Conscious Parallelism Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Conscious Parallelism, written in plain English, along with examples of how it is used.

What is Conscious Parallelism?

History and Meaning of Conscious Parallelism

Conscious parallelism refers to the actions taken by companies competing in a market to follow each other's pricing and business strategies without explicit communication or agreements. The term emerged in the mid-twentieth century as a way for companies to coordinate their actions while technically avoiding antitrust scrutiny. Essentially, conscious parallelism is a form of price fixing that is illegal under U.S. antitrust laws, as the mutual understanding between competitors not to undercut each other can lead to higher prices for consumers.

Examples of Conscious Parallelism

1. In the 1990s, major airlines faced accusations of conscious parallelism when they implemented similar fuel surcharges without any apparent communication or coordination.

2. In the 1980s, grocery stores in a particular region were accused of conscious parallelism when they all increased their prices on certain essential goods at the same time.

3. In 2017, a group of pharmaceutical companies was sued for conscious parallelism after they all raised the prices of generic drugs in a coordinated manner.

Legal Terms Similar to Conscious Parallelism

1. Collusion - secret or illegal cooperation or conspiracy, especially in order to cheat or deceive others.

2. Price fixing – an agreement between parties to set prices at a certain level, typically to maintain profits or control the market.

3. Cartel - a group of manufacturers or suppliers who work together to maintain a high price and restrict competition.