In April 2011, Procter & Gamble and Unilever Received Fines

question 155

Multiple Choice

In April 2011, Procter & Gamble and Unilever received fines of 315 million euros by the European Commission for fixing the price of laundry detergent in eight European countries. They admitted to this cartel, which resulted in a 10 percent discount in the fines. The 3-year investigation started because of a tip-off by another competitor, Henkel, who was also part of the price-fixing scheme. Henkel received no fine because of its cooperation with investigators. Besides the fines, how did investigators make maintaining this cartel difficult to continue?

• A) by offering a 10 percent discount on the fine if the parties admit to wrongdoing
• B) by investigating the cartel for 3 years so they could prosecute
• C) by reminding consumers that laundry detergent has a lot of long-run substitutes
• D) by waiving the fine for just Henkel, which encouraged Henkel to cheat

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Definitions:

Conforming Goods

Merchandise or products that meet the specifications and standards outlined in a purchase contract.

Acceptance

A promise or act on the part of an offeree indicating a willingness to be bound by the terms and conditions contained in an offer. Also, the acknowledgment of the drawee that binds the drawee to the terms of a draft.

Purchase Order

A document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services.

Title

Legal ownership of property, evidenced by a document or record.