collusion

(redirected from collusively)
Also found in: Dictionary, Thesaurus, Legal, Encyclopedia.

collusion

the deliberate suppression of competition between themselves by a group of rival suppliers. Collusion may be confined to a single area of business activity for example prices, or cover a wider range of limitations including coordinated marketing, production and capacity adjustments. Collusion may be practised through formalized arrangements specifying obligations (either in writing or orally) and institutional mechanisms for coordinating behaviour, as in a CARTEL or ANTICOMPETITIVE AGREEMENT/ RESTRICTIVE TRADE AGREEMENT, or operated by more informal means through, for example, an INFORMATION AGREEMENT or CONCERTED PRACTICE.

The purpose of collusion may be to monopolize jointly the supply of a product in order to extract MONOPOLY profits, or it may be a defensive response to poor trading conditions, seeking to prevent prices from dropping to uneconomic levels. Because, however, of its generally adverse effects on market efficiency (cushioning inefficient, high-cost suppliers), and because it deprives buyers of the benefits of competition (particularly lower prices), collusion is usually prohibited outright, by COMPETITION POLICY, as in the UK, under the COMPETITION ACT 1998.

collusion

a form of INTERFIRM CONDUCT pattern in which firms arrive at an agreement or ‘understanding’ covering their market actions. Successful collusion requires the acceptance of a common objective for all firms (for example, JOINT-PROFIT MAXIMIZATION) and the suppression of behaviour inconsistent with the achievement of this goal (for example, price competition). Collusion may be either overt or tacit. Overt collusion usually takes the form of either an express agreement in writing or an express oral agreement arrived at through direct consultation between the firms concerned. Alternatively, collusion may take the form of an ‘unspoken understanding’ arrived at through firms’ repeated experiences with each other's behaviour over time.

The purpose of collusion may be jointly to monopolize the supply of a product in order to extract MONOPOLY profits, or it may be a ‘defensive’ response to poor trading conditions, seeking to prevent prices from dropping to uneconomic levels. Because, however, of its generally adverse effects on market efficiency (cushioning inefficient, high-cost suppliers) and because it deprives buyers of the benefits of competition (particularly lower prices), collusion is either prohibited outright by COMPETITION POLICY or permitted to continue only in exceptional circumstances.

In the UK, under the COMPETITION ACT 1998, collusion in the form of an ANTICOMPETITIVE AGREEMENT/RESTRICTIVE TRADE AGREEMENT is prohibited outright. Previously, under the RESTRICTIVE TRADE PRACTICES ACT, such agreements were allowed to continue, providing ‘net economic benefit’ could be established. See CARTEL, RESTRICTIVE TRADE AGREEMENT, ANTICOMPETITIVE AGREEMENT, OLIGOPOLY, DUOPOLY, INFORMATION AGREEMENT, RESTRICTIVE PRACTICES COURT.

References in periodicals archive ?
He could not resist returning to the fray (whilst Mr Pottering looked on collusively and slightly ironically, and Mr Vedrine stood glowering): "we have all been banking on the Presidency, given the role France has played in the European integration process.
But he added, "On the other hand, if they were done collusively, they could violate antitrust laws.
The court also noted that allowing plaintiffs to accept or reject joint offers individually might encourage multiple plaintiffs to hedge their bets by collusively having at least one party accept the offer and at least one party decline, so they could both benefit if the judgment is greater than the offer and they could both avoid incurring costs and losing attorneys' fees if it is less.
For MCI and Sprint to behave collusively requires that other facilities-based carriers cannot mimic the path from entry to mass marketer that they had pioneered a decade earlier.
Unlike the previous examples, the female figure here is neither gazing abstractedly toward nature nor collusively toward the viewer.
The judge said the rule ``was adopted collusively with the specific intent to circumvent the terms of the injunction.
Yet this proposal does not deliver the original form of instrumentalism either, because the idea of communication ties our reading of the text to ways in which the author's intended audience would best read it in accordance with a reading schema collusively agreed with the author.
But since P is collusively fixed at the kinked point of the AR-curve, therefore there exists a tradeoff among the M[C.
The third type of analysis compares the level and stability of net income for individual Rochester hospitals during and after the HEP While many forces impact on net income, a pattern of participation in the HEP to collusively raise and stabilize hospital margins may be evident.
If the industry can act perfectly collusively, privately, it can charge [P.
In each instance, affinity disguises the degree to which Sutpen's narratives are collusively cryptic.
Instead of collusively reciting/reproducing its message of Empire loyalty and colonial obedience, she exposes its political purpose, teaching the text within the context of its Jamaican provenance, highlighting its affective meaning within the crucially different contexts of its production and consumption.