Conscious Parallelism

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Conscious parallelism refers to businesses changing their prices to reflect the prices of competitors within a market without colluding or communicating with competitors. Unlike price-fixing which involves conscious agreement between competitors and violating antitrust laws, conscious parallelism occurs where businesses just change prices in reaction to competitors, and conscious parallelism does not constitute illegal activity on its own. Businesses in very competitive markets such as airlines do this almost out of necessity in order to stay profitable. However, critics point out that this activity can cause the same harmful effects that outright price-fixing creates. While conscious parallelism does not constitute an antitrust violation on its own, other evidence in combination with conscious parallelism can lead to a charge of collusion. An example of conscious parallelism would be all shipping companies increasing their package rates by 15% after the U.S. Postal Service does so without ever speaking with employees of the Postal Service. 

[Last updated in June of 2021 by the Wex Definitions Team]