I disagree that a sole trader consultant is at risk of collusion if he or she price matches or even consults with another competitor before setting the price on a single quote. I’ve run an IT business that included consulting services. From time to time we would submit bids as the Prime Contractor which included various suppliers of products and services, including with service providers that may compete with us on other jobs.
Similarly, when pricing consulting jobs, sometimes I’d set a lower price because the skills and knowledge required was more general. I’d use different rates when I knew the knowledge required was specialised and in short supply, or involved much more complex work.
That is radically different to the pricing practices the large retailers and supermarkets apply. Their buying practices are similarly questionable, albeit probably not technically “collusion” in either case.
I agree that price matching in itself is not collusive as frequently the prices each will offer is general knowledge in the industry.
If you consult with a competitor before you each tender about what you two are going to offer it is a restriction of free trade, it is anticompetitive and collusion.
If you are the PC and subcontracting to others then you are not colluding as that does not affect the price the buyer pays in an improper manner, or at all.
The fact that the same two players may be involved in each situation is not the key point, it is the actions that they take that matters.
That could indeed be collusion. I was referring to bidding under a teaming agreement - typically exclusive for the bid. However, you may enter into discussions including discussing the sub-contract rates for the job, which means you have knowledge of the rates they intend to use. You may not agree to engage, and they may not offer the same rates to another bid…or they may. You know what they offered you, but that’s all you know.
My point is, it’s not the same thing as two companies that control a large portion of the market discussing how they plan to set prices - both in the supply chain and geographic distribution. One sole trading consultant can hardly control a market.
True, but there are two factors in play here, one is market power, the other is willingness to make improper agreements. The two may happen together or not. As The Conversation article I linked points out that the way the game is played in Oz market share does seem to be correlated to improper behaviour in practice.
It is a planned and deliberate activity as a matter of business practice by both parties independently. It isn’t collusion as they wouldn’t be foolish enough to have any agreement to do so. However, under their supply agreements, the vendor is required to match for each chain the price they charge the other chain.
Duopolies thereby have effectively the same market power as monopolies.
As that kind of behaviour would be anticompetitive it would run the risk of being illegal under ACL I dont see how it would be contractual. The AFR would need good evidence of such happening.
implies it is occurring but doesn’t say it exactly.
The term usually introduced is a “supplier warrants to give us the best price offered to anyone” provision. These have been held not to be collusion but ordinary retailer negotiation trying to maximise profits.
I will look for the article which may have been even older. The Grocery Code of Conduct requires fair dealings as a whole with wholesalers so it could be interpreted to mean that a retailer who buys less of a product cannot require the supplier to give them the same price as a bigger buyer.
