Price Fixing

1. 0 Introduction Price fixing is a practicing on price for the products and services which there are a group of same line business work together in order to manipulated market by setting a high price on the products and services rather than allowing the price to flow naturally for benefit themselves. [1] Price fixing of products and services is illegal in most of the countries and some countries come with serious legal consequences. Price fixing is normally having two or more companies meet and decide to offer the product and service at the same price by creating high price which consumers are forced to pay for lack of choices. Ghillyer. W, 2010) If two companies selling products and services at the same price this would not be illegal however when someone able to proved that there is collusion between companies price fixing would be stated. 2. 0 Case Studies 2. 1 Malaysia Government Price Fixing Case Asian rice stocks has already near to the danger level which the world grain stocks have also fall until half since 1999 from a big enough provender to feed worldwide for 116 days to a predicted only 57 days by year end. 2] Malaysia had also fall into the hole of panic on rice supply last year when faces serious price escalation for the imported rice as well as shortage for imported rice due to the major rice suppliers in Malaysia such as Thailand, India, Vietnam and China has imposition of restrict on the exportation of rice. Even though Malaysia also a country that has produces rice however it is totally not enough to meet Malaysian annually consume almost 2. million tons of rice of which some 657,900 tons of rice are imported from others countries. In May of 2008, Malaysia government has set up several response measures to control the prices of rice also to ensure sufficient supply which included 15 percent of Super Tempatan rice as a controlled item with price ranging from RM 1. 65 to RM 1. 80 per kilogram according to zones. Government also fixing the ceiling price for the 5 percent and 10 percent Super Special Tempatan at RM 2. 80 per kilogram and RM 2. 0 per kilogram. 2. 1. 1 The Reason Of Malaysia Government Practice Price Fixing In May of 2008, the fifth Prime Minister Datuk Seri Abdullah Ahmad Badawi in Malaysia had announce that government fixing the prices of rice in order to ensure that supply of the rice are enough to meet Malaysian demands also to prevent the price of the rice will rising followed a substantially increase in prices in the market over the last month especially Sabah and Sarawak that depending the import rice to meet consumer need and want.

Moreover, fixing the price of rice has enable consumer to purchase the rice at a more reasonable price at the same time government may able to control the quality of rice that sold to the consumer as well. 2. 1. 2 The Punishment Of Government Practice Price Fixing There is no any punishment on the Malaysia government for fixing the price of rice for the reason of practicing price fixing in here does not involving any profit or illegal issue but is to ensure that Malaysian are able to purchases rice on a more reasonable price as well as maintain the quality of rice.

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This action may also to prevent Malaysian drop into a panic hole for purchasing rice with serious price escalation. 2. 2 Malaysia Airline Price Fixing Case In February of 2010 Malaysia Airline System Berhad(MAS) has announced to been involved in accusation of price fixing on air transport services and related surcharges. Malaysia Airline System Berhad stated that the accused has been submitted to United States District Court for Eastern District of New York by freight forwarder Benchmark Export Services.

Malaysia Airline System Berhad was the thirteenth airline that had been accused by Australian Competition and Consumer Commission (ACCC) for involving in price fixing of air cargo industry. [3] The ACCC stated that between 2001 until 2006 Malaysian Airline System Berhad has work together with other international operator in order to fix the price of fuel surcharge and security surcharge applied to air cargo. 2. 2. 1 The Reason Of Malaysia Airline Practice Price Fixing

The main reason that Malaysia Airline System Berhad willing to involve in price fixing even fixing the price for fuel surcharge and air cargo is illegal in most of the countries is because Malaysia Airline System Berhad want to make a large amount of profit compare to others competitor in Malaysia. Besides Malaysia Airline System Berhad also hope to increase customer based by charged customer a high price but provided a better services compare to others competitors in Malaysia as this Malaysia Airline System Berhad may able to gain more customer loyalty also expand the target market as well. . 2. 2 The Punishment Of Malaysia Airline Practice Price Fixing The ACCC may penalty those company who involve in fixing the price of cargo up to 10 percent of companies sales for counter the rules however penalty are rarely to reach that level. As a result, after finish the proceedings against others airlines there are a total of $41 million penalties. On the others hand, management from Malaysia Airline System Berhad state that there did not have any infringement take place until this moment and the accused did not mention about the compensation for the damages from national carrier.

Malaysia Airline System Berhad is now taking legal advice that related to the accused. 2. 3 Singapore Bus Price Fixing Case In July of 2009 sixteen express bus operators that playing between Singapore and Malaysia had been penalty by Competition Commission of Singapore (CSS) for fixing the price of bus ticket to Malaysia. The Competition Commission had decided to proposed infringement to sixteen of the operators also the Express Bus Agencies Association as well.

The report has stated that the companies who fixing the price of express travel ticket for a round trip of various destinations in Malaysia has been started since 2006 to 2008. Between three year times Express Bus Agencies Association has fixed the price of coach above the minimum selling price also collect the fees of fuel and insurance across the board in order to increase the price of ticket. Competition Commission of Singapore estimate that the coach operators has pocketed over S$3. 65 million from the fuel and insurance charges. 2. 3. The Reason Of Singapore Bus Practice Price Fixing Express Bus Agencies Association has pointed out that price fixing on bus ticket does not bring much profit to for the reason of the surcharges of the bus ticket to Malaysia is mostly used to covered back the higher fuel price. Moreover the business of express bus has been affected serious by the budget airlines and H1N1 thus fixing the higher price of bus ticket to gain profit is only hope to help the member of Express Bus Agencies Association to reduce the cost as well. 2. 3. 2 The Punishment of Singapore Bus Practice Price Fixing

As a punishment for fixing the price of bus ticket to Malaysia the Express Buss Agencies Association is penalty by Competition Commission of Singapore a total of S$1. 75 million and Transfer Travel is getting the heaviest penalty of S$518,167. As this the executive director of Transfer Travel stated that they will urge with the Competition Commission of Singapore to reconsider about the amount of penalty for the reason of the amount are really too excessive also might causes Transfer Travel in a serious damage as well as facing very intense competition from the various budget carries. . 4 Samsung Price Fixing Case Starting on the day of 18 march 2011 public might get updated from the news which Samsung SDI has consent to plead guilty and will pay a total of $32 million penalty because involve themselves in a conspiracy to fixing the price of color tubes that mostly used in computer monitors. [4] Samsung SDI which means for Samsung Display Interface has already admit for taking part in price fixing, reduce the production and allocate market share for cathode display tubes(CDT) to be sold worldwide.

The United State Justice Department has state that the manufacturer has been meeting up with few unnamed conspirators at South Korea, some Asia countries and other places in order to discuss about the detail which take places in price fixing of cathode display tubes (CDT). In the process of discussing Samsung SDI and few unnamed conspirators are consent to reduce cathode display tube production by closing the production lines together for certain periods also exchanging information for setting the price as well.

In additional, Samsung SDI was founded which participated in a huge conspiracy that happen from 1997 until 2006 and the Justice Department stated there are six people who has involve in the case have already been indicted in past two years. Moreover, there are twenty two executives and eight companies which include firms from Japan, South Korea and Taiwan have been charged in that ongoing investigation. Some of companies who have pleaded guilty also agree to pay a total which more than $890 million. 2. 4. The Reason OF Samsung Practice Price Fixing Reportedly the main reason that Samsung SDI involving themselves in price fixing disputes related to color tubes even though has knowledge on price fixing is illegal in most of the countries are because Samsung SDI hope to suppress and eliminating competition by working together with competitors. Moreover, Samsung SDI and few accomplices company might able to make a large amount of profit and help in gaining market share as well. 2. 4. 2 The Punishment Of Samsung Practice Price Fixing

As a part of plea agreement Samsung SDI has agree to cooperate with Justice Department for ongoing cathode ray tubes(CRT) investigation and Samsung has been charged with violating the Sherman Antitrust Act. As a result Samsung SDI now has to pay a total of $32 million penalty for the consideration. Question 2 3. 0 Definition Of Whistleblower Whistleblower defined as a person who working under an organization and have the courage to reports any bad things that done by employer or organization. 5] Whenever there are any illegal activities, mismanagement, corruption that takes places in the organization whistleblower may bring such wrongdoings to light in order to exposure to public also hope to stop the organization. Inevitably the person who wanted to be whistleblower must prepared to receive the revenge from employer and in normally case employer will fired the whistleblower or even blacklisted whistleblower to others multinational corporation. Therefore most of the whistleblower may not have fixed employment which they able to quit at any time also employer have the right to fire them without any reason.

Moreover, now legislatures and courts have already created whistleblower protection for the purpose to protect people who have the sense of justice to report any wrongdoings either by the general public or even person who in the authoritative status. Whistleblower is now protected by regulations and can thus elimination any discrimination that others employee might show him in blamed face. 4. 0 Case Studies 4. 1 Marta Andreasen And European Commission Case The vice president of European Commission Neil Kinnock has been accused by a histleblower who discloses that the accounting practices of European Commission are a large scale fraud. [6] The predecessor chief accountant of European Commission Marta Andreasen is founded the accounts of European Commission are very confused since she started her job at European Commission in January of 2002. Marta Andreasen has attended a press conference stated that European Commission does not follow the standard of accounting principles and the right amounts that has already paid is unable to check whether being paid to right person for the reason of European Commission has never register for all the transactions.

As a chief accountant she has to be responsible for the missing of money however started from the first week she is in the job she is asked to sign off all the payments and accounts. As to prevent to be cheated she requests her bosses to reform the system immediately but has been refused thus she decide to sign all the payments for desperation. The same situation has continuous for two months which every time Marta Andreasen request for changes are being refused.

Lastly, Marta Andreasen told her bosses that she will not sign on certain payments unless reforms have being approved for stop to going against the ethics of her profession. Instead of supporting Marta Andreasen has been threatened with fired by removing from her post and move to a new office without any new duties. Marta Andreasen is already lost her job also she has started to criticized by unidentified sources in the press therefore she trying to ask for protection from European Commission but it is useless and lastly she has be subjected to disciplinary action.

In this case, Marta Andreasen having the characteristic of honest which she has the courage to bring the case into light by attended a press conference and stated out all the truth about the wrongdoings of the European Commission for having a large scale fraud on accounting practice. Furthermore, Marta Andreasen also brave to face the critical which she lost her job after she told her bosses that she will not sign any payment that she feel that going against with her ethics profession.

After this she has also started to be criticized by unidentified sources in the press. Marta Andreasen refused to sign the payment and keep on to request her bosses to reform the system of account in order to protect herself from cheated may shows that she is an independent decision maker. Marta Andreasen is commitment to customer and public which she voice out that corruption and abuse of public funds are run wild within European Commission. 4. 2 Jonathan Fishbein And National Institutes of Health Case

United State National Institutes of Health (NIH) AIDS research agency has being stated as a troubled organization which the managers involve in unnecessary disputes, sexual languages and others misconduct that obstructs against the disease. Reinstated medical safety expert of National Institutes of Health Doctor Jonathan Fishbein has raising the accused of scientific misconduct and sexual harassment in National Institutes of Health AIDS research moreover the agency also being in the suffer condition for competing between physicians and PhD scientists for long time.

Doctor Jonathan Fishbein has being fired for the reason of poor performance after he pay close attention on the several studies and filed a formal accused against one of the agency managers for sexual harassment and hostile at the workplace. [7] Even though Doctor Jonathan Fishbein are hired by National Institutes of Health in 2003 to help in improve the safety of AIDS research and has been recommended for cash performance bonus few weeks before he being fired however he unable to escape from punishment for being whistleblower.

An administrative law judge preliminary ruling that Doctor Jonathan Fishbein has no whistleblower protection for the reason of he was hired outside the civil service system as special employees at higher salary. In this case, Doctor Jonathan Fishbein can be say that having the characteristic of brave and honest for voice out the misconduct of National Institutes of Health AIDS research agency honestly to the public without worries about to his future for he will mostly lose his job and reputation to be a doctor.

Besides, Doctor Jonathan Fishbein also a independent decision maker which he able to make a exactly decision to filed a formal accused against a senior manager for sexual harassment of subordinates. 5. 0 Conclusion Whistleblower protection act has been created in order to protect whistleblowers for public interest also to encourage people to voice out of there are any misconduct or wrongdoing in their working place by following the correct processes. Under the whistleblower protection act employee might be able to protect from being fired without a reasonable reason or even deducted salary by organization for being whistleblower. Raymond. J, 2009) Besides, organization must avoid harassments and provided a healthy and safety working place for employees as well. 6. 0 References 1. Amadeo. K, n. d, Price Fixing, [online] Available: http://useconomy. about. com/od/glossary/g/price_fixing. htm [Accessed on 5/4/2011] 2. Bainbridge. R, n. d, Whistleblower Definition, [online] Available: http://ezinearticles. com/? Whistleblower-Definition&id=410263 [Accessed on 5/4/2011] 3. Danny, n. d, MAS Faces Price Fixing Allegations in US Court, [online] Available:http://biz. thestar. com. my/news/story. asp? ile=/2010/2/19/business/5703604&sec=business [Accessed on 5/4/2011] 4. Ghillyer. W, 2010, Business Ethics A Real World Approach, International Edition, McGraw Hill 5. Joshua, 04Nov10, How Rice is So Expensive at More Than RM3. 60 per Kilogram, [online] Available: http://www. sabahforum. com/forum/the-food-channel/topic23369. html [Accessed on 5/4/2011] 6. Meier. B, 25Oct07, Whistle-Blower Finds a Finger Pointing Back, [online] Available: http://www. nytimes. com/2007/10/25/business/25whistle. html? _r=1 [Accessed on 5/4/2011] 7. Nystedt. D, 01Dec05, Samsung Price Fixing Case Settled, [online] Available: http://news. echworld. com/storage/4901/samsung-price-fixing-case-settled/ [Accessed on 5/4/2011] 8. Raymond. J, 2009, Ethics and The Conduct of Business, 6th Edition, Pearson Prentice Hall 9. Smith. S, n. d, What is Price Fixing, [online] Available: http://www. wisegeek. com/what-is-price-fixing. htm [Accessed on 5/4/2011] 10. Solomon. J, 03July05, NIH Report: Fishbein Vindicated, [online] Available: http://forums. questioningaids. com/showthread. php? t=2904 [Accessed on5/4/2011] 7. 0 Bibliography 1. Bernama, 31May2008, Colored Stickers to Identify Rice Grades, [online] Available: http://www. themalaysianinsider. om/malaysia/article/Coloured-stickers-to-identity-rice-grades/ [Accessed on 5/4/2011] 2. Hafizbam, 2009, 16 Operators Colluded to Set Minimum Prices for Tickets, The Straits Times, pg. A3 3. Kelly. J, 30Dec02, The Year of the Whistle-Blowers, [online] Available: http://www. time. com/time/magazine/article/0,9171,1003967,00. html [Accessed on 5/4/2011] 4. Shah. A, n. d , Samsung SDI to Pay Fine for Price Fixing in CRT Case, [online] Available:http://www. cio. com/article/677567/Samsung_SDI_to_Pay_Fine_for_Price_Fixing_in_CRT_Case [Accessed on 5/4/2011] 5. Webb. S, n. d, Price Fixing, [online] Available: http://american-business. rg/2667-price-fixing. html [Accessed on 5/4/2011] 8. 0 Appendices Appendix 1 [pic] Price of Rice Stabilizing Source: http://kpdnkk. bernama. com/news. php? id=332757& Appendix 2 [pic] Australia Accuses Malaysia Airlines over Cargo Price fixing Source:http://www. thefreelibrary. com/Australia+accuses+Malaysia+Airlines+over+cargo+price-fixing-a01612192514 Appendix 3 [pic] 16 Bus Operators Fined For Alleged Price Fixing on Express Fares to Malaysia Sources: http://politics. sgforums. com/forums/3317/topics/370467? page=1 Appendix 4 [pic] Samsung SDI to Pay Fine for Price Fixing in CRT Case Source:http://www. tnews. com/displays/30008/samsung-sdi-pay-fine-price-fixing-crt-case ———————– [1] http://useconomy. about. com/od/glossary/g/price_fixing. htm [2] http://www. sabahforum. com/forum/the-food-channel/topic23369. html [3] http://biz. thestar. com. my/news/story. asp? file=/2010/2/19/business/5703604&sec=business [4] http://news. techworld. com/storage/4901/samsung-price-fixing-case-settled/ [5] http://ezinearticles. com/? Whistleblower-Definition&id=410263 [6] http://www. nytimes. com/2007/10/25/business/25whistle. html? _r=1 [7] http://forums. questioningaids. com/showthread. php? t=2904

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