Price fixing: What you need to know
A key element of competition is price. It is essential that businesses set their prices independently. Price fixing is a serious form of anti-competitive behaviour that happens when two or more suppliers of a product or service come together and agree on pricing. Price fixing agreements do not need to be in writing or even to have been carried out; they are still against the law, simply making a cartel agreement is illegal.
Types of price fixing
Price fixing agreements can take many forms. As well as agreeing to charge the same price, members of a price fixing cartel may also illegally agree on discounts, margins, price differentials, price increases or minimum prices.
What’s the harm?
Price fixing agreements cause consumers and other businesses to pay more for goods and services without any additional benefit or value to the consumer. Where there is a lack of competition, for example where there is a price fixing cartel, both business and consumers suffer. The cost of doing business goes up.
Warning signs of price fixing
- Exchanging confidential or sensitive business information between competitors.
- Any evidence that two or more sellers of a particular product or service have agreed to price or discount their products in a certain way.
- Price changes by a number of sellers of similar products.
- Has the range of prices on offer suddenly narrowed?
- Have discounts suddenly changed?
- Price changes happening in regular and similar ways over time.
- Using similar phrases or explanations when price changes are announced.
The presence of any of these warning signs does not necessarily mean a cartel exists. The fact that prices are the same, or change at the same time, is not enough to establish that price fixing is taking place. However, you should be suspicious if several warning signs are present.
How to prevent price fixing
Businesses can take steps to prevent this anti-competitive behaviour. You must not discuss pricing with your competitors.
You may be breaking the law if you agree with another business:
- to charge the same prices
- to offer discounts or increase your prices at the same time
- to charge the same fees to intermediaries, for example retailers selling your products.
What to do if you suspect price fixing
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.
Any information that is provided to the CCPC is treated confidentially.
The CCPC will only disclose confidential information if it is required to do so by law. This may happen when:
- Disclosure is required in order to administer and enforce competition law.
- Disclosure is necessary to prevent a criminal offence.
- Disclosure is made in the course of legal proceedings.
Penalties for breaches
The Competition Act 2002 (as amended) sets out the rules regulating competitive processes in Ireland. This includes anti-competitive agreements and abuse of a dominant position. Under the Act, a conviction for cartel activity such as price fixing can carry criminal penalties of up to ten years imprisonment for individuals, and fines of up to €5 million or 10% of turnover for individuals and undertakings. A company director convicted of a cartel offence will automatically face disqualification from acting as a director for five years.
Cartel Immunity Programme
The CCPC in conjunction with the Director of Public Prosecutions operates a Cartel Immunity Programme. The programme means that a member of a cartel may avoid prosecution, including fines and jail time, if they come forward and reveal their involvement in illegal cartel activity to the CCPC. Find out more about the Cartel Immunity Programme.Return to Guidelines for Business