Global Price Agreement

In October 2005, Korean company Samsung pleaded guilty to conspiring with other companies, including Infineon and Hynix Semiconductor, to price Dynamic Random Access Memory (DRAM) chips. Samsung was the third company charged under the international deal and was fined $300 million, the second-largest fine in U.S. history. It is more common to have price cartel trends during the tendering process, such as: in Canada, it is a criminal offence under section 45 of the Competition Act. Bid Rigging is considered a form of price agreement and is illegal in both the United States (see 1 Sherman Act) and Canada (see 47 Competition Act). In the United States, agreements to consolidate, increase, reduce, stabilize or price are in themselves illegal. [12] It does not matter whether the agreed price is reasonable or for a valid or altruistic reason, or whether the agreement is tacit and implied. In the United States, pricing also includes agreements to keep prices equal, discount prices (even if based on financial need or income), establish credit terms, agree on a price plan or scale, adopt a common pricing formula, to prohibit the advertising of prices or to respect the prices advertised. [13] As a general rule, international treaties are drafted in a formal and legally concise manner. Most companies draw up written contracts in order to thoroughly clarify the terms of an agreement and seek legal assistance in defining the terms of essential contracts and clauses. With increasing globalization, customers will increase the pressure on suppliers to accept global pricing contracts (GPC). Buyers can promise international markets, guaranteed production volumes, and improved scale and scale benefits. But what if they do not provide or if the overall transparency of suppliers` prices prompts them to make unrealistic demands?2 If the offer or the price based on the offer is much higher than expected, the reason may be collussive to set the price or simply too expensive, but it is legal in itself.

Economic liberals believe that price agreement is a voluntary and consensual activity between the parties, which should be free from state coercion and state interference. Sometimes price fixing ensures a stable market for both consumers and producers. Any short-term benefit of increased price competition will drive some producers out of the market and lead to product shortages and prices for consumers….