Answer:
Price fixing and bid rigging are among the most common antitrust violations and are the most likely to be prosecuted. Price fixing and bid rigging, along with customer or territorial allocation among competitors, are considered examples of horizontal agreements among competitors.
Price fixing generally involves any agreement among competitors to tamper with prices or with the terms or conditions of sale (i.e. interest rates for consumer credit) for goods or services. In practice, this generally involves an agreement among competitors providing a particular product or service within a defined geographic area to raise, set or maintain the prices of their goods or services.
Bid rigging occurs when coordination among bidders competing for a business contract undermines the bidding process. Bid rigging can take many forms, but one frequent form is when competitors agree in advance which firm will win the bid. For instance, competitors may:
Agree to take turns being the low bidder.
Sit out of a bidding round.
Propose unacceptable bids to cover up a bid-rigging scheme.
Other bid-rigging agreements involve forming a joint venture to submit a single bid or subcontracting part of the main contract to the losing bidders. Because price fixing and bid rigging violations are so likely to be prosecuted, it is essential that banks provide all their employees with specific, relevant training to help them recognize signs of potential violations.
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