Strategic Use of Public Price Indexes as a Collusive Device

While public price indexes are widely used for the purpose of increasing market efficiency through information transmission, they can also be used strategically with an anti-competitive purpose. The mechanisms vary, such as submitting false price reports, targeting a segment of the market that influences the index, or designing the price index to ease manipulation. A price index can be particularly vulnerable to potential anti-competitive actions when long-term contracts are pegged to the index,