Bad press for Auschwitz price fixing

by on January 19, 2016 at 3:55 pm in Current Affairs, Economics, History, Law | Permalink

Now, the Israel Antitrust Authority has announced that nine tour operator executives have been arrested on suspicion of running a secret price-fixing ring that was aimed at artificially inflating the cost of trips to former Nazi death camps such as Auschwitz.

At least six tour operators are being investigated on suspicion of involvement in the alleged cartel. In some cases, the homes of company executives were searched and property confiscated. According to the publication Haaretz, one of those detained is also suspected of bribery.

…The Israeli government had given a number of tour operators the tenders for the business of flying high school students to Poland. In theory, these companies would be in competition: The schools were supposed to negotiate among the companies to find the best deal. The investigation found that in practice, however, the prices appeared to be fixed among the companies. Although the operators appeared to offer discounts to schools, investigators say, these discounts were secretly coordinated and there was no real competition.

That is from Adam Taylor, via Otis Reid.

1 chuck martel January 19, 2016 at 4:10 pm

“Adam Smith wrote in 1776 in The Wealth of Nations, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices”.

2 Jan January 19, 2016 at 4:25 pm

Those schools were dealt an invisible hand.

3 Barlow January 19, 2016 at 5:07 pm

The Caveat Emptor issue faced by the Israeli Government school procurement is hardly unusual or difficult. But a lot more politics in this story than indicated.
(would be helpful if the reference was in english language)

Travel services to Germany are commonplace from many providers internationally — surely that Israeli school procurement office could readily price their general travel-services requirements … and readily detect if the “selected” Israeli providers were overpriced or suspiciously uniform with each other on pricing.

Sounds like some local inside deal where politically connected Israeli travel firms got special treatment for travel contract awards. Somebody blew the whistle– and the previous political connections were inadequate to fend off the AntiTrust police.

Cartels are notoriously difficult to sustain (without government protection), especially small ones. Outside competition has strong incentive to enter and underprice the cartel members. Also strong incentive for a cartel member(s) to defect and reap higher individual profits.

4 hey now January 20, 2016 at 4:07 am

Auschwitz is in Poland.

5 Jan January 19, 2016 at 4:22 pm

File under: animal spirits.

6 David January 19, 2016 at 5:23 pm

Oy!

7 DFG January 19, 2016 at 5:51 pm

Steve Sailed will have a fie!d day will this.

8 DFG January 19, 2016 at 5:51 pm

*Sailer

9 ibaien January 19, 2016 at 6:11 pm

and yet, their grandparents got to go for free.

10 gab January 19, 2016 at 6:33 pm

That is sickeningly funny.

11 dearieme January 19, 2016 at 6:39 pm

The whole story is sickeningly funny.

12 dan1111 January 20, 2016 at 3:16 am

Not funny. Just sickening.

13 dearieme January 20, 2016 at 6:43 am

No, funny too.

14 rayward January 19, 2016 at 6:51 pm

This illustrates a concept most people have a problem with: the past does not exist for us. Sure, we have accounts of the past, but we can never recreate the past, not an exact replication of the past, the precise people, places, events. It’s probably just as well, because if not, the blood of the 11 million would be not only on the Germans who committed the atrocities but their children and their children’s children.

15 Horhe January 19, 2016 at 7:23 pm

So the current Germans are self-destructing for nothing? There isn’t even any blood to wash away through some ill conceived redemption of tolerating their replacement (and subjugation) by anti-semitic, uncivilized foreigners as recompense for wronging the roughly assimilated and high achieving Jewish minority that had been there since forever?

16 Nathan W January 19, 2016 at 10:10 pm

The ME will be empty long before Europe is over-run by Muslims, and probably the way in Syria will be over before then.

Anything else to fearmonger about?

17 Cliff January 20, 2016 at 12:18 am

Make up stuff! Crystal ball! Nothing to see here!

18 Marian Kechlibar January 20, 2016 at 2:59 am

The cohort of young men is much larger in the Middle East (and the migration wave comes from north and central Africa as well) than in Europe, whose population is significantly older. Moreover, the immigrants concentrate in a few countries.

Of course that the target countries may be overrun in the practical sense.

19 Average IQ January 19, 2016 at 10:07 pm

Actually, they didn’t go for free. The Nazis made them buy tickets (at least in some cases).
Which makes it even “funnier” in the sickeningly sense suggested.

Also, I wish people (like rayward) would stop saying “sure,”. This is really irritating.But maybe I’m the only one who feels this way about it.

20 Thiago Ribeiro January 20, 2016 at 4:23 am

Sure, some other people may find it irritating too, but most people cope with it without throwing a fit.

21 dearieme January 20, 2016 at 6:44 am

“Sure” is shorter than “of course”, which I let sneak into my comments far too often. Anyways.

22 Thiago Ribeiro January 20, 2016 at 12:06 pm

“’Sure’ is shorter than of ‘course’.”
Of course it is.

23 Average Joe January 20, 2016 at 11:45 pm

Shorter is not always better.
raward is a lawyer. Lawyers are smart. They have to be. He gets it. He’s now using “of course” instead of “sure.
At risk of being accused of not “coping” and throwing a “fit”, I wish more people would do the same, even if it requires an extra syllable.
If you disdain “of course”, how about “needless to say” or “without a doubt” or “doubtless (saving two syllables), or even, for Thiago, “sem duvida”.

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