Collusion is an agreement between two or more parties to limit open competition by deceiving, misleading, or defrauding others of their legal rights, or to obtain an objective forbidden by law typically by defrauding or gaining an unfair market advantage. It is an agreement among firms or individuals to divide a market, set prices, limit production or limit opportunities. It can involve wage fixing, kickbacks, or misrepresenting the independence of the relationship between the colluding parties. In legal terms, all acts effected by collusion are considered void.
History of Collusion
The concept of collusion has been around since the late 19th century, when it was used to describe agreements between businesses to limit competition. In the early 20th century, the term was used to describe agreements between labor unions and employers to fix wages and working conditions. In the United States, the Sherman Antitrust Act of 1890 was the first law to prohibit collusion. Since then, many countries have passed laws to prevent collusion and other anti-competitive practices.
In recent years, the term has been used to describe agreements between companies to fix prices, limit production, or divide markets. This type of collusion is illegal in many countries, and can result in significant fines and other penalties. In the United States, the Department of Justice has taken a particularly aggressive stance against companies that engage in price-fixing and other forms of collusion.
|Type of Collusion||Penalties|
|Price-fixing||Fines, jail time, and other penalties|
|Market division||Fines, jail time, and other penalties|
|Kickbacks||Fines, jail time, and other penalties|
Collusion is an agreement between two or more parties to limit open competition by deceiving, misleading, or defrauding others of their legal rights, or to obtain an objective forbidden by law. It is illegal in many countries, and can result in significant fines and other penalties. For more information, you can visit the websites of the Department of Justice, the Federal Trade Commission, and the European Commission.
- Market division
- Restraint of trade
- Price discrimination
- Predatory pricing