Regulatory Framework & Compliance Flashcards
7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Regulatory Framework & Compliance flashcards as text
Which of the following constitutes 'hub-and-spoke' price fixing?
Answer: A common supplier coordinating competitor pricing through bilateral vertical agreements
Hub-and-spoke price fixing occurs when a central party (hub) coordinates horizontal price agreements among competitors (spokes) through vertical relationships.
Under the Foreign Corrupt Practices Act (FCPA), a U.S. company offering below-cost pricing to win a foreign government contract could face liability if the pricing is structured to:
Answer: Conceal a bribe disguised as a discount to a foreign official
The FCPA prohibits providing anything of value to foreign officials to obtain business, and below-cost pricing structured as a hidden benefit to an official could constitute a bribe.
A price compliance audit typically examines which of the following to assess Robinson-Patman risk?
Answer: Price variance reports across similarly situated customers
Auditing price variances across similarly situated customers reveals potential discriminatory pricing patterns that could trigger Robinson-Patman scrutiny.
In pharmaceutical pricing, the Medicaid Drug Rebate Program requires manufacturers to report which price as the basis for calculating rebates?
Answer: Average Manufacturer Price (AMP)
The Medicaid Drug Rebate Program uses Average Manufacturer Price (AMP) as the primary basis for calculating unit rebates owed to state Medicaid programs.
A dominant firm charging excessively high prices in a market where it holds monopoly power may violate competition law in the EU under:
Answer: Article 102 TFEU
Article 102 TFEU prohibits abusive conduct by dominant firms, including unfair (excessive) pricing that exploits consumers or excludes competition.
The concept of 'price parity clauses' (or most-favored-nation clauses) in platform agreements has attracted regulatory scrutiny primarily because they may:
Answer: Prevent suppliers from offering lower prices elsewhere, potentially softening competition
Most-favored-nation (MFN) clauses can reduce price competition by preventing suppliers from undercutting the platform's price on other channels, raising antitrust concerns.
When documenting a cost justification defense under the Robinson-Patman Act, a company should rely on:
Answer: Actual cost studies showing lower costs to serve certain customers
A valid cost justification defense requires actual cost accounting studies demonstrating that the price difference reflects genuine savings in manufacturing, selling, or delivery.