Why do people think price fixing is unfair? An empirical legal study on public attitudes in the USA

Abstract

The present article advances the understanding of antitrust law by providing theoretical considerations and empirical results of people’s attitudes towards price fixing, specifically within the context of fairness in US antitrust laws. Attitudes were obtained through experimental surveys on Amazon Mechanical Turk in the USA between 2018 and 2021. The empirical results suggest that perceptions of fairness influence public attitudes towards price fixing. Moreover, consumer reaction to price fixing will depend on how the consumer perceives the rules of fairness underlying the competitive market mechanism and the point used to set prices (dual entitlement theory). Results indicate that perceived outcomes and consequences of market transactions influence respondents’ judgment of price fixing. For example, public attitudes will be more lenient whenever a cost-increasing event outside firms’ control affects firms’ profit. The main implication of these findings is that antitrust authorities should not take for granted that people view price fixing as unfair and therefore consider how fairness considerations play out in their approach when dealing with price-fixing cases. The suggestion is for antitrust authorities to focus corporate compliance programmes on people’s attitudes to improve compliance to prevent cartel agreements.