Business litigation often involves people who choose to work together. One business partner may sue the other when they have clearly breached their fiduciary duty to the organization. Shareholders can take legal action against organizations and executives. Vendors or service providers could breach contracts, forcing your clients to litigate.
Other times, misconduct in the business world could involve inappropriate behavior from competitors. Corporate espionage and other attempts at unfair competition could prompt litigation. Price fixing schemes may lead to one professional or business taking legal action against a group of competitors.
What constitutes price fixing?
A capitalist economy requires free competition. Every business can set its own prices for the services or goods it offers. Consumers can then make choices based on pricing, quality, convenience and other personal priorities.
However, some businesses or professionals might work together to try to push a competitor out of the market. Price fixing occurs when multiple parties agree to use the same pricing model to undercut a competitor. The goal is to create artificial pressure that undermines a competitor’s market share. Price fixing may even involve providing goods or services at a loss to push a competitor out of business.
One company that learns that multiple competitors have cooperated to undercut their market share could potentially take legal action in response. A successful lawsuit brought on the basis of unfair competition and a violation of antitrust regulations could lead to an injunction preventing future misconduct. The courts could also award the targeted company damages in certain circumstances.
Gathering documentation to support claims of price fixing can help business leaders prepare to take action. Business litigation can help to address price fixing and other forms of unfair competition.
