August 2007

What is Price Fixing? (a reminder...)

Price Fixing by definition is the process by which prices are fixed between competitors, most always artificially high. Recently, on a discussion list, the definition of price fixing was posted, whose source was cited as Wikipedia. While the explanation provided by Wikipedia was good, it was not complete.

Price fixing can occur, even when it wasn't intended! It only takes the slightest perception of price fixing in order for the charge to be raised. It doesn't need to be in writing, it doesn't need to be a dialog in which the subject is raised. It can be covert, and merely the raising of eyebrows, and a wink to convey the meaning, it can be at a bar, or your local chamber meeting. Which is why, it's imperative that we avoid speaking of prices on discussion lists.

Look at the price fixing cases that have been won:

• " Korean chipmaker Samsung agreed today to take a guilty plea and pay a $300 million fine for its participation in a global price-fixing scheme among memory chip manufacturers. (October 2005) Pasted from http://www.internetnews.com/bus-news/article.php/3556156>
  
  
• " NEW YORK - The five largest music companies and three of the USA's largest music retailers agreed Monday to pay $67.4 million and distribute $75.7 million in CDs to public and non-profit groups to settle a lawsuit led by New York and Florida over alleged price-fixing in the late 1990s. (September 2002) Pasted from http://www.usatoday.com/life/music/news/2002-09-30-cd-settlement_x.htm>
  
  

" If nothing else, the US DoJ (Department of Justice) is remarkably good at nailing foreign memory makers for price-fixing. Hynix Semiconductor, it emerged today, is the latest firm to
plead guilty in a far-reaching DRAM scandal and has agreed to pay the DoJ a $185m fine. (April 2005) Pasted from http://www.theregister.co.uk/2005/04/21/hynix_fine_doj/>


The Department of Justice (US) defines Price Fixing as:

"Price fixing is an agreement among competitors to raise, fix or otherwise maintain the price at which their goods or services are sold.

It is not necessary that competitors agree to charge exactly the same price, or that every competitor in a given industry join the conspiracy. Price fixing can take many forms, and any agreement that restricts price competition violates the law." (www.usdoj.gov)

The virtual assisting industry is still relatively new. It would be very easy for someone to suspect price fixing should we discuss prices in the association discussion groups. Remember, we need to keep our industry above board, and on the cutting edge. We don't need to lose the reputation we've earned by inadvertently giving the impression of price fixing. Perception is everything. Our overall priority is to ensure that the public knows that virtual assistants can be trusted. This is why it is always a good practice to not discuss prices in groups.

Kathy Ritchie, MVA, is the Owner of Ritchie Secretarial Service (www.thebestva.com), a successful virtual assistant practice in Aurora, Colorado since 1996, and the Editor of the RSS Herald (www.rssherald.com), the leading newsletter of the virtual assistant industry.