NCJ Number
44888
Journal
ECONOMIC CRIME DIGEST Volume: 4 Issue: 1 Dated: (JULY-AUGUST 1977) Pages: 13-19
Date Published
1977
Length
7 pages
Annotation
THE BASIC ELEMENTS OF ANTITRUST LAW ARE OUTLINED FOR PURCHASING OFFICIALS SO THAT THEY CAN HELP ECONOMIC CRIME UNITS IN DETECTING AND PREVENTING A NUMBER OF ECONOMIC OFFENSES DIRECTED AGAINST THE PUBLIC TREASURY.
Abstract
FEDERAL AND MOST STATE LAWS RESTRICT BUSINESS ARRANGEMENTS WHICH ARE 'IN RESTRAINT OF TRADE,' A TERM WHICH CAN INCLUDE SUCH PRACTICES AS BOYCOTTING OF CERTAIN BUSINESSES, PRICE DISCRIMINATION, AND AGREEMENTS TO LIMIT OUTPUT. PRICE FIXING HAS SEVERAL FORMS. HORIZONTAL AND VERTICAL PRICE FIXING CONSIST OF ANY AGREEMENTS OR INFORMAL ARRANGEMENTS BY WHICH PRICES OR BIDS ARE FIXED BETWEEN INDEPENDENT BUSINESS UNITS. THE DIRECTION OF THE CHANGE (RAISING OR LOWERING PRICES) AND THE MOTIVE ARE IRRELEVANT. STATEMENTS WHICH MAY BE INDICATIVE OF PRICE FIXING INCLUDE: ANY REFERENCES TO 'INDUSTRY-WIDE' OR 'MARKET-WIDE' PRICING; ANY REFERENCES TO 'INDUSTRY SELF-REGULATION'; ANY REFERENCES THAT A COMPANY HAS BEEN MEETING WITH ITS COMPETITORS; AND ANY COMMENTS THAT THE PRICES OF MATERIALS ARE SET BY OTHERS AND MUST BE PASSED ON AS SET BY AGREEMENT. BID RIGGING AND ALLOCATION OF CUSTOMERS MAY INVOLVE: AGREEMENTS NOT TO BID BELOW A MINIMUM PRICE; ROTATING BIDDING, IN WHICH EACH OF SEVERAL COMPETITORS GETS ITS TURN TO DELIVER THE LOWEST BID WHILE OTHERS SUBMIT TOKEN HIGH BIDS. GROUP BOYCOTTS AND REFUSALS TO DEAL ARE OTHER ANTITRUST VIOLATIONS; THEY INVOLVE ANY COMBINATION OR AGREEMENT AMONG TWO OR MORE COMPETITORS NOT TO DEAL WITH A PARTICULAR BUSINESS ENTITY OR TO DEAL WITH THEM ONLY UPON CERTAIN CONDITIONS. TIE-INS, ANOTHER TYPE OF VIOLATION, INVOLVE THE USE OF MARKET POWER BY A COMMERCIAL ENTITY TO REQUIRE THE PURCHASE OF ADDITIONAL ARTICLES OR SERVICES THE BUYER MAY NOT WANT. THE MARKET POWER CAN DERIVE FROM A PATENT, FROM HAVING A UNIQUE PRODUCT, OR FROM PROBLEMS IN OBTAINING A COMPETITOR'S PRODUCT. PREDATORY PRACTICES INCLUDE PRICING AN ARTICLE AT OR BELOW COST IN ORDER TO DRIVE A COMPETITOR OUT OF BUSINESS. ONCE COMPETITION IS ELIMINATED, THE VIOLATOR CAN OVERCHARGE. PRICE DISCRIMINATION CONSISTS OF PRICING TO ONE CUSTOMER DIFFERENTLY THAN TO ANOTHER WITHOUT A COST OR OTHER JUSTIFICATION FOR THE DIFFERENCE. THE EFFECT IS TO DRIVE OUT COMPETITORS OR HARM THE COMPETITIVE SYSTEM. OTHER UNFAIR PRACTICES MAY INCLUDE USING INFORMANTS, PRACTICING RACIAL DISCRIMINATION IN THE BUSINESS, AND FALSELY MALIGNING THE REPUTATION OF A COMPETITOR. A FORM IS INCLUDED IN THE GUIDE FOR USE BY A PURCHASING AGENT IN REPORTING ANY SUSPECTED ANTITRUST ABUSES.