Legal Question in Business Law in New York
Price Fixing
Our firm has contracted services with an area telecommunications co. for serveral years. Each year we, and other vendors submit our service pricing and the client uses services from several vendors. They have recently implimented mandatory pricing that they have instructed all vendors to adhere to. We have been told that they will not pay us any more than what they have determined to be fair prices. Is this price fixing? They are the only telecom in our region and it seems they are using there monopoly powers to control the actions of our businesses.
1 Answer from Attorneys
Re: Price Fixing
Generally, "price fixing" under the law occurs when someone selling a product, such as a wholesaler, tells the retailer that they must charge a certain price upon resale. (so called vertical restraint of trade) Or, where a group of people engaged in the same business get together and agree to sell for a certain minimum price. (so called horizontal restraint of trade)
Your question is whether a company can announce that it will not pay more than a certain price for a certain service. Doesn't sound like this would be within one of the recognized areas of antitrust or trade regulation. You might want to check further (anyone else have any thoughts?), but I wouldn't waste too much time on the issue.
For your info., there are both federal and state antitrust laws. This would arguably be under federal "Sherman Act," which bans unreasonable restraints on trade, and NY Donnelly Act.
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