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Automotive suppliers facing business litigation for price fixing

A number of major car supply companies working in Detroit, Michigan, have been accused of price fixing. This is the process of artificially setting prices so that they cost more than they actually should on an open market, and the cost is usually picked up by the consumer. In the case of car parts, the consumer may have no choice but to buy the part in order to have the car repaired at all, so people have the right to deal with parts that are competitively priced -- just like any other product in the current market. When prices are fixed, it causes the consumer to pay more than they are worth.

It is worth noting that this business litigation also takes into account parts that were purchased when making new cars and parts that were bought by insurance companies, rather than just individuals. The insurance costs still could push up the costs for consumers who then have to pay higher rates depending on what the insurance company paid out. They also could have paid some of the money through their deductible.

All told, there are 14 defendants in the case, and they are looking at just over $1 billion in damages. Looking at the list of companies shows that this case includes rubber parts and electronic instruments, so it is not limited to simply the frame and other main components of the vehicle. The money has to be paid back to consumers and car dealerships that were taken advantage of through the price fixing scheme.

Also included in the case are charges of collusion. This means that the various companies acted together to raise the prices, rather than competing with each other and offering the best prices to consumers. Through collusion, these companies acted as one and looked out for only their own interests.

Business litigation cases are often complex and involve more than just two companies. Understanding the risks to a company's involved in such litigation and how to best protect a company's interests are what Michigan business and commercial law attorneys know best.

Source: Crain's Detroit Business, "Supplier price fixing" No author given, Feb. 23, 2014

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