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From Antitrust Law Daily, July 21, 2014

“Explicit” invitation to fix prices of barcodes challenged by FTC

It's never a good idea to send an e-mail to a competitor suggesting “work[ing] together on keeping prices where they should be.” Two actions announced by the FTC today illustrate the danger of inviting competitors to collude. One complaint names Jacob J. Alifraghis, who operates, and the other complaint names Philip B. Peretz and 680 Digital, Inc., also d/b/a Nationwide Barcode (In the Matter of Jacob J. Alifraghis, FTC File No. 141 0036; In the Matter of 680 Digital, FTC File No. 141 0036).

These two Internet resellers of UPC barcodes have agreed to settle charges that they violated the FTC Act by inviting competitors to join in a collusive scheme to raise the prices charged for barcodes sold online. The resellers of the of universal product codes or UPC barcodes used by retailers for price scanning and inventory purposes have agreed to refrain from communicating with their competitors about rates or prices. They are also barred from entering into, participating in, inviting, or soliciting an agreement with any competitor to divide markets, to allocate customers, or to fix prices.

In the separate complaints, the FTC detailed the “particularly egregious conduct” of the respondents. According to the FTC, an August 4 e-mail from Alifraghis to his competitors outlining a mechanism by which the companies could fix the price of barcodes was a clear example of an invitation to collude. Ensuing private communications established a series of subsequent invitations, with each respondent repeatedly communicating its willingness to raise and fix prices for barcodes, contingent on other competitors doing so, and soliciting rivals to participate in a common scheme, it was noted.

The complaints do not allege that an agreement was reached. If the invitations were accepted and the competitors reached an agreement, the Commission would have referred the matter to the Department of Justice for a criminal investigation, the FTC explained.

Under the terms of the proposed consent orders with Alifraghis and Peretz, the respondents would be prohibited from:

  • communicating with their competitors about barcode rates or prices;

  • entering into, participating in, maintaining, organizing, implementing, enforcing, inviting, offering, or soliciting an agreement with any competitor to divide markets, allocate consumers, or fix prices; and

  • urging any competitor to raise, fix, or maintain price or to limit or reduce the terms or levels of service they provide.

The complaints mention a third barcode seller; however, no details about the unnamed entity were provided.

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