The leading supplier of wood products used to construct frames for artists' canvases has agreed to settle Federal Trade Commission charges that it attempted to fix prices and restrain trade in the market for these products, known as stretcher bars. Under the order, Precision Moulding, based in Cottonwood, California, will be barred from any acts to induce competitors to conspire with them to fix or raise prices. This is the second FTC case involving alleged pricing practices announced this week. In the other case, the FTC announced that New Balance Athletic Shoe, Inc., agreed to settle charges that it fixed resale prices of its shoes in violation of antitrust laws, thereby raising prices for consumers.
Price fixing is a way to pick consumers' pockets.
According to the FTC complaint detailing the charges, Precision was planning to raise its prices when it learned that a new competitor in the field was offering stretcher bars to art supply stores at prices lower than Precision's. The President and General Manager flew from California, where Precision is located, to the east coast to visit the headquarters of their competitor. The Precision representatives allegedly invited the competitor to fix prices. When the competitor refused to engage in a price-fixing discussion, the Precision officer threatened a price war saying that the competitor would not survive, the complaint alleges. The invitation by Precision to its competitor to raise prices, if accepted, would constitute an agreement to restrain trade in violation of federal law, according to the FTC complaint.