing is when businesses that are supposed to compete agree on prices. The agreement does not have to be written or formal. It can be a handshake, coded messages, an agreement on discounts or surcharges, or a shared plan to cut supply so prices rise. What matters is that competitors coordinated instead of competing.
The FTC defines price fixing as an agreement, written, verbal, or inferred from conduct, among competitors to raise, lower, maintain, or stabilize prices or price levels. Under Section 1 of the Sherman Act it is treated as illegal on its face, so the companies cannot defend it by arguing the prices were reasonable. Price fixing can be prosecuted as a crime by the Department of Justice.
Consumers who paid inflated prices can sue. Under Section 4 of the Clayton Act, a person injured by an antitrust violation recovers three times the damages sustained, plus the cost of suit and a reasonable attorney's fee. Price-fixing class actions often run for years and settle in stages, with different defendants settling at different times. Individual payments depend on how much of the product you bought and how many people file claims.
Recent examples involve meat, rental housing software that allegedly let landlords coordinate rents, and insurance. See the beef price-fixing settlement, the RealPage rent price-fixing lawsuit, the RealPage antitrust settlements, and the Lloyd's of London price-fixing settlement.
Related on Best Class Actions
Sources.
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