Which statement describes a Price Fixing Agreement?

• A. Makes it an offence for any 2 competitors to fix or control the price including components of price, such as commissions, discounts, rebates or other price concessions
• B. A unilateral decision by a single broker to change commission rates
• C. An agreement to share customers
• D. Price competition is the norm

Answer: (A)

Price fixing is when two or more competitors agree on the price or price-related terms of a service, such as commissions, discounts, rebates, or other price concessions, so that there is no independent price competition. This kind of agreement harms consumers by fixing prices and is prohibited under competition laws. In this context, the best description is that making an agreement among competitors to fix price components is illegal and constitutes price fixing.

A unilateral decision by a single broker to change commission rates isn’t price fixing because it involves only one party making a change and no agreement with other competitors. An agreement to share customers describes collusion to divide the market rather than to fix pricing. Saying price competition is the norm is the opposite of price fixing, as it implies that prices are determined through competition, not an agreed-upon fixed level.