Comments on: 5 Brazen Examples of Price Fixing

By: Tony

Tony — Fri, 25 Sep 2009 04:45:27 +0000

I agree with That Jeff, but there’s another point that seems to have been overlooked. The victims in most price-fixing scenarios are you and I, yet we don’t receive a dime of the fines imposed.

For example, in the UK would it not have been more “just” if Dairy Crest and Robert Wiseman Dairies had been made to subsidize the shelf price of dairy products for a time period similar to the duration of the scam? At least that way their ill-gotten gains would have returned (to some degree) to the people who were swindled.

By: Peter

Peter — Thu, 24 Sep 2009 23:13:42 +0000

Stephen,

Medicare and Medicaid have been fixing prices for years, from physician payment rates to drug prices. The government has been preventing the market from working properly, and we now see the results of it in the messed up healthcare system:

Shortages and rationing.

By: Wallis Lane

Wallis Lane — Thu, 24 Sep 2009 22:30:50 +0000

You forgot the King of the Hill episode about the Arlen, TX price-fixing cartel led by Strickland Propane.

By: That Jeff

That Jeff — Thu, 24 Sep 2009 18:21:05 +0000

I think they missed a big scam while reporting on these scams. The fact that (A) the offending company usually gets fined for less than they made while (B) whatever government fined them gets the ill-gotten money on behalf of “those poor victims.” All the while the actual people who come up with the price fixing usually spend little (if any) time in jail.

I haven’t watched “The Informant” but I did see the news article on the ADM case several years back. Does the movie mention that the execs involved got something like sixteen months in minimal security for stealing several billions in price fixing while the whistleblower got fourteen-sixteen YEARS in maximum security jail for embezzling eight million dollars? Ridiculous.

By: Carolyn

Carolyn — Thu, 24 Sep 2009 17:57:48 +0000

Medicare is essentially the standard by which most, if not all, private insurers will go by when determining coverage of procedures, exams and medications, as well as how much the clinician and hospital or clinic will receive for those services.
If it’s not on the Medicare formulary, most likely it’s not going to be covered by any private policy.

By: Jim

Jim — Thu, 24 Sep 2009 17:44:50 +0000

De Beers is currently involved in a class action lawsuit over driving up the price of diamonds. Don’t know if this could be considered price fixing, but definately not on the level.

By: Stephen

Stephen — Thu, 24 Sep 2009 17:31:22 +0000

I’m naive and didn’t know that Medicare and Medicaid were price fixing. I always thought they took care of different people.

By: Peter

Peter — Thu, 24 Sep 2009 16:51:34 +0000

The top example of price fixing that comes to mind:

Medicare and Medicaid.

On second thought, there are probably thousands of examples of government-induced price-fixing.

By: TXCherokee

TXCherokee — Thu, 24 Sep 2009 16:18:46 +0000

“The anti-competitive behavior supposedly cost customers close to 270 million pounds over the course of the scam, and the companies involved faced fines that maxed out at a combined 116 million pounds.”

Proving once again that crime, or at least white collar crime, does indeed, pay.

By: Jonny

Jonny — Thu, 24 Sep 2009 15:21:47 +0000

I don’t recall the details, but Major League Baseball owners were convicted in court of collusion (at least twice) in the 1980s.

Baseball players had successfully fought to get free agency in the 70s (thanks largely to Curt Flood), so the owners decided that they didn’t want to be bidding against one another and driving up their salary expenses, so they colluded to keep offers to free agents artificially lower than market value.

I beleive the cases were referred to as Collusion I and Collusion II.