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Why Price Fixing Should Remain Unlawful

In: Business and Management

Submitted By marnbert
Words 1131
Pages 5
In today’s economy it is generally said that supply and demand determine prices on goods and services. In order for this to be true the free market cannot be interfered with. The New York Times article, “Taiwan Company Fined $500 Million for Price-Fixing,” highlights some of the issues that can arise when it comes to price fixing. In this essay I will explain what the antitrust law says regarding price-fixing agreements, and what impact these regulations have on businesses. I will give my opinion on the law, discuss the arguments for and against it, and explain why I believe unlawful price fixing has to remain illegal. I argue that without a law against price fixing the free market will not be protected, having negative consequences on our society.
Many of the world’s largest LCD screen manufacturers, including Taiwanese company AU Optronics, were charged for violating the antitrust law regarding unlawful price fixing. AU Optronics was fined $500 million and its former president and executive vice president were sentenced to three years each in prison. Judge Susan Illston said that the three-year sentences were enough since “they acted not for personal gain but out of their belief that they were aiding a troubled industry plagued by overproduction and plummeting prices.” Au Optronics had together with seven other competitors been convicted of sending company executives to quarterly meetings from 2001 to 2006 to determine prices and production levels for their LCD screens. Documentation from these meetings was presented to the jury as evidence. Prosecutors claimed that the cost of LCD products had been artificially inflated, increasing cost for consumers around the world. American consumers took the worst hit as American companies accounted for one third of total LCD screen sales. AU Optronics played a vital role in what had a large impact on American consumers’…...

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