Collusion is an agreement between two or more parties to conceal or misrepresent their activities or intentions This can be done in the marketplace through cartels, monopolies, price-fixing, or market-sharing. It is illegal in most nations, including the United States, as it undermines competition and harms consumers.
1. Price Fixing
Price fixing is when two or more businesses collude to set the prices for their goods and services. This can be done to keep prices high, which allows them to maximize profits. It can also be used to drive competitors out of the market and create a monopoly.
2. Bid Rigging
Bid rigging is when two or more companies collude to eliminate competition in the bidding process. This can be done through a process called "cover bidding," in which one company submits multiple bids for the same project, increasing the likelihood that the project will be awarded to them.
3. Monopolies
Monopolies are created when a single company or group of companies controls an entire market. This can be done legally if they own or control the majority of a particular market, but it also can be achieved through collusion. The goal is to eliminate competition and increase prices, thus increasing profits.
4. Cartels
Cartels are organizations that collude to control the production and sale of a particular good or service. The goal is to increase prices and maximize profits by controlling the supply and limiting the amount of competition.
5. Market Sharing
Market sharing is an agreement among competitors to divide a market into different segments and allocate them among themselves. This allows them to maximize their profits by avoiding competition in certain areas. This is illegal in most countries.