Fixing Prices and Rigging Bids

Fraud examiners and auditors should familiarize themselves with the types of cases that can violate U.S. antitrust regulations. 

For several years, John, the purchasing manager at Buyer Inc., has bought different types sprockets from three or four companies for varying prices. John honestly obtained the best deals by aggressively shopping around prices he received; sprocket sales reps often would lower prices to meet or beat other companies' offers.

John recently received notices of price increases from the major sprocket sellers. Those companies raise prices by comparable amounts at the same time so that all sprockets now cost about the same, give or take a dollar or two.

John calls the usual list of sprocket companies for better prices but he's told that the prices are firm and straight off the price sheet.

Meanwhile, inside one of the sprocket companies - Rocket Sprocket Corp. - sales reps have been complaining. They like the higher prices but are concerned that they can no longer offer discounts to their customers to get business. Since they work on commissions, they worry about losing money if they can't offer lower prices - especially to certain customers.