Saturday, May 24, 2003

Antitrust News: IUPUI's Confession

The over-named Indiana University-Purdue University Indianapolis managed to earn itself a place in antitrust lore by turning itself in for "price-fixing":

IUPUI has agreed to refund about $500,000 to more than 46,000 current and former students to avoid prosecution for alleged price-fixing at its bookstores.

"To learn that such activity might have occurred is unacceptable, and we are implementing a restitution plan immediately," Cheryl Sullivan, vice chancellor of external affairs for the campus in downtown Indianapolis, told the Indianapolis Star for a story Friday.

The alleged price fixing between IUPUI's bookstores and an unidentified bookstore covered an 18-month period that ended in December.

Officials at IUPUI discovered the possible price fixing during a routine audit in November and reported it to the U.S. Justice Department's Antitrust Division later that month, said Susan Rivas, an attorney for the Indianapolis law firm Ice Miller.

The Justice Department granted IUPUI conditional amnesty under a program that allows businesses and organizations that report antitrust activity and cooperate with the government's investigation to avoid fines or prosecution, Rivas said.

The bookstores allegedly eliminated a 10 percent discount on new health sciences textbooks and imposed a 2 percent price increase on all new textbooks.

Under the restitution plan, students enrolled in classes anytime from July 2001 through December 2002 will receive an average of less than $5 in credit or refunds. Some students will get as little as 24 cents; two will get the highest payment, $170.

And I think we call all breath a sigh of relief now that those students are getting their $5 back. Of course, it would have been interesting to see whether the DOJ would have actually pursued the matter, given that it amounted to a $5 per student "injury."

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