Downfall of Legal Entities Through Price Fixing

Author: Anubhav Dash

Editors: Jigyasa Prabhakar, Ashleigh Rivera

Issue 

Price Fixing, an agreement that has played a substantial role upon maintaining positive supply and chain conditions of legal entities. As Ben Franklin’s novel Poor Richard’s Almanac mentions“Beware of little expenses; a small leak will sink a great ship”, these words seem to apply during conviction of top companies under antitrust laws. These incidents were not major collisions between executives, but rather minor conflicts or incidents occurring between managers and salespeople who are unaware about management’s policies regarding the attainment of illegal profits. The key factor towards prevention of conflict between the two forces is to not have pride from attaining illegal profits. Following this, social analysts analyze how laws tend to be bee stings that have the ability to trap major corporations to fall under the sting of price-fixing laws. With this, many corporations are concerned towards brand exposure, advertisement in relation to the conviction of price - fixing laws. 

Analysis 

The violation of price fixing laws have been high and illustrate the type of consequences corporations experience when initiating key deals, acquisitions, and business policies. Statistics from the Justice Department demonstrate that 60% of antitrust felons receive prison sentences. Moreover, corporations face increasing difficulties in implementing key decisions in relation to the number of investments being utilized to develop a positive public image upon society. By contrast, the expansion of corporations to different regions establishes the enforcement of more laws upon the company that adds more responsibility, awareness during execution of certain business practices. Top executives are concerned about the type of process their company has approached to public declarations and internal directives. One CEO expresses the frustration the executives experience during the conviction of “company’s ethical standards, internal morale, public image, and profits gained”, the context represents a sense of fear for the type of consequences the corporation can undergo during unprecedented situations, circumstances depicted. Furthermore, antitrust cases in 1977 foreshadow how the paper industry was affected by separate persecutions for price fixing with key products such as shopping bags, containers, fine, stationary, and consumer paper. 

Key Factors 

The following aspects can be determined through investigating small details that have played a vital role in the rise of price fixing. Many individuals haven’t recognized the conspiracy folding carton industry withholds. Over 450 box-making companies withhold 5 to 7 percent of the shares, while one company controls 10 percent. In addition, the transition from box - food package industry occurred through the growth of sales from prepackaged and frozen foods. Top businesses sought to capitalize this opportunity with a fruitful approach after acknowledging what positive outcome the industry withholds. Subsequently, competitors started to initiate major long investments without prior knowledge of the type of losses to be experienced in future. However, the halt of supermarket expansion plus increase in use of plastic products provided leeway for profit declines. These declines established numerous losses faced by corporations; some losses hindered the growth of companies, leading to downfall and entrance to the darkside of the corporate world. 

Solutions 

Addressing the following issues desires a process that advocates upon modifying policies that align with price fixing laws. The adoption of business practices, strengthening corporate governance, interactions with legal experts are key assets that can enable corporations to enhance their growth, outsource their mission, and establish more foundations globally. Moreover, the following ideas can prevent legal entities from experiencing consequences during unprecedented situations, in relation to not being aware of violating a specific price fixing law. Improvements in communication between corporations when negotiating and finalizing important deals can influence it.