---
title: Antitrust Price Fixing
description: An overview of the legal standards, elements, and remedies for antitrust price fixing claims.
keywords: [antitrust, price fixing, Sherman Act, per se, rule of reason]
category: law
---

## Introduction to Antitrust Price Fixing

Price fixing is a form of anticompetitive conduct that violates federal antitrust laws, specifically Section 1 of the Sherman Antitrust Act of 1890. 15 U.S.C. § 1. Price fixing occurs when competitors agree to set the price at which a product or service will be sold, rather than allowing prices to be determined by free market competition. This practice is considered per se illegal under the antitrust laws, meaning it is conclusively presumed to be an unreasonable restraint of trade. United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 223 (1940).

The primary purpose of the antitrust laws is to promote and protect free market competition. Price fixing undermines this purpose by eliminating competition on price, which is a core component of the competitive process. As the Supreme Court has stated, "the Sherman Act was designed to be a comprehensive charter of economic liberty aimed at preserving free and unfettered competition." N. Pac. Ry. Co. v. United States, 356 U.S. 1, 4 (1958). Accordingly, the law takes a strict stance against price fixing agreements, regardless of their actual or intended effect on the market.

## Elements of a Price Fixing Claim

To establish a claim for unlawful price fixing under Section 1 of the Sherman Act, a plaintiff must prove the following elements:

1. **An agreement between two or more competitors**: The existence of an agreement, whether express or implied, is the cornerstone of a price fixing claim. Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 768 (1984). This agreement need not be formal or written, but can be inferred from the parties' conduct and other circumstantial evidence. Interstate Circuit, Inc. v. United States, 306 U.S. 208, 227 (1939).

2. **The agreement fixed, raised, lowered, or stabilized prices**: The agreement must have the purpose and effect of affecting the price at which the competitors' products or services are sold. This can include setting a specific price, establishing a price range, or maintaining existing prices. United States v. Trenton Potteries Co., 273 U.S. 392, 397 (1927).

3. **The agreement was unreasonable**: Under the per se rule, price fixing agreements are conclusively presumed to be unreasonable and therefore illegal, without the need to analyze their actual competitive effects. Arizona v. Maricopa Cty. Med. Soc'y, 457 U.S. 332, 344-45 (1982). However, certain price-related agreements may be evaluated under the rule of reason if they are ancillary to a legitimate business transaction. Broadcast Music, Inc. v. Columbia Broad. Sys., Inc., 441 U.S. 1, 23 (1979).

## Burden of Proof and Defenses

In a private antitrust action alleging price fixing, the plaintiff bears the initial burden of establishing the three elements outlined above. If the plaintiff meets this burden, the burden then shifts to the defendant to raise any applicable defenses.

Potential defenses to a price fixing claim include:

1. **Lack of agreement**: The defendant may argue that no agreement existed, and that the alleged conduct was the result of independent, parallel decision-making rather than a collusive agreement. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986).

2. **Ancillary restraint**: As mentioned, certain price-related agreements that are ancillary to a legitimate business transaction may be evaluated under the rule of reason rather than the per se rule. Broadcast Music, 441 U.S. at 23.

3. **Government involvement**: If the government was involved in the price-setting process, the defendant may argue that the conduct was immune from antitrust liability under the state action doctrine or the Noerr-Pennington doctrine. Parker v. Brown, 317 U.S. 341, 350-51 (1943); E. R.R. Presidents Conf. v. Noerr Motor Freight, Inc., 365 U.S. 127, 135-36 (1961).

4. **Lack of market power**: The defendant may argue that it lacked sufficient market power to meaningfully affect prices, and therefore the agreement did not constitute an unreasonable restraint of trade. United States v. Visa U.S.A., Inc., 344 F.3d 229, 238 (2d Cir. 2003).

## Remedies for Price Fixing Violations

Violations of the antitrust laws, including price fixing, can result in both civil and criminal penalties. The primary remedies available include:

1. **Civil Enforcement by the Government**: The Department of Justice (DOJ) and the Federal Trade Commission (FTC) are responsible for civil enforcement of the antitrust laws. They can seek injunctive relief to prevent and restrain future violations, as well as the recovery of civil penalties of up to $100 million for corporations and $1 million for individuals. 15 U.S.C. §§ 4, 15a.

2. **Private Treble Damages Actions**: Individuals and businesses injured by price fixing can bring a private civil action for treble (triple) damages, plus the recovery of attorney's fees and court costs. 15 U.S.C. § 15(a). The damages are automatically tripled to deter anticompetitive conduct and compensate victims.

3. **Criminal Prosecution**: The DOJ can criminally prosecute individuals and corporations for egregious price fixing schemes, which can result in fines of up to $100 million for corporations and $1 million for individuals, as well as imprisonment of up to 10 years. 15 U.S.C. § 1.

4. **Injunctive Relief**: Courts can issue injunctions to prevent and restrain future price fixing violations, such as ordering the dissolution of an illegal cartel or the termination of a price fixing agreement. 15 U.S.C. § 4.

The availability and severity of these remedies underscores the gravity with which the law views anticompetitive price fixing conduct.

## Landmark Price Fixing Cases

The courts have had numerous opportunities to address and clarify the standards for unlawful price fixing. Some notable cases include:

1. *United States v. Socony-Vacuum Oil Co.*, 310 U.S. 150 (1940): This landmark Supreme Court decision established the per se rule against price fixing, holding that any agreement between competitors to fix, raise, lower, or stabilize prices is illegal without regard to its reasonableness or actual effects on the market.

2. *Catalano, Inc. v. Target Sales, Inc.*, 446 U.S. 643 (1980): The Supreme Court reaffirmed the per se rule against price fixing, finding that an agreement among wholesalers to eliminate short-term trade credit was a form of price fixing and thus per se unlawful.

3. *Texaco Inc. v. Dagher*, 547 U.S. 1 (2006): The Supreme Court held that the parallel pricing decisions of a legitimate joint venture did not constitute unlawful price fixing, as the venture was a single entity incapable of engaging in the concerted action required for a Section 1 violation.

These and other landmark cases have helped to define the scope and application of the antitrust laws' prohibition on price fixing agreements.

## Conclusion

Antitrust price fixing is a per se violation of Section 1 of the Sherman Act, which reflects the law's strong condemnation of this anticompetitive practice. By eliminating competition on price, price fixing undermines the fundamental purpose of the antitrust laws to promote free market competition. To establish a price fixing claim, a plaintiff must prove the existence of an agreement between competitors that had the purpose and effect of fixing, raising, lowering, or stabilizing prices. While defendants may raise certain defenses, the law imposes severe civil and criminal penalties to deter and punish unlawful price fixing conduct.