A supplier or manufacturer is free to establish and change the prices of its products and services. In doing so, it usually observes and reacts to the decisions of its competitors. However, it is a gross violation of competition law to agree or coordinate in any way with competitors to fix or stabilise prices. The mere conduct that suggests that competitors have coordinated their pricing can constitute a violation of competition law.
Prohibitions amongst competitors include:
- Jointly establishing selling or purchase prices;
- Jointly establishing price increases;
- Jointly setting minimum or maximum prices (or price ranges);
- Jointly agreeing rebates, discounts and other conditions of supply;
- Exchanging cost or price-related information followed by fixing similar pricing;
- Jointly limiting or controlling production, markets, technical development, or investment.
It is strictly prohibited to fix any price-related terms with competitors. Companies may not discuss any aspects of cost price or pricing with their competitors unless the parameters of exchange are carefully constructed (and documented) and this exchange take place for pro-competitive reasons.