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5 Brazen Examples of Price Fixing

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After Steven Soderbergh's adaptation of Kurt Eichenwald's nonfiction book The Informant debuted to largely positive reviews last weekend, price fixing is all the conversational rage again. Okay, that statement is not even remotely true, but Soderbergh's film, which details a mid-1990s scheme to rig the price of the animal feed additive lysine, at least brought the anti-competitive practice to the big screen.

Just how common is price fixing, though? That's tough to say, but let's have a look at a few notable examples from business history.

1. Roche Doesn't Learn Its Lesson

In 1973, Stanley Adams was an executive at the Swiss pharmaceutical firm Hoffman-LaRoche when he uncovered some rather incriminating documents about his employer. It turned out that the company was part of a price-fixing scam in the international market for vitamins. Adams decided to pass his findings on to the European Economic Commission in a confidential memo detailing how Roche manipulated the bulk vitamin market.

rocheAdams kept his end of the deal with the EEC, but the Commission did a lousy job with the whole "confidential" thing. It accidentally gave Roche copies of documents that included the whistleblower's name, and under Swiss law, that meant Adams could be arrested for industrial espionage and theft. Adams spent months in solitary confinement in a Swiss prison; his wife was so distraught that she committed suicide.


Eventually Adams got out of jail, and Roche somehow managed to avoid taking a hard hit for its role in the price fixing. Getting off the hook for this offense may have just made the company more brazen, though. From 1990 to 1999, it engaged in an illegal price-fixing cartel for vitamins again, and this time Roche and its co-conspirators got nabbed. In 1999, the company pled guilty to price fixing in the U.S. and paid a $500 million fine. Within two years, the European Union had also taken Roche to task for its nefarious pricing and fined the company to the tune of 462 million euros.

2. Heavy Equipment Gets Heavy Prices

If you needed to buy heavy equipment in the 1950s, you were probably going to pay too much thanks to a price-fixing cartel headed by General Electric and Westinghouse.

The biggest players in the equipment market met secretly to fix prices on items like turbines and switch gear.

So who blew the whistle on this cartel? Nobody. The Tennessee Valley Authority actually caught the companies red-handed. When reviewing its financial records, the TVA found something strange: for the previous three years, 47 manufacturers had been submitting identical bids for projects. Since the bids were supposedly a secret, something seemed amiss; for example, it was a bit fishy that the TVA would get eight identical bids of $12,936 for an order of 4200 insulators.

How did the scam work? The heads of these companies would meet at public locations like golf courses and restaurants and pick out both a winning bid and a separate set of identical losing bids for each project or order.

Companies got the right to submit the winning bid by a rotation system based on - no joke - the phases of the moon. The system bilked taxpayers out of nearly $175 million each year.

When the government unraveled this plot in 1960, it dropped the hammer on the price fixing executives. Nearly 50 execs paid large fines, and nine employees of GE and Westinghouse spent a month or more in jail.

3. British Dairies Milk the Customers' Wallets

In late 2007, British fans of milk and cheese got some bad news: their supermarkets and milk suppliers had been illegally rigging the prices of dairy products since 2002. The Office of Fair Trade learned that many of the U.K.'s largest supermarket chains had been colluding to raise the prices of dairy products, and their milk distributors, namely Dairy Crest and Robert Wiseman Dairies, had been the go-betweens for the ostensibly secret pricing decisions.

The anti-competitive behavior supposedly cost customers close to 270 million pounds over the course of the scam, and the companies involved faced fines that maxed out at a combined 116 million pounds.

4. Flat Glass Gets a Flat Price

In 2007, the European Commission undermined a price-fixing scheme among the makers of flat glass, the variety that is used to make windows, doors and mirrors. In 2004 and 2005, four major makers of flat glass—Asahi, Guardian, Pilkington, and Saint-Gobain—secretly met to discuss artificially raising their prices.

As a result, the 1.7-billion-euro flat glass industry got a nice little bump in its revenues, or at least it did until the European Commission got to the bottom of the strange pricing. The Commission didn't take it easy on the offending parties, either. It fined the four companies a total of nearly 487 million euros for violating the ban on cartel behavior and price fixing.

5. British Airways Gives Fuel Prices a Hike

baRemember the soaring fuel prices that gripped the travel industry a few years ago? British Airways found a less-than-scrupulous way for the rising prices to help pad its bottom line. When airlines started tacking fuel surcharges onto passengers' flight costs, someone at BA apparently saw a way to make some quick cash.


In 2004, the airline entered into secret talks with its rival Virgin Atlantic to simultaneously bump up their fuel surcharges, a practice that continued into 2006. Over the course of the collusion, fuel surcharges rose from an average of five pounds a ticket to over 60 pounds a fare.

When Virgin Atlantic's lawyers realized what the company had done, they did the only thing they could do: they ratted out British Airways. Virgin ended up getting immunity for providing the goods on its former partner in collusion, while BA got walloped with record fines. The British Office of Fair Trading nailed the airline for 121.5 million pounds, while the American Department of Justice smacked it with an additional $300 million fine. Ouch.

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Supermarket Introduces 'Quiet Hour' to Help Customers With Autism Feel at Ease
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For some people on the autism spectrum, a routine trip to the supermarket can quickly morph into a nightmare. It’s not just the crowds and commotion that trigger feelings of panic—sounds that many shoppers have learned to tune out, like intercom announcements or beeps from the checkout scanner, can all add up to cause sensory overload. But grocery stores don’t have to be a source of dread for people with such sensitivities. By turning down the volume for one hour each day, one supermarket is making itself more inclusive to a greater number of customers.

As Mashable reports, Australian grocery store chain Coles is partnering with the Autism Spectrum Australia (Aspect) organization to roll out "quiet hour" in two of its stores. From 10:30 to 11:30 a.m., the lights will be dimmed by 50 percent, the radio and register sounds will be turned down to their lowest volumes, and cart collection and non-emergency PA announcements will be put on hold. The changes are meant to accommodate shoppers with autism and their families, but all shoppers are welcome.

The initiative is based on research conducted by Aspect on people on the autism spectrum and those who care for them. In addition to modifying the atmosphere, Coles has taken steps to educate its staff. If someone does start to feel overwhelmed in a Coles stores, employees trained in understanding and dealing with autism symptoms will be on hand to assist them.

Coles is following the lead of several chains that have made themselves more inviting to shoppers on the spectrum. Last year, British supermarket chain Asda introduced its own quiet hour, and Toys "R" US implemented something similar in its UK stores for the holiday season.

The Coles initiative is just a trial run for now, but if the customer reaction is positive enough it may be here to stay. Visitors to their Ringwood and Balwyn East stores in Victoria will have a chance to experience it now through the end of October.

[h/t Mashable]

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10 of the Worst Jobs in the Victorian Era
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Next time you complain about your boring desk job, think back to Victorian times—an era before the concept of occupational health and safety rules—and count yourself lucky. Back then, people were forced to think of some imaginative ways to earn a living, from seeking out treasure in the sewers to literally selling excrement.

1. LEECH COLLECTOR

Leeches were once a useful commodity, with both doctors and quacks using the blood-sucking creatures to treat a number of ailments, ranging from headaches to "hysteria." But pity the poor leech collector who had to use themselves as a human trap. The job usually fell to poor country women, who would wade into dirty ponds in the hope of attracting a host of leeches. Once the critters attached to the leech collector’s legs, the individual would prise them off and collect them in a box or pot. Leeches can survive for up to a year with no food, so they could be stored at the pharmacy to be dished out as required. Unsurprisingly, leech collectors were in danger of suffering from excess blood loss and infectious diseases.

2. PURE FINDER

Despite the clean-sounding name, this job actually involved collecting dog feces from the streets of London to sell to tanners, who used it in the leather-making process. Dog poop was known as "pure" because it was used to purify the leather and make it more flexible [PDF]. Leather was in great demand in Victorian times, as it was used not only as tack for horses but for shoes, boots, bags, and in bookbinding. Pure collectors haunted the streets where stray dogs amassed, scooping up the poop and keeping it in a covered bucket before selling it on to the tanners. Some collectors wore a black glove to protect their scooping hand, but others considered it harder to keep a glove clean than a hand and eschewed the protection altogether.

3. TOSHER

A Victorian illustration of a tosher, or sewer collector
An 1851 illustration of a sewer-hunter or "tosher."
Wikimedia // Public Domain

Victorian London had a huge network of over-worked sewers under the city, washing away the effluence of the crowded metropolis. Toshers made their living down in the dark sewers, sifting through raw sewage to find any valuables that had fallen down the drain. It was extremely dangerous work: Noxious fumes formed deadly pockets, the tunnels frequently crumbled, there were swarms of rats, and at any moment the sluices might be opened and a tide of filthy water might wash the toshers away. As a result of these dangers, toshers generally worked in groups, instantly recognizable in their canvas trousers, aprons with many large pockets (in which to stash their booty), and lanterns strapped to their chests. Most toshers also carried a long pole with a hoe at the end to investigate piles of human waste for dropped treasures, or with which to steady themselves if they stumbled in the gloom. After 1840 it became illegal to enter the sewers without permission and so toshers began working late at night or early in the morning to avoid detection. Despite the stinking and dangerous conditions, it was a lucrative business for the working classes, with many a coin or silver spoon sloshing about in the quagmire.

4. MATCHSTICK MAKERS

Matchsticks are made by cutting wood into thin sticks and then dipping the ends into white phosphorus—a highly toxic chemical. In the Victorian era, this work was mainly performed by teenage girls who worked in terrible conditions, often for between 12 and 16 hours a day with few breaks. The girls were forced to eat at their work stations, meaning the toxic phosphorus got into their food, leading to some developing the dreadful condition known as “phossy jaw”—whereby the jawbone becomes infected, leading to severe disfigurement.

5. MUDLARK

Like the toshers, these workers made their meagre money from dredging through the gloop looking for items of value to sell, although in this case they were plying their messy trade on the shores of the Thames instead of mostly in the sewers. Seen as a step down from a tosher, the mudlarks were usually children, who collected anything that could be sold, including rags (for making paper), driftwood (dried out for firewood) and any coins or treasure that might find its way into the river. Not only was it a filthy job, but it was also very dangerous, since the tidal nature of the Thames meant it was easy for children to be washed away or become stuck in the soft mud.

6. CHIMNEY SWEEP

A photograph of a very happy chimney sweep
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Tiny children as young as four years old were employed as chimney sweeps, their small stature making them the perfect size to scale up the brick chimneys. All the climbing in the claustrophobic space of a chimney meant many sweeps’ elbows and knees were scraped raw, until repeated climbing covered them with calluses. Inhaling the dust and smoke from chimneys meant many chimney sweeps suffered irreversible lung damage. Smaller sweeps were the most sought-after, so many were deliberately underfed to stunt their growth and most had outgrown the profession by the age of 10. Some poor children became stuck in the chimneys or were unwilling to make the climb, and anecdotal evidence suggests their bosses might light a fire underneath to inspire the poor mite to find their way out at the top of the chimney. Fortunately, an 1840 law made it illegal for anyone under the age of 21 to climb and clean a chimney, though some unscrupulous fellows still continued the practice.

7. FUNERAL MUTE

Anyone familiar with Charles Dickens’s Oliver Twist will remember that one of the orphan’s hated early jobs was as a mute for undertaker Mr. Sowerberry. A component of the extremely complex (and lucrative) Victorian funeral practices, mutes were required to dress all in black with a sash (usually also black, but white for children), while carrying a long cloth-covered stick and standing mournfully and silently at the door of the deceased’s house before leading the coffin on its processional route to the graveyard.

8. RAT CATCHER

An illustration of a group of Victorian men watching rat-baiting.
Getty Images/Rischgitz

Rat catchers usually employed a small dog or ferret to search out the rats that infested the streets and houses of Victorian Britain. They frequently caught the rats alive, as they could sell the animal to “ratters,” who put the rats into a pit and set a terrier loose upon them while onlookers made bets about how long it would take for the dog to kill them all. Catching rats was a dangerous business—not only did the vermin harbor disease, but their bites could cause terrible infections. One of the most famous Victorian rat catchers was Jack Black, who worked for Queen Victoria herself. Black was interviewed for Henry Mayhew’s seminal tome on Britain’s working classes, London Labour and the London Poor (1851) in which he revealed that he used a cage which could store up to 1000 live rats at a time. The rats could be stored like this for days as long as Black fed them—if he forgot, the rats would begin fighting and eating each other, ruining his spoils.

9. CROSSING SWEEPER

The “job” of crossing sweeper reveals the entrepreneurial spirit of the Victorian poor. These children would claim an area of the street as their patch, and when a rich man or woman wished to exit their carriage and walk across the filth-strewn street, the sweeper would walk before them clearing the detritus from their path, ensuring their patron’s clothes and shoes stayed clean. Crossing sweepers were regarded as just a step up from beggars, and worked in the hopes of receiving a tip. Their services were no doubt sometimes appreciated: The streets during this period were mud-soaked and piled with horse manure. The poor sweepers not only had to endure the dismal conditions whatever the weather, but were also constantly dodging speeding horse-drawn cabs and omnibuses.

10. RESURRECTIONISTS

An 1840 drawing of a group of resurrectionists at work
Getty Images/Hulton Archive

In the early 19th century the only cadavers available to medical schools and anatomists were those of criminals who had been sentenced to death, leading to a severe shortage of bodies to dissect. Medical schools paid a handsome fee to those delivering a body in good condition, and as a result many wily Victorians saw an opportunity to make some money by robbing recently dug graves. The problem became so severe that family members took to guarding the graves of the recently deceased to prevent the resurrectionists sneaking in and unearthing their dearly departed.

The "profession" was taken to an extreme by William Burke and William Hare who were thought to have murdered 16 unfortunates between 1827 and 1828. The pair enticed victims to their boarding house, plied them with alcohol and then suffocated them, ensuring the body stayed in good enough condition to earn the fee paid by Edinburgh University medical school for corpses. After the crimes of Burke and Hare were discovered, the Anatomy Act of 1832 finally helped bring an end to the grisly resurrectionist trade by giving doctors and anatomists greater access to cadavers and allowing people to leave their bodies to medical science.

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