Collusion Scandal Grips Rug Accessory Industry

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We’d like to think that only huge corporations — titans of telecom, colossi of crude, barons of beef — run by guys who look like Rich Uncle Pennybags are involved in sketchy backroom collusion. But even players in “I didn’t know they even existed” markets try to get overly clever and rig the system to their advantage.

Take, for example, the U.S. rug accessory industry — something you probably had never considered, but which is nevertheless real.

According to a complaint [PDF] filed by the Federal Trade Commission, Step N Grip LLC — the makers of a rug accessory called NeverCurl — has been trying to talk a competitor (yes, it has one) into fixing prices.

Starting on June 1, 2015, Step N Grip and the unnamed “Competitor A” engaged in a very brief price war, with Competitor A lower its price from $16.99 to $13.49 to undercut NeverCurl, which dropped its price to $12.99, and so on.

This went on for a week, at which point someone from Step N Grip sent off a one-sentence email to Competitor A, reading, “We both sell at $12.95? Or, $11.95?”

Competitor A didn’t take the bait and reported this invitation to collude to the FTC.

Today, the agency announced that it reached a deal with Step N Grip, in which the company agreed to stop communicating with its competitors about prices, and is barred from entering into, participating in, inviting, or soliciting an agreement with any competitor to divide markets, to allocate customers, or to fix prices; all of which is against the law to begin with. It’s also a no-no for Step N Grip to — as it allegedly did in the Competitor A case — urge a competitor to raise, fix, or maintain its price or rate levels.

No, this isn’t earth-shattering, but it does show that this sort of bad behavior takes place at even the smallest, arguably frivolous levels of commerce.

by Chris Morran via Consumerist