price-fixing
PRYS-fik-sing
/ˈpraɪsˌfɪk.sɪŋ/
An agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price.
This is a violation of antitrust laws because it eliminates competition and harms consumers.
The story behind the word. A 20th-century economic term that arose with the development of antitrust laws. It describes the 'fixing' or stabilizing of prices that should naturally fluctuate in a free market.
Word relationships
- collusion: Collusion is the general act of secret cooperation; price-fixing is the specific result of that cooperation regarding costs.
- price war: A period of intense competition in which each competitor tries to cut prices below those of the others.
Commonly confused with
- monopoly: A monopoly is one company controlling a market; price-fixing is multiple companies acting like a monopoly.
Word family
- price-fix (verb): To agree with competitors to set a specific price.
Collocations
- illegal price-fixing
- price-fixing conspiracy
- accused of price-fixing
Example sentences
- "Price-fixing is an agreement between participants on the same side of a market to buy or sell a product only at a fixed price." A regulatory agency statement. (Federal Trade Commission)
- "The airlines were accused of price-fixing after they all raised their fuel surcharges by the exact same amount on the same day." A news report on the airline industry.
Memory hook
Price-Fixing: The price is 'fixed' (stuck) so it can't go down, even if it should. The price is fixed in place.
When not to use
Do not use when a single company sets its own prices; it requires an agreement between multiple competitors.
Fun facts
- One of the most famous price-fixing cases involved global vitamin manufacturers who colluded for nearly a decade.
Related words
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