Competition Matters

Price-fixing occurs when competing businesses conspire to raise, lower, or maintain the prices of goods or services at certain price points. This practice violates state and federal antitrust laws when the conspirators agree to impede the free market by restricting competition, which reduces the incentive for businesses to lower their prices or improve quality to attract customers. Thus, what often results under the circumstances is that consumers pay higher prices or receive deficient goods or inadequate services.
 
Antitrust enforcers play an important role in promoting competition so that businesses are motivated to compete for customers by lowering their prices or improving quality. Indeed, antitrust enforcers investigate and litigate anticompetitive practices such as price-fixing on various fronts. That task becomes even more challenging when conspiring businesses use advanced technology to operate and conceal their scheme. One example involves the use of computer algorithms to fix the prices of wall posters sold online.
 
In January of 2019, Daniel William Aston, a former part owner and director of Trod Limited (doing business as “Buy 4 Less,” “Buy For Less,” and “Buy-For-Less-Online”), pleaded guilty in federal court for fixing the prices of wall posters sold on an online marketplace and was sentenced to serve six months in prison. According to court documents, Aston secretly met with co-conspirators to fix the prices of certain wall posters at agreed-upon price points and used computer algorithms to coordinate any changes in pricing to avoid price competition. This anticompetitive scheme occurred from about September of 2013 to about January of 2014.
 
Additionally, other co-conspirators were charged, pleaded guilty, and sentenced in federal court for their participation in the above-referenced price-fixing scheme. In 2015, David Topkins, who wrote the computer algorithms used to avoid price competition, pleaded guilty and was sentenced to pay a $20,000.00 fine. In 2016, Trod Limited pleaded guilty and was sentenced to pay a $50,000.00 fine.
 
The use of artificial intelligence in this case reduced the amount of direct communication (i.e., phone calls, emails, etc.) that had to take place among the conspirators. Reduced communication makes detection more difficult, but not impossible.  If you suspect unscrupulous behavior like this, or have questions about how to recognize anticompetitive activity, please call the Antitrust Section of the Ohio Attorney General’s Office at 614-466-4328.