Price Fixing

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1.0 Introduction

Price fixing is a practicing on price for the products and services which there are a group of same line business work together in order to manipulated market by setting a high price on the products and services rather than allowing the price to flow naturally for benefit themselves.[1] Price fixing of products and services is illegal in most of the countries and some countries come with serious legal consequences.

Price fixing is normally having two or more companies meet and decide to offer the product and service at the same price by creating high price which consumers are forced to pay for lack of choices. (Ghillyer.W, 2010) If two companies selling products and services at the same price this would not be illegal however when someone able to proved that there is collusion between companies price fixing would be stated.

2.0 Case Studies

2.1 Malaysia Government Price Fixing Case

Asian rice stocks has already near to the danger level which the world grain stocks have also fall until half since 1999 from a big enough provender to feed worldwide for 116 days to a predicted only 57 days by year end.[2]

Malaysia had also fall into the hole of panic on rice supply last year when faces serious price escalation for the imported rice as well as shortage for imported rice due to the major rice suppliers in Malaysia such as Thailand, India, Vietnam and China has imposition of restrict on the exportation of rice. Even though Malaysia also a country that has produces rice however it is totally not enough to meet Malaysian annually consume almost 2.2 million tons of rice of which some 657,900 tons of rice are imported from others countries.

In May of 2008, Malaysia government has set up several response measures to control the prices of rice also to ensure sufficient supply which included 15 percent of Super Tempatan rice as a controlled item with price ranging from RM 1.65 to RM 1.80 per kilogram according to zones. Government also fixing the ceiling price for the 5 percent and 10 percent Super Special Tempatan at RM 2.80 per kilogram and RM 2.70 per kilogram.

2.1.1 The Reason Of Malaysia Government Practice Price Fixing

In May of 2008, the fifth Prime Minister Datuk Seri Abdullah Ahmad Badawi in Malaysia had announce that government fixing the prices of rice in order to ensure that supply of the rice are enough to meet Malaysian demands also to prevent the price of the rice will rising followed a substantially increase in prices in the market over the last month especially Sabah and Sarawak that depending the import rice to meet consumer need and want. Moreover, fixing the price of rice has enable consumer to purchase the rice at a more reasonable price at the same time government may able to control the quality of rice that sold to the consumer as well.

2.1.2 The Punishment Of Government Practice Price Fixing

There is no any punishment on the Malaysia government for fixing the price of rice for the reason of practicing price fixing in here does not involving any profit or illegal issue but is to ensure that Malaysian are able to purchases rice on a more reasonable price as well as maintain the quality of rice. This action may also to prevent Malaysian drop into a panic hole for purchasing rice with serious price escalation.

2.2 Malaysia Airline Price Fixing Case

In February of 2010 Malaysia Airline System Berhad(MAS) has announced to been involved in accusation of price fixing on air transport services and related surcharges. Malaysia Airline System Berhad stated that the accused has been submitted to United States District Court for Eastern District of New York by freight forwarder Benchmark Export Services.

Malaysia Airline System Berhad was the thirteenth airline that had been accused by Australian Competition and Consumer Commission (ACCC) for involving in price fixing of air cargo industry.[3] The ACCC stated that between 2001 until 2006 Malaysian Airline System Berhad...
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