Conscious parallelism refers to businesses changing their prices to reflect the prices of competitors within a market without colluding or communicating with competitors. Unlike
price-fixing which involves conscious agreement between competitors and violating antitrust laws, conscious parallelism occurs where businesses just change prices in reaction to competitors, and conscious parallelism does not constitute illegal activity on its own. Businesses in very
competitive markets such as airlines do this almost out of necessity in order to stay profitable. However, critics point out that this activity can cause the same harmful effects that outright price-fixing creates. While conscious parallelism does not constitute an antitrust violation on its own, other evidence in combination with
conscious parallelism can lead to a charge of collusion. An example of conscious parallelism would be all shipping companies increasing their package rates by 15% after the U.S. Postal Service does so without ever speaking with employees of the Postal Service. [Last updated in June of 2021 by
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Human Resource Management15th EditionJohn David Jackson, Patricia Meglich, Robert Mathis, Sean Valentine 249 solutions journal article The Definition of Agreement under the Sherman Act: Conscious Parallelism and Refusals to DealHarvard Law Review Vol. 75, No. 4 (Feb., 1962) , pp. 655-706 (52 pages) Published By: The Harvard Law Review Association https://doi.org/10.2307/1338567 https://www.jstor.org/stable/1338567 Read and download Log in through your school or library Subscribe to JPASS Unlimited reading + 10 downloads Monthly Plan
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Abstract The definition of agreement has been a recurring antitrust problem because illegality under the Sherman Act is often predicated upon the existence of an agreement to restrain trade. Professor Turner examines whether the term agreement is sufficiently broad to include certain conduct-consciously parallel action and refusals to deal-even in the absence of explicit agreement among the parties. Although the author urges the desirability of an inclusive concept of agreement in these contexts, he illustrates, by example, that a finding of agreement should not mechanically lead to a finding of illegality. Rather the consistency of the particular agreement with the dictates of antitrust law must be evaluated. Journal Information The Harvard Law Review publishes articles by professors, judges, and practitioners and solicits reviews of important recent books from recognized experts. Each issue also contains pieces by student editors. Published monthly from November through June, the Review has roughly 2,000 pages per volume. All articles--even those by the most respected authorities--are subjected to a rigorous editorial process designed to sharpen and strengthen substance and tone. The November issue contains the Supreme Court Foreword (usually by a prominent constitutional scholar), the faculty Case Comment, twenty-five Case Notes (analyses by third-year students of the most important decisions of the previous Supreme Court Term), and a compilation of Court statistics. The February issue features the annual Developments in the Law project, an in-depth treatment of an important area of the law. Publisher Information Founded in 1887 by future Supreme Court Justice Louis D. Brandeis, the Harvard Law Review is an entirely student-edited journal that is formally independent of the Harvard Law School. Approximately ninety student editors make all editorial and organizational decisions and, together with a professional business staff of four, carry out day-to-day operations. Aside from serving as an important academic forum for legal scholarship, the Review is designed to be an effective research tool for practicing lawyers and students of the law. The Review also provides opportunities for its members to develop their own editing and writing skills. All student writing is unsigned, reflecting the fact that many members of the Review, in addition to the author and supervising editor, make a contribution to each published piece. Rights & Usage This item is part of a JSTOR Collection. What is conscious parallelism?Conscious parallelism refers to businesses changing their prices to reflect the prices of competitors within a market without colluding or communicating with competitors.
What does Section 1 of the Sherman Act mean?This section of the Sherman Act prohibits agreements between two or more individuals or independent entities that unreasonably restrain trade (15 U.S.C. § 1). Section 1 also regulates foreign entities doing business abroad if the business sufficiently affects US consumers.
What does the Sherman Act do?The Sherman Act outlaws "every contract, combination, or conspiracy in restraint of trade," and any "monopolization, attempted monopolization, or conspiracy or combination to monopolize." Long ago, the Supreme Court decided that the Sherman Act does not prohibit every restraint of trade, only those that are ...
Is parallel pricing illegal?Absent an anti-competitive agreement, however, the algorithm's market monitoring function may simply enable firms to observe and match competitors' prices. This type of parallel pricing is not illegal just as it would not be illegal if achieved without the help of a pricing algorithm.
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