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Office of Fair Trading (OFT) closed Competition Act 1998 case.

Case reference: CE/7510-06

Summary of work

The OFT has completed its investigation into collective boycott and alleged price fixing by certain recruitment agencies in breach of the Chapter I prohibition of the Competition Act 1998.

On 30 September 2009 the OFT announced its final decision imposing fines totalling £39.27 million on six recruitment agencies for price-fixing and the collective boycott of another company in the supply of candidates to the construction industry. On 13 November 2009 the OFT published the non-confidential version of this Decision.

Three out of six recruitment agencies appealed the decision to the Competition Appeal Tribunal (CAT). These appeals concerned the level of the penalty imposed by the OFT. The CAT handed down its judgment on 1 April 2011.

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Construction Recruitment Forum: collective boycott and price-fixing

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Office of Fair Trading (OFT) closed Competition Act 1998 case. Case reference: CE/7510-06 The OFT has completed its investigation into collective boycott and alleged price fixing by certain recruitment agencies in breach of the Chapter I prohibition of the Competition Act 1998.

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The Competition and Markets Authority ( CMA) has found that the agencies - FM Models, Models 1, Premier, Storm and Viva - and their trade association, the Association of Model Agents ( AMA), colluded instead of competing on prices for modelling services. This took place from at least April 2013 until March 2015.

The parties regularly and systematically exchanged information and discussed prices in the context of negotiations with particular customers. In some cases, the agencies agreed to fix minimum prices or agreed a common approach to pricing.

In addition, the AMA and the agencies sought to influence other AMA members by regularly issuing email circulars, known as ' AMA Alerts', urging AMA members to resist the prices offered by customers on the grounds they were too low.

The CMA 's investigation concerned a wide range of modelling assignments - from fashion magazine shoots offering model fees of a few hundred pounds to advertising campaigns offering over £10,000. The conduct did not, however, extend to the services of so-called 'top models'.

The conduct occurred in the context of negotiations with a range of customers, including well-known high-street chains, online fashion retailers and consumer goods brands.

John Wotton, Chair of the Case Decision Group responsible for making the decision, said:

Strong competition benefits consumers, the economy and society. When businesses collude rather than compete the ultimate losers are customers.

In this case the agencies and the AMA colluded with each other over their approach to pricing and, in some instances, the agencies agreed to fix minimum prices. This type of behaviour harms the economy and deprives businesses and consumers of the benefits of competition.

It is the CMA 's responsibility to ensure that markets are competitive, and to take action when businesses fail to comply with competition law. This applies to all businesses and all industries.

Notes for editors

1. The CMA is the UK's primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. For more information see the CMA's homepage. For CMA updates, follow us on Twitter @CMAgovuk, Flickr, LinkedIn and Facebook.

2. The Competition Act 1998 prohibits agreements, practices and conduct that may have a damaging effect on competition in the UK. The Chapter I prohibition covers anti-competitive agreements and concerted practices between businesses which have as their object or effect the prevention, restriction or distortion of competition within the UK. Article 101 of the Treaty on the Functioning of the European Union ( TFEU) covers equivalent agreements or practices which may affect trade between EU member states. Any business found to have infringed the prohibitions in the Competition Act 1998 or Article 101 TFEU can be fined up to 10% of its annual worldwide group turnover.

3. The addressees of the CMA 's infringement decision and the fines imposed are:

FM Model Agency Limited ('FM Models')

£251,000

Models One Limited, One Worldwide Limited and Models 1 New Co Limited (together 'Models 1')

£394,000

Premier Model Management Limited ('Premier')

£150,000

Storm Model Management Limited and Storm Models Limited (together 'Storm')

£491,000

Viva Model Management London Limited and Viva Model Management Sarl (together 'Viva')

£245,000

The Association of Model Agents Limited (' AMA ')

£2,500

4. The CMA's investigation was opened on 24 March 2015. A statement of objections was issued on 25 May 2016, and draft penalty statements were issued on 27 September 2016. More information about the case can be found on the case page.

5. During the period of the infringement, the AMA's business was managed by a Council composed of representatives of FM Models, Models 1, Premier, Storm and Viva. At the start of the CMA's investigation, the AMA had 17 members, including many of the larger UK model agencies.

6. Top models are those individuals whose fame plays a part in the customer's decision to contract for their services and who, as a consequence of this, usually pay significantly lower commission to the model agency and earn higher fees than other models.

7. The French and the Italian national competition authorities have recently announced penalties following investigations into the modelling services sector. The CMA has liaised with both authorities throughout its investigation. The CMA 's case concerns separate conduct, however, carried out by model agencies active in the UK and by the UK trade association.

8. Case Decision Groups ( CDGs) are used by the CMA in Competition Act cases and are separate from the case team responsible for investigating the case and issuing a statement of objections. The role of the CDG is to decide whether, based on the facts and evidence before them, including the parties' representations, the legal test for establishing an infringement has been met, and on the appropriate amount of any penalty. CDGs can include CMA panel members and will usually be chaired by a CMA inquiry chair.

9. The non-confidential version of today's infringement decision, including the basis for the calculation of the fine, will be published on the case page in due course following the redaction of commercially sensitive information.

10. Any individual or business affected by the anti-competitive behaviour in this case can rely on the CMA 's infringement decision if making a claim in the courts for damages against the companies concerned. It will be for the court to determine the level of any damages.

11. Anyone who has information about a cartel is encouraged to call the CMA cartels hotline on 020 3738 6888 or email cartelshotline@cma.gsi.gov.uk.

12. Under the CMA's leniency policy, a business that has been involved in a cartel may be granted immunity from penalties or a significant reduction in penalty in return for reporting cartel activity and assisting the CMA with its investigation. Individuals involved in cartel activity may also be granted immunity from criminal prosecution for the cartel offence under the Enterprise Act 2002. The CMA also operates a rewards policy under which it may pay a financial reward of up to £100,000 in return for information which helps it to identify and take action against illegal cartels. For more information on the CMA's leniency and informant reward policies, go to leniency and rewards.

13. The CMA has produced guidance to help businesses understand more about competition law, including what businesses can do to make sure they comply. There is also specific guidance to help small businesses.

14. Media enquiries should be directed to Simon Belgard ( simon.belgard@cma.gsi.gov.uk), 020 3738 6472).

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Model agencies fined £1.5 million for price collusion

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The Competition and Markets Authority ( CMA) has found that the agencies - FM Models, Models 1, Premier, Storm and Viva - and their trade association, the Association of Model Agents ( AMA), colluded instead of competing on prices for modelling services. This took place from at least April 2013 until March 2015.

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Supermarkets Sainsbury's and Asda are among companies that have agreed to pay the Treasury near-record fines of more than £116m after admitting that they fixed the price of milk, cheese and butter in a scandal estimated to have cost consumers about £270m.

They negotiated a reduction after reaching an "early resolution' with the Office of Fair Trading, as part of its investigation into price fixing in 2002 and 2003.

The UK's biggest supermarket, Tesco, Morrisons and the dairy group Lactalis McLelland are also alleged to have broken the law by fixing the price of dairy products, but do not accept liability. They will make representations to the OFT before it makes a final decision next year, when the fines will become payable.

The Forum of Private Business said the reduced fines were inadequate. "The fines are dwarfed by the huge profits," said FPB's policy representative, Matthew Goodman. "An opportunity has been missed to make them stop and think about the way they do business. It proves they do not have their customers' interests at heart, despite claims to the contrary."

The supermarkets and several dairy companies fell foul of the Competition Act 1998, which prevents businesses from colluding in a way that harms competition in the UK. The OFT reported that customers were being charged 15p extra for a quarter-pound of butter, the same for a half-pound of cheese and 3p extra for a pint of milk.

All the supermarkets and dairies which admitted liability said their actions were designed to help British farmers, who were reeling from the effects of the outbreak of foot and mouth disease. The OFT has ruled that smaller producers did not benefit.

Sonya Branch, the OFT's senior director in charge of the case, said the fine was the second highest demanded by the OFT - exceeded only by the £121.5m payout ordered from British Airways over price fixing of fuel surcharges. She said: "£116m is not a small fine. This shows that where we see evidence of signs of collusion, we will come down very hard. This early resolution is good value for taxpayers."

Sainsbury's said it had agreed to pay £26m, but denied it was seeking to rip off consumers. This was a reduction on the planned fine of £40m. Sainsbury's chief executive, Justin King, said: "We are disappointed that we have been penalised for actions that were intended to help British dairy farmers, but recognise the benefit of a speedy settlement with the OFT."

Asda has not revealed the amount of its settlement but said its intentions were to give "more money for dairy farmers, who were under severe financial pressure".

Safeway, before its takeover by Morrisons, and dairies Robert Wiseman, Dairy Crest and The Cheese Company also admitted colluding over dairy prices. Dairy Crest is expected to pay a fine of £9.4m and Robert Wiseman agreed to pay £6.1m.

Tesco said in a statement: "We acted independently and we did not collude with anyone. Our position is different from our competitors and we are defending our own case vigorously."

Consumer organisation Which? said: "While we are pleased that the firms involved have admitted price fixing and been fined, the fines won't repay the consumers who have paid over the odds for basic provisions."

Carl Belgrove, the National Consumer Council's competition expert, said: "These supermarkets have been creaming off money from their customers in breach of competition laws. Without the OFT's investigation this shameful episode would not have come to light."

Backstory

Supermarkets are often accused by smaller retailers of squeezing them out of business. Last month, unveiling provisional findings of a 17-month inquiry into the £123bn grocery market, the Competition Commission ruled that big supermarkets were not competing effectively in many parts of the country. Tesco, the UK's biggest supermarket, was cleared by the watchdog of forcing its smaller rivals out of business, but evidence was uncovered of the large grocers making unfair demands of their suppliers. But the "big four" supermarkets and several dairies have been under investigation since September, accused of giving customers a raw deal on dairy products. The companies which yesterday admitted their role in the affair said they were trying to help dairy farmers at a time when they were under strain following the foot and mouth outbreak in 2001.
Topics

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Supermarkets fined £116m for price fixing

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Supermarkets Sainsbury's and Asda are among companies that have agreed to pay the Treasury near-record fines of more than £116m after admitting that they fixed the price of milk, cheese and butter in a scandal estimated to have cost consumers about £270m.

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Apple accused by US of colluding with publishers to fix price of ebooks

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Lawsuit filed by US department of justice claims Apple ended price competition after seeing success of Amazon's $10 ebooks

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THREE words should take us out of the middle-income trap: Be More Competitive.

But that's going to be tough despite the economic transformation already in train, because price fixing, market rigging and collusion are so common place. With the coming into effect of the Competition Act (since June 10, 2010 and enforced on Jan 1, 2012), anti-competitive practices are now illegal!

The Act is intended to promote and safeguard "the process of competition, thereby protecting consumers." It states that because competition "encourages efficiency, innovation and entrepreneurship," it will reward consumers with (i) competitive (lower) prices, (ii) improved quality of products and services, and (iii) wider choices. That's why the Act serves "to prohibit anti-competitive conduct."

To oversee the effective implementation and enforcement of the Act, the Malaysia Competitive Commission (MyCC) was established. MyCC is charged to investigate any anti-competitive practices and is also empowered to impose strong financial penalties. The Act applies to all commercial activities in Malaysia and abroad which affect competition in the Malaysian market place.

However, decisions by MyCC may be appealed to the Competition Appeal Tribunal, on which I have been appointed as a member. In addition, MyCC also (a) advises government and public regulatory authorities on all aspects of competition, (b) advises the government on the impact of laws governing competition, (c) undertakes studies and market reviews, and (d) issue guidelines governing the conduct of competition.

Competition Act (Act 712)

Act 712 (or CA) provides a framework for identifying and dealing with anti-competitive practices by all enterprises ranging from multinationals to other large as well as small and medium-scale enterprises. Activities in communications, and multimedia and energy are exempted as these are regulated by their respective governing laws. In essence, CA can be expected to promote competitive markets by levelling the playing field for all. Its focus is to safeguard the market against all anti-competitive and unfair practices (including cartel-like and restrictive initiatives).

In so doing, benefits will accrue to consumers through (i) lower entry barriers into the market place, (ii) encouraging competitive forces to drive enterprises to become more efficient, (iii) promoting innovation and investment in R&D to create new products and processes, (iv) enlarging domestic markets, and (v) promoting efficient allocation and utilisation of scarce resources.

Anti-competitive practices are centred on two main prohibitions:

Anti-competitive agreements (ACAs): Act 712 prohibits ACAs whether horizontal (i.e. among enterprises operating at the same level of the production or distribution chain) or vertical (i.e. among enterprises operating at different levels of the production or distribution chain) with the object or effect to significantly prevent, restrict or distort competition in Malaysia. Agreements mean any arrangement or understanding among enterprises, including decisions by any association and concerted practices. Enterprises refer to any entity carrying on commercial activities to provide goods or services. Prohibitions include price fixing (agreements to fix, control or maintain prices of goods and services), market allocation (enterprises agreeing to divide customer markets geographically or by customer-type or to sell only to allotted customers), bid-rigging (agreements on who should win a tender) and limiting production (enterprises maximising profits by limiting or controlling supply).

Abuse of dominant position (ADP): Act 712 prohibits any ADP by enterprises occupying a dominant position in the market (i.e. dominant in their ability to adjust prices or dictate trading terms without effective constraint from competing enterprises or consumers). They include price discrimination (practice of selling same products to different customers at different prices simply by exercising market power), excessive pricing (enterprises using market power to dictate prices beyond the effective competitive level), and predatory pricing (enterprises exercising market power to drive down selling prices of their products or services with the aim of driving competitors off the market or creating barriers to entry of new competitors).

Act 712 provides for certain activities to be excluded from these prohibitions, including (i) exercise of government authority, (ii) agreements and conduct to comply with legal requirements, (iii) collective bargaining activities and collective agreements, (iv) purchase of goods and services not for economic activity, and (v) services of general economic interest.

However, the Act allows for relief of this liability for engaging in listed prohibitions, provided all 4 reasons are met simultaneously: (a) there are direct significant identifiable technological, efficiency or social benefits, (b) the benefits could not reasonably be provided without such restrictions, (c) detrimental effects of such anti-competitive agreements are proportionate to the benefits, and (d) such restrictive practices do not lead to the complete elimination of competition. These, I dare say are rather onerous conditions. But, it is worthwhile noting that in the European Union (EU), an additional criterion must be met to qualify for exemption, i.e. benefits resulting from any agreements must be passed on to the consumer. This seems fair. Nevertheless, each enterprise or block of agreements may apply for exemption. I am told MyCC has not granted any exemption so far. Furthermore, to assist consumers to better understand the process of competition, MyCC is empowered to conduct market reviews to determine whether any feature or combination of features in the market-place prevent, restrict or distort competition. All reviews would be made public. In the end, the intention is to promote a more competitive and efficient market-place to maximise consumer welfare, resulting in lower prices, more choices, better quality of goods and services, and a higher standard of consumer services.

Current situation

Act 712 comes on the heels of similar laws, put into place in Singapore, Indonesia, Thailand, Vietnam and Hong Kong. It is still common practice in Malaysia for trade associations and guilds and professional regulatory bodies to indulge in a wide range of anti-competition practices, including open price-fixing, market sharing, supply limitations, bid-rigging and scale-fees setting as well as the sharing of price and supply of sensitive information.

These represent "hard-core" cartel offences under the Act. For a long time, the association of banks and insurance companies, for example, fix prices, as do product-based associations on the sale of cars, flowers, food and beverages, steel, etc, while professional guilds set scale fees for their membership to comply. Also, producers and distributors gather to share commercially sensitive information. These must remain of grave concern to MyCC who worry about open offences breaching the CA.

Entrenched in Malaysian business is a culture of collusion to fix things in the name of advancing the common good, including arrangements having the effect of preventing, restricting and distorting competition. This has gone on for so long that it has become something like a second nature in business discourse. Thus, change won't come easy.

However, rigorous enforcement of competition laws can help bring about badly needed change. Already, MAS Cargo was reported to have been penalised to pay A$6mil (plus legal costs) by the Australian Federal Court for price fixing as part of a cartel. As I understand it, other airlines including Singapore Airlines, Cathay Pacific, Air New Zealand and Thai International are also being pursued for a similar offence. Cartel conduct is both a civil and criminal offence in Australia; it is particularly damaging because it usually inflates prices for consumers. MyCC needs to act boldly. It has to begin building a body of traditions of robust adherence to the law, enforcing it without fear or favour to protect the greater good of consumer interests; of absolute integrity and technical competence; of dependable expertise that readily accepts absolutely the dictates of the national interest.

CA has yet to be really tested. Like most global competition laws, the Act contains presumptions and deeming provisions. In Malaysia, prohibitions can arise either because a restrictive agreement has the "object" or "effect" of preventing, restricting or distorting competition, similar to competition legislation around the world.

What's unclear at this time, according to Prof R. Whish (King's College, London) is whether such prohibitions will be interpreted in the same way as in EU and UK, viz. where agreement restrictions "by object" are presumed per se to have anti-competitive effects without a need to go through the process to demonstrate such impact, thereby injecting legal certainty and conserving the use of resources at MyCC. Clarity on other issues is also important, including the standard of proof required; use of effects analysis and how to prove effects; quality of empirical analysis and economic evidence, adoption of time tested "best practices;" and jurisdiction over the impact of mergers and takeovers on competition even though "the government is of the view that for the time being, the Act should not regulate M&As."

Dawn raids

Like its European counterparts, Act 712 provides MyCC with the authority to conduct surprise on-site inspections, commonly known as dawn raids. This serves as an important avenue for MyCC to gather (check-on and co-ordinate) information particularly early-on in a cartel investigation. Such a move includes wide ranging powers, and combined with a court warrant, have proved invaluable to investigations especially in cases focused heavily on compiling deep documentary (including corporate records) evidence.

The rigour of enforcement is often enhanced by suitably-timed dawn raids. This has proved to be an indispensible tool for national competition authorities to investigate "hard-core" infringements of competition rules and their presumed negative market effects. In practice, based on European experience, any secret agreement or understanding among competing enterprises that seek to fix prices, limit output, share markets, customers and sources of supply i.e. involving cartel behaviour, will inevitably attract intense regulatory scrutiny sooner or later. Such hard-core "price-fixing" must inevitably attract dawn raids.

What then, are we to do?

Competition remains at the heart of economic policy. CA relates to only behavioural prohibitions, not structural ones. Indeed, the Act says little about the structure of markets and the structure of pricing or the profit margins derived.

As an example, it has been reported that the Honda Insight which retails for less than US$20,000 in the United States, is priced much higher in Malaysia at around RM100,000 (even without excise or import duty). So, we are still far from fair and competitive pricing. Besides, philosophy also matters. In markets where the invisible hand (forces) of supply and demand are allowed free play a lá Adam Smith or Hayek tradition, competitive pricing inevitably reflects the maximisation of profits, not necessarily the maximisation of consumer benefits.

But in a truly utilitarian regime or under egalitarian Communism, the greatest good of the greatest number prevails in assessing real social benefits. In the end, the outcome is to be reflected in lower prices, better products and wider choices for consumers. The final test of competition must rest on consumer benefits, even though it can harm inefficient enterprises in the process but that's creative destruction. Like UK and Hong Kong, MyCC smartly adopted a phased-in approach to implement CA. Relevant implementing guidelines have already been issued and more are expected. But it must avoid over-regulation at all cost. Realistically, I don't see rigorous enforcement of the prohibitions in the Act in practice any time soon. This remains MyCC's major challenge.

Ultimately, Malaysia badly needs to Be More Competitive to get out of the middle-income trap. The sooner the better. No two ways about it.

· Former banker, Tan Sri Lin See-Yan is a Harvard educated economist and a British chartered scientist who speaks, writes and consults on economic & financial issues. Feedback is most welcome; email: starbiz@thestar.com.my.

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Price fixing, market sharing and collusion are illegal - Business News | The Star Online

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THREE words should take us out of the middle-income trap: Be More Competitive. But that's going to be tough despite the economic transformation already in train, because price fixing, market rigging and collusion are so common place. With the coming into effect of the Competition Act (since June 10, 2010 and enforced on Jan 1, 2012), anti-competitive practices are now illegal!

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Everything Is Rigged: The Biggest Price-Fixing Scandal Ever

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The Illuminati were amateurs. The second huge financial scandal of the year reveals the real international conspiracy: There's no price the big banks

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German cars (bmw forever)

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Sometimes big things are hidden behind much smaller things. For instance, one of the biggest secrets of the German automotive industry lies behind the mechanism that opens and closes a convertible top at the push of a button.

Daimler, BMW, Audi, Porsche and Volkswagen are engaged in cutthroat competition to produce the best cars. At least that's the story often told by auto company CEOs, economists and politicians. It's a narrative about the beneficial effect of the market economy, which is based on competition among companies. But the narrative is wrong, and this is reflected in the convertible top.

Daimler, BMW, Audi, Porsche and Volkswagen did not in fact compete over which company could offer its customers the best top. On the contrary, experts with the five automakers coordinated their actions in numerous meetings. For instance, they determined the maximum speed at which a driver could open or close the top.

"No arms race when it comes to speeds," read the minutes of a meeting in Bad Kissingen. Arguments against an arms race, according to the minutes, were "costs, weight, increasing technological risk and crash relevance." The result of that meeting is that the soft tops on the convertibles sold by Daimler, BMW, Audi, Porsche and Volkswagen can only be opened and closed at speeds of up to 50 kilometers per hour.

It was an agreement that suspended both competition and the market economy. It was reached by the "working group for mechanical attachments." There were many, many other working groups involving the five German automakers, including working groups for braking control systems, seating systems, air suspensions, clutches, gasoline engines and diesel engines. The major issues were discussed and arranged in these groups.

Reporting by DER SPIEGEL into the anti-cartel authorities in Brussels and Bonn, and automakers in Stuttgart, Munich and Wolfsburg, and conversations with current and former executives, provide a previously unknown image of Germany's most important industry. The conclusion is that Daimler, BMW, Audi, Porsche and Volkswagen often no longer compete with one another. Instead, they secretly cooperate, very closely, in fact, in the same way one would normally expect of the subsidiaries of a single company to work together, as something like a "German Cars Inc." -- or a cartel.

Daimler, Volkswagen, Audi and Porsche have already admitted as much to the European Commission and the German Federal Cartel Office. In a brief dated July 4, 2016, Volkswagen issued what amounts to a voluntary declaration of its "participation in suspected cartel infringements." According to the VW statement, Daimler, BMW, Volkswagen, Audi and Porsche have coordinated matters relating to the development of their vehicles, costs, suppliers and markets "for many years -- at least since the 1990s and to this day."

It is not just a matter of the establishment of an exclusive club of the five German automakers with the goal of attaining economic advantages over the competition. The secret agreements are also detrimental to customers, who buy German vehicles because, among other things, they expect to be getting the best possible products from a technical standpoint. But how can a company produce the best if competition is curbed, and if the engineers stop doing their utmost to outdo the engineers working for other brands?

And then there are the millions of owners of diesel cars. In an almost bizarre way, they too are victims of the German auto cartel. For the first time, there is proof that it was agreements among these five automakers that ultimately ensured that emissions from diesel vehicles were not cleaned as effectively as would have been technically possible. This all began with the cartel of the five automakers.

Diesel buyers are now left with the damage. They face the prospect of no longer being allowed to drive their cars in cities, and of suffering significant losses when selling the vehicles. Shareholders are also among the victims. Penalties for cartel violations weaken the companies in which they hold shares and can lead to declining share prices. Suppliers are also adversely affected, as is almost always the case with cartel agreements. If the five German automakers agree to buy from only one company, others stand no chance of securing orders.

The agreements among the German automakers likely constitute one of the biggest cartel cases in German industrial history. They began in the 1990s and were expanded to include more and more issues, probably in part because industry executives long viewed violations of competition law as harmless rule violations, on a par with parking tickets.

It is only in recent years that the European Commission has begun imposing drastic penalties on companies that secretly collude on pricing or the technology they use. In 2012, manufacturers of cathode ray tubes were ordered to pay 1.5 billion euros in fines. In 2016, a 2.9-billion-euro penalty was imposed on commercial truck manufacturers.

The cartel of German automakers could also face fines in the billions. And the industry's image, which has already suffered considerably from the diesel scandal, will be damaged even further.

The exposure of the club of five strikes the companies at a time when they need all of their strength and financial assets for other things: the transition to electric cars and their transformation into mobility service providers. It is also a time when they are being challenged by new competitors from Silicon Valley and China.

But now VW, Audi, Porsche, Daimler and BMW must first address a problem in their most recent past. It is a painstaking process, because the agreements extend across such a long time period and so many managers were involved.

The development experts at the German auto companies met "regularly several times a year." They met in Stuttgart, Munich, Ingolstadt and Wolfsburg, and at the major auto shows in Geneva, Frankfurt and Paris. There is "the suspicion," as Volkswagen stated in its brief, also speaking on behalf of subsidiaries Audi and Porsche, that there was "behavior in violation of cartel law."

When a car company itself voices the "suspicion" that it may have violated laws, the evidence must be very clear. And it is.

Sometimes the cooperation among Daimler, BMW, Audi, Porsche and Volkswagen worked more effectively than cooperation among various departments within a company. The automakers' experts were assigned to working groups and sub-working groups, classified according to the following development areas: "engine," "car body," "chassis," "electric/electronic" and "total vehicle." Because five brands were involved, the groups were known internally as the "groups of five."

The VW Group's self-incrimination offers a new look at the diesel scandal and its evolution. It also provides a surprising answer to the question of why the German auto industry was only able to comply with emission limits for diesel cars with tricks and deception, and why VW, Audi and Porsche even used fraud as a tool: The manufacturers were not competing to achieve a Vorsprung durch Technik, or "technical edge," as Audi likes to tout in its British and German advertising, by effectively cleaning exhaust gases. On the contrary, they largely removed competition from this area.

At numerous meetings, they coordinated the size of tanks for AdBlue, a urea mixture used to split nitric oxide into its harmless components of water and nitrogen. Large tanks would have been expensive, so Daimler, BMW, Audi and Volkswagen agreed to use small tanks. However, at some point the amount of AdBlue the tanks contained was no longer sufficient to adequately clean exhaust gases.

The European Commission is currently examining the auto cartel case. It has seized records from the participating companies and has begun questioning witnesses. Last Wednesday, DER SPIEGEL extensively questioned the participating companies about the cartel accusations.

BMW stated: "Please understand that we cannot process your extensive list of questions. We do not participate in such speculations."

Daimler responded: "Please understand that, as a rule, we do not comment on speculations."

Volkswagen wrote: "We have no comment on the speculations and presumed circumstances that you have mentioned."

The cartel authorities face a Sisyphean task in their investigation of the auto cartel. There were more than 60 working groups in which the automakers cooperated. "We assume," Volkswagen wrote in its statement to the authorities, "that more than 1,000 relevant meetings took place in the last five years."

More than 60 working groups and more than 1,000 meetings.

At this point, it makes sense to pause for a moment and ask: Excuse us? What exactly was going on in an industry that, for decades, was considered a symbol of the strength of German industry? Weren't the heads of these auto companies constantly pointing out how fantastic the competition was, especially among the German automakers?

Commenting on the fact that Audi, BMW and Mercedes together hold about 80 percent of the global market share in the premium segment, Daimler CEO Dieter Zetsche said that one of the reasons was that "as neighbors, we are constantly stepping on each other's toes. In this sense, competition is an incredibly good thing." BMW CEO Harald Krüger said: "This competition constantly motivates us to achieve excellence." VW CEO Matthias Müller praised the competition among brands. And Audi CEO Rupert Stadler said that competition had "given us all a technological advantage."

Was it all just for show?

Of course there is still competition among German carmakers. Each of them strives to ensure that its latest model has either the most comfortable or the sportiest chassis. Each of them aims to design an especially safe vehicle that performs well in crash tests. And each company wants to be at the forefront when it comes to offering the first fully self-driving car.

There are cases in which the German carmakers do officially work together. For instance, Mercedes-Benz and BMW cooperate in buying certain auto parts. This is allowed if the parts are not relevant to competition, that is, if they do not constitute a distinguishing feature between a BMW and a Mercedes -- windshield wiper blades, for example.

But beyond this known cooperation, apparently the companies, in their groups of five, secretly shut out the competition in many areas of vehicle development for years, thereby violating the basic principle of the market economy.

This has already come back to haunt them, and in dramatic fashion. The diesel scandal would not have taken shape as it did, and perhaps not even at all, without the agreements among German automakers. It is not the work of a few criminal managers in the Volkswagen Group, but ultimately the result of secret agreements within the entire German automobile industry. DER SPIEGEL has already reported on the initial signs of collusion.

The companies have been coordinating their efforts in numerous meetings and conference calls since 2006. There were agendas and minutes of these meetings. And sometimes the participants even joked about the aspect of confidentiality. One Audi email, for example, reads: "Hello everyone, here is the information on the 'secret' meeting in Munich."

The starting point was the debate over the increase in the greenhouse gas CO2 and the resulting global warming. Calls for limits on CO2 emissions became more and more vocal worldwide. After heavy industry and energy producers, the automobile industry also came under fire.

A Japanese carmaker had a response to the criticism. Toyota was already selling vehicles with hybrid drives, in which a classic combustion engine is supported by an electric motor. Fuel consumption and, as a result, CO2 emissions declined considerably. It was considered a pioneering technology. The European Commission, under then President José Manuel Barroso, even discussed imposing a mandatory quota for hybrid drives.

The German automobile industry had nothing comparable to offer in this area. Instead, it chose to back the more than 100-year-old diesel technology. Diesel engines, which emit less CO2 than gasoline engines, were to become their answer to climate change.

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The Cartel: Collusion Between Germany's Biggest Carmakers - SPIEGEL ONLINE - International

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The diesel scandal is not a failure on the part of individual companies, but rather the result of collusion among German automakers that lasted for years. Audi, BMW, Daimler, Volkswagen and Porsche coordinated their activities in more than a thousand meetings. The exposure of a cartel.

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Pubs 🖖🏼🙌✌🏻🥃🍺

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Telecommunication in USA

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The Justice Department has opened an antitrust investigation into potential coordination by AT&T, Verizon and a telecommunications standards organization to hinder consumers from easily switching wireless carriers, according to six people with knowledge of the inquiry.

In February, the Justice Department issued demands to AT&T, Verizon and the G.S.M.A., a mobile industry standards-setting group, for information on potential collusion to thwart a technology known as eSIM, said two of the people, who spoke on the condition of anonymity because the details are confidential.

The eSIM technology lets people remotely switch wireless providers without having to insert a new SIM card into a device. AT&T and Verizon face accusations that they colluded with the G.S.M.A. to try to establish standards that would allow them to lock a device to their network even if it had eSIM technology.

The investigation was opened about five months ago after at least one device maker and one wireless carrier filed formal complaints with the Justice Department, two of the people said.

Representatives for the Justice Department, AT&T, Verizon and the G.S.M.A. declined to comment.

At the heart of the investigation is whether the nation's biggest wireless carriers, working with the G.S.M.A., secretly tried to influence mobile technology to unfairly maintain their dominance, in a way that hurt competition and consumers and hindered innovation in the wider mobile industry.

AT&T and Verizon together control about 70 percent of all wireless subscriptions in the United States. A technology that made it easy to switch carriers could lead to more churn and fewer subscribers for them.

The investigation highlights a push by the Justice Department's antitrust chief, Makan Delrahim, to crack down on the opaque world of intellectual property, or I.P., standards. He has said the Justice Department will scrutinize potential coordination in standards-setting organizations that can hurt competition.

"In the context of antitrust and I.P., we will be inclined to investigate and enforce when we see evidence of collusive conduct undertaken for the purpose of fixing prices, or excluding particular competitors or products," Mr. Delrahim said in a speech this month at a conference in Washington. He previously warned of the potential for "cartel-like behavior" by competitors that got together with standards-setting organizations.

Read more from The New York Times:
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AT&T deal puts Trump's antitrust cop at center of a political storm
Picking a New Phone Plan? Here Are Your Best Bets

At the same time, the Justice Department is suing AT&T to block its $85.4 billion merger with Time Warner. Mr. Delrahim has said the deal will hurt competition and lead to higher prices for cable customers. AT&T and Time Warner have strongly disputed the claims in a federal trial that is expected to end this month.

Currently, most mobile phones use SIM cards, which contain unique identifying information about a user and are inserted into the devices so the phones can function. People typically have to buy a new SIM card when changing carriers.

The eSIM technology, which was introduced in early 2016, is embedded in mobile phones and other devices so that people do not need SIM cards anymore.

The eSIM technology is supported by gadget makers including Apple, Google and Microsoft, as well as several wireless carriers globally and in the United States. The Apple Watch 3, Google Pixel 2 smartphone and Microsoft Surface all have eSIM abilities, for example. The technology would make it easier for people to use local carriers when traveling internationally and would free up storage space in devices to use for other technologies like bigger processors and batteries.

The push by the major carriers to restrict the flexibility of eSIM run counter to a movement in which consumers were gaining more flexibility to move from carrier to carrier. In late 2013, under pressure by the Federal Communications Commission, the wireless industry agreed to let people take devices off any particular network without penalty once the devices were fully paid for.

After the formal complaints against AT&T and Verizon were filed, several device makers and other wireless companies voiced similar concerns to the agency about the carriers' actions around eSIM, four people familiar with the investigation said. The investigation may also include other major American carriers, another person said.

"The actions would limit choice for consumers and harm competition," said Ferras Vinh, a policy expert at the Center for Democracy and Technology.

In a private meeting of a task force called G.S.M.A. North America this year, AT&T and Verizon pushed for the ability to lock phones to their networks, bypassing the purpose of eSIM technology, said Harold Feld, a senior vice president of Public Knowledge, a nonprofit consumer group, who was briefed on the meeting. Verizon has said it needed to be able to lock down phones to prevent theft and fraud.

"There is a constant problem with industry standards-setting organizations that on the one hand allow the industry to come together for the purpose of efficiency but can be very anticompetitive and operate in secrecy," Mr. Feld said.

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US said to investigate AT&T and Verizon over wireless collusion claim

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The Justice Department has opened an antitrust investigation into potential coordination by AT&T, Verizon and a telecommunications standards organization to hinder consumers from easily switching wireless carriers, according to six people with knowledge of the inquiry.

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Airline collusion

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Crowded planes. Pinched seating. Vanishing fare bargains. Extortionate fees. Rising fares across every major airline.

The antitrust cops at the US justice department think they know what's behind the blight of modern air travel: "Major airlines, in tandem, have raised fares, imposed new and higher fees, and reduced service."

The government also accused America's leading airline companies of a preference for "tacit coordination over full-throated competition".

Except those words did not arrive this week, when documents surfaced indicating a justice department investigation into unlawful coordination by the airlines over pricing and capacity. Those suspicions of collusion came alongside a federal lawsuit almost two years ago, before the merger of American Airlines and USAirways created the world's largest air carrier and, industry watchers said at the time, ended any hope for a competitive industry that could lower ballooning ticket costs for consumers.

Now, the surviving quartet of US airline giants - American, Delta, United and the discounter Southwest - are coming under increased scrutiny for "unlawful coordination" on price-gouging. But airline insiders and legal analysts say the government's case against the industry will be near-impossible to prove - indeed, that the feds have known about potential ticket schemes for years and have not been able to fight back against lobbyists fighting to bring the transportation business back from the post-9/11 brink.

"It's de facto collusion," said Charles Leocha, president of Travelers United, a consumer advocacy group. "Flights are full, and the airlines have become very good at signaling their strategy" to their not-so-arch rivals, he added.

While the justice department refused to elaborate on the leaked details of its investigation, the airlines did confirm that they have been asked to turn over reams of documents about their discussions on capacity, not just among themselves but with Wall Street analysts who have cheered the airlines' recent string of profits.

The antitrust division tried to block the American-USAirways deal in 2013, but allowed it to proceed in exchange for concessions such as giving up choice airport slots to competitors like JetBlue. Even with Southwest remaining a discount outlier to American, Delta and United, four major companies now control more than 80% of all air travel out of the domestic United States - and, through their global alliances, wield influence on fares and flights around the world. Fifteen years ago, 10 large airlines carried 90% of domestic traffic.

The competition cops have continued to use the airlines' own words against them: executives repeating the phrase "capacity discipline" - code for restricting the number of available seats to ticket-buyers - is what renewed attention from critics like Connecticut senator Richard Blumenthal, who compiled a damning list of utterances at a recent summit of global airline chiefs and appears to have accelerated the probe.

But watchdogs say the companies can still get their way on coordinated ticket prices without cutting a trust-busting deal, by keeping the number of seats they offer low - and keeping prices high.

"When there are a small number of competitors, it is easy for them to agree not to compete head to head," said Christopher Sagers, a professor at Cleveland-Marshall College of Law who testified at a congressional hearing on the 2013 merger.

In recent years, the average airfare has risen by more than 10%, while capacity slid by nearly 20%. But planes are more full than at any time since the beginning of the jet age, with load factor - or percentage of seats filled - currently averaging 83%, up from 71% in 2000.

But even if the airlines appear to move in lockstep on prices and capacity changes, that does not prove they are conspiring, said Helen Becker, an airline analyst at Cowen and Company.

"Because of technology, everyone has perfect knowledge," she said. "Airlines know when their competitors change prices."

Capacity changes usually follow the gross domestic product, she noted: "It's not rocket science."

The airlines, meanwhile, deny the accusations of collusion and insist they will fight any potential charges.

"We are confident that the Justice Department will find what we know to be true: our members compete vigorously every day, and the traveling public has been the beneficiary," the Airlines for America trade group said in a statement.

The lobbyists also said that capacity is at a "post-recession high", with airlines increasing the number of available seats by 4.6%, or 126,000 per day, during the summer travel period; as a result, the group claims, "fares are actually down thus far in 2015".

Industry defenders point to cumulative losses of $55bn in what they call the "lost decade" after 9/11, when the airlines lurched from crisis to crisis, including a dramatic spike in oil prices and the financial crisis of 2008.

Virtually every major US airline has been in bankruptcy at some point since the 2001 plane hijackings, only turning the corner recently with $22bn in profits over the past five years. American Airlines posted a record profit of $1.2bn in the first quarter of this year, as the last major carrier to go through the post-9/11 wash-and-rinse cycle.

Indeed, airlines have begun to add more flights, which analysts say might be what set off the eyebrow-raising chatter about restoring "discipline" after Wall Street effectively punished airlines for their largesse, pushing down stock prices.

An airline industry under the microscope is not good news for investors, with some pro-airline analysts claiming the feds simply do not understand the business.

Michael Derchin, transportation analyst at CRT Capital, said that even in good times airlines' profit margins traditionally are razor-thin and that oil prices, now relatively low, could spike at a moment's notice.

"What do you want them to do," he asked, "go out of business again?"

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Airline collusion: it's nothing new and will be difficult to prove, analysts say

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Crowded planes. Pinched seating. Vanishing fare bargains. Extortionate fees. Rising fares across every major airline. The antitrust cops at the US justice department think they know what's behind the blight of modern air travel: "Major airlines, in tandem, have raised fares, imposed new and higher fees, and reduced service."

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The Office of Fair Trading (OFT) has issued a £28.59m fine to Royal Bank of Scotland - a bank 84 per cent owned by the taxpayer - for breaking competition law.

The fine was announced yesterday after RBS admitted revealing details of its loan pricing plans for professional services firms, such as lawyers and accountants, to its rival Barclays. The OFT reduced the fine from £33.6m to reflect RBS's admission and agreement to co-operate.

The regulator said that Barclays took the information into account to determine its own pricing. However, Barclays is unlikely to face any fine for its part in the matter because it blew the whistle on the affair, contacting the OFT in March 2008.

An RBS spokeswoman said "stringent" new competition-law training had been introduced to avoid similar breaches happening again. She said: "This is a deeply regrettable and isolated case from nearly two years ago, involving only two members of staff, one of whom has left the bank and one other who faces suspension and further investigation now the case has been settled."

According to the OFT, individuals in RBS's professional practices coverage unit disclosed information about their pricing plans to counterparts at Barclays on the fringes of social, client and industry events and in telephone conversations. Barclays and RBS are the main providers of loans to large professional services firms, such as solicitors, estate agents and accountants.

Ali Nikpay, the OFT's senior director of cartels and criminal enforcement, said: "Any company that discloses confidential future pricing information to its competitors risks a substantial penalty. It is important that companies operating in the UK understand the seriousness of such conduct and ensure effective competition compliance throughout their organisation."

Mr Nikpay added: "This case underlines the OFT's commitment to protecting competition in the financial services sector. It also highlights the strong benefits of acting promptly to report anti-competitive conduct to the OFT and of co-operating with such investigations."

This fine for competition offences comes at a time when the banks already face public anger for their role in the recession, while investment bankers continue to collect bumper payouts.

Under the Competition Act 1998, the OFT has the power to impose penalties on companies of up to 10 per cent of their worldwide turnover for breaches of competition law. However, the regulator can grant immunity from penalties or a significant reduction in fines if an organisation reports breaches of the Competition Act and then assists with any investigation.

A statement from Barclays stressed it had voluntarily notified the OFT of the breach. It said: "Barclays has been co-operating throughout. The investigation operated solely within the confines of the professional services banking team in Barclays's commercial banking unit."

Caught rigging: Cartels uncovered

September 2009 The building company Kier Regional Ltd is fined £17.89m, as part of £129.5m in fines issued to 103 construction firms for price-rigging.

September 2009 The recruitment specialist Hays is fined £30.36m for price-fixing with five other firms to drive out an emerging competitor. The six were fined a total of £39.27m.

December 2007 Sainsbury's is fined £26m after it admits being part of a dairy price-fixing cartel with rivals Morrisons, Asda and other dairy firms.

August 2007 British Airways is fined £121.5m for price-fixing with Virgin Atlantic on long-haul routes.

February 2003 Argos is fined £17.28m for fixing prices of Hasbro toys and games such as Action Man with Littlewoods - which was fined £5.4m.

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The Office of Fair Trading (OFT) has issued a £28.59m fine to Royal Bank of Scotland - a bank 84 per cent owned by the taxpayer - for breaking competition law. The fine was announced yesterday after RBS admitted revealing details of its loan pricing plans for professional services firms, such as lawyers and accountants, to its rival Barclays.

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The fine was reduced from £33.6m to reflect RBS's admission and agreement to co-operate over the breaches, the OFT said in a statement.

The OFT began its probe after a tip-off from Barclays Bank that RBS had passed it confidential information about the pricing of loans.

RBS broke the rules between October 2007 and February or March 2008.

The OFT found that individuals in RBS's Professional Practices Coverage Team gave counterparts at Barclays details of the pricing of loans to large professional services firms, such as solicitors, accountancy, and property companies.

Barclays used the information to set its own prices, but escaped a fine because it reported the matter to the OFT.

Under OFT rules, Barclays' tip-off to the OFT means it will get immunity from prosecution. The OFT said that provided Barclays continues to co-operate it "is not expected to pay a fine in this case".
Substantial penalty
Ali Nikpay, OFT senior director of cartels and criminal enforcement, said: "Any company that discloses confidential future pricing information to its competitors risks a substantial penalty.

"It is important that companies operating in the UK understand the seriousness of such conduct and ensure effective competition compliance throughout their organisation," he said.

OFT investigators found that RBS staff passed the information to Barclays during social and industry meetings, and through telephone conversations.

It is understood that the OFT will not launch criminal proceedings against any individuals.

The OFT bases the size of its fines on a company's turnover. The biggest fine so far handed out by the OFT was a £121.5m penalty to British Airways in 2007 for price fixing over fuel surcharges.

The UK taxpayer owns 84% of RBS after the government bailed out the bank at the end of 2008.

The BBC is not responsible for the content of external internet sites

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RBS fined £28.6m for breaking competition law

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The fine was reduced from £33.6m to reflect RBS's admission and agreement to co-operate over the breaches, the OFT said in a statement. The OFT began its probe after a tip-off from Barclays Bank that RBS had passed it confidential information about the pricing of loans.

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Three South African banks have been implicated among 17 banking groups in 'widespread' collusion relating to the the price-fixing of the rand.

Following an almost two-year investigation into the matter, the Competition Commission has now referred a collusion case to the Competition Tribunal for prosecution.

According to the Competition Commission, it has been investigating the matter since April 2015. The investigation looked at cases of price fixing and market allocation in the trading of foreign currency pairs involving the rand.

In mid-2015, when the investigation kicked off, Competition Commissioner Tembinkosi Bonakele said that the collusion was widespread, and happened very "casually" through electronic platforms, such as group chats.

Reuters reported that the banks used an instant messaging chat room called "ZAR Domination", to coordinate their trading activities when giving quotes to customers who buy or sell currencies.

ZAR is the code for the South African rand used in financial markets.

It has been alleged that currency traders have been buying and selling US dollars in exchange for the rand at fixed prices. This was accomplished by making false sales to drive up demand, or colluding to agree not to trade for specified periods of time.

What sparked the local investigation is still unknown, however it followed several international investigations where prominent banking groups were brought to book for price-fixing, and were made to pay fines or settlements.

In South Africa's case, the Commission is seeking an order declaring that the 17 banks are liable for the payment of an administrative penalty equal to 10% of their annual turnover.

"The referral of this matter to the Tribunal marks a key milestone in this case as it now affords the banks an opportunity to answer for themselves‚" said the commissioner, Tembinkosi Bonakele.

The 17 banks implicated include:

Bank of America Merrill Lynch International

BNP Paribas

JP Morgan Chase & Co

JP Morgan Chase Bank

Investec

Standard New York Securities

HSBC Bank

Standard Chartered Bank

Credit Suisse Group

Standard Bank of South Africa

Commerzbank AG

Australia and New Zealand Banking Group

Nomura International

Macquarie Bank

ABSA Bank Limited (ABSA)

Barclays Capital

Barclays Bank

Read: R500,000 fine or 10 years in jail for collusion and price-fixing in SA

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3 South African banks face massive fines for price-fixing and collusion

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Three South African banks have been implicated among 17 banking groups in 'widespread' collusion relating to the the price-fixing of the rand. Following an almost two-year investigation into the matter, the Competition Commission has now referred a collusion case to the Competition Tribunal for prosecution.

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Scania has been fined 880m euros (£771m) by the European Commission for colluding with five other truckmakers over prices and emissions costs.

The other five companies were given a record 2.9bn euro fine in July 2016 but Scania held out and would not co-operate with the investigation.

The EU antitrust regulators ruled that Scania, owned by Volkswagen, and the other companies colluded for 14 years.

Volkswagen's Man, Daimler, Volvo, Iveco and DAF admitted to taking part.

Man avoided a fine after blowing the whistle on the cartel and the others had their fines cut by 10% for pleading guilty.

The companies had been accused of colluding to fix prices and avoid the costs of stricter pollution rules around emissions by passing them on to consumers.

Between them, they produce nine out of every 10 medium and heavy trucks sold in Europe.

'Cosy'

"Instead of colluding on pricing, the truck manufacturers should have been competing against each other - also on environmental improvements," European Commission competition chief Margrethe Vestager said in a statement.

The Commission added that the plan was formed at a secret meeting between senior managers in a "cosy" Brussels hotel.

It also stressed that the investigation did not reveal any links between the cartel and allegations of carmakers cheating on emissions control testing.

Scania's fine is the second highest in the case, behind the 1.01bn euro penalty given to Daimler.

The company has denied any wrongdoing and because it did not agree to settle the case with the others, it now has the option of challenging regulators in court.

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Scania fined 880m euros over price collusion

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Scania has been fined 880m euros (£771m) by the European Commission for colluding with five other truckmakers over prices and emissions costs. The other five companies were given a record 2.9bn euro fine in July 2016 but Scania held out and would not co-operate with the investigation.

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After Steven Soderbergh's adaptation of Kurt Eichenwald's nonfiction book The Informant debuted to largely positive reviews last weekend, price fixing is all the conversational rage again. Okay, that statement is not even remotely true, but Soderbergh's film, which details a mid-1990s scheme to rig the price of the animal feed additive lysine, at least brought the anti-competitive practice to the big screen.

Just how common is price fixing, though? That's tough to say, but let's have a look at a few notable examples from business history.

1. Roche Doesn't Learn Its Lesson

In 1973, Stanley Adams was an executive at the Swiss pharmaceutical firm Hoffman-LaRoche when he uncovered some rather incriminating documents about his employer. It turned out that the company was part of a price-fixing scam in the international market for vitamins. Adams decided to pass his findings on to the European Economic Commission in a confidential memo detailing how Roche manipulated the bulk vitamin market.

Adams kept his end of the deal with the EEC, but the Commission did a lousy job with the whole "confidential" thing. It accidentally gave Roche copies of documents that included the whistleblower's name, and under Swiss law, that meant Adams could be arrested for industrial espionage and theft. Adams spent months in solitary confinement in a Swiss prison; his wife was so distraught that she committed suicide.

Eventually Adams got out of jail, and Roche somehow managed to avoid taking a hard hit for its role in the price fixing. Getting off the hook for this offense may have just made the company more brazen, though. From 1990 to 1999, it engaged in an illegal price-fixing cartel for vitamins again, and this time Roche and its co-conspirators got nabbed. In 1999, the company pled guilty to price fixing in the U.S. and paid a $500 million fine. Within two years, the European Union had also taken Roche to task for its nefarious pricing and fined the company to the tune of 462 million euros.

2. Heavy Equipment Gets Heavy Prices

If you needed to buy heavy equipment in the 1950s, you were probably going to pay too much thanks to a price-fixing cartel headed by General Electric and Westinghouse.

The biggest players in the equipment market met secretly to fix prices on items like turbines and switch gear.

So who blew the whistle on this cartel? Nobody. The Tennessee Valley Authority actually caught the companies red-handed. When reviewing its financial records, the TVA found something strange: for the previous three years, 47 manufacturers had been submitting identical bids for projects. Since the bids were supposedly a secret, something seemed amiss; for example, it was a bit fishy that the TVA would get eight identical bids of $12,936 for an order of 4200 insulators.

How did the scam work? The heads of these companies would meet at public locations like golf courses and restaurants and pick out both a winning bid and a separate set of identical losing bids for each project or order.

Companies got the right to submit the winning bid by a rotation system based on - no joke - the phases of the moon. The system bilked taxpayers out of nearly $175 million each year.

When the government unraveled this plot in 1960, it dropped the hammer on the price fixing executives. Nearly 50 execs paid large fines, and nine employees of GE and Westinghouse spent a month or more in jail.

3. British Dairies Milk the Customers' Wallets

In late 2007, British fans of milk and cheese got some bad news: their supermarkets and milk suppliers had been illegally rigging the prices of dairy products since 2002. The Office of Fair Trade learned that many of the U.K.'s largest supermarket chains had been colluding to raise the prices of dairy products, and their milk distributors, namely Dairy Crest and Robert Wiseman Dairies, had been the go-betweens for the ostensibly secret pricing decisions.

The anti-competitive behavior supposedly cost customers close to 270 million pounds over the course of the scam, and the companies involved faced fines that maxed out at a combined 116 million pounds.

4. Flat Glass Gets a Flat Price

In 2007, the European Commission undermined a price-fixing scheme among the makers of flat glass, the variety that is used to make windows, doors and mirrors. In 2004 and 2005, four major makers of flat glass-Asahi, Guardian, Pilkington, and Saint-Gobain-secretly met to discuss artificially raising their prices.

As a result, the 1.7-billion-euro flat glass industry got a nice little bump in its revenues, or at least it did until the European Commission got to the bottom of the strange pricing. The Commission didn't take it easy on the offending parties, either. It fined the four companies a total of nearly 487 million euros for violating the ban on cartel behavior and price fixing.

5. British Airways Gives Fuel Prices a Hike

Remember the soaring fuel prices that gripped the travel industry a few years ago? British Airways found a less-than-scrupulous way for the rising prices to help pad its bottom line. When airlines started tacking fuel surcharges onto passengers' flight costs, someone at BA apparently saw a way to make some quick cash.
In 2004, the airline entered into secret talks with its rival Virgin Atlantic to simultaneously bump up their fuel surcharges, a practice that continued into 2006. Over the course of the collusion, fuel surcharges rose from an average of five pounds a ticket to over 60 pounds a fare.
When Virgin Atlantic's lawyers realized what the company had done, they did the only thing they could do: they ratted out British Airways. Virgin ended up getting immunity for providing the goods on its former partner in collusion, while BA got walloped with record fines. The British Office of Fair Trading nailed the airline for 121.5 million pounds, while the American Department of Justice smacked it with an additional $300 million fine. Ouch.

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After Steven Soderbergh's adaptation of Kurt Eichenwald's nonfiction book The Informant debuted to largely positive reviews last weekend, price fixing is all the conversational rage again. Okay, that statement is not even remotely true, but Soderbergh's film, which details a mid-1990s scheme to rig the price of the animal feed additive lysine, at least brought the anti-competitive practice to the big screen.

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The schools are facing "financial penalties" as a result of their action, the OFT said.

It found that the schools had exchanged information on their plans for increasing the fees they would charge for boarders and day pupils between 2001 and 2004.

The system worked through a survey, known as the "Sevenoaks survey", which was updated regularly.

Between February and June each year schools would detail their fees for the following September. The information was then circulated in the form of tables among all the schools involved.

The tables were updated and sent round again between four and six times each year as schools "developed their fee increase proposals", the OFT said.

"This regular and systematic exchange of confidential information as to intended fee increases was anti-competitive and resulted in parents being charged higher fees than would otherwise have been the case," the OFT said.

The schools concerned are: Ampleforth College, Bedford School, Benenden School, Bradfield College, Bromsgrove School, Bryanston School, Canford School, Charterhouse School, Cheltenham College, Cheltenham Ladies College, Clifton College, Cranleigh School, Dauntsey's School, Downe House School, Eastbourne College, Epsom College, Eton College, Gresham's School, Haileybury School, Harrow School, King's School Canterbury, Lancing College, Malvern College, Marlborough College, Millfield School, Mill Hill School, Oakham School, Oundle School, Radley College, Repton School, Royal Hospital School, Rugby School, St Edward's School, Oxford, St Leonards-Mayfield School, Sedbergh School, Sevenoaks School, Sherborne School, Shrewsbury School, Stowe School, Strathallan School, Tonbridge School, Truro School, Uppingham School, Wellington College, Wells Cathedral School, Westminster School, Winchester College, Woldingham School, Worth School and Wycombe Abbey.

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50 private schools guilty of price fixing

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The schools are facing "financial penalties" as a result of their action, the OFT said. It found that the schools had exchanged information on their plans for increasing the fees they would charge for boarders and day pupils between 2001 and 2004. The system worked through a survey, known as the "Sevenoaks survey", which was updated regularly.