CPP Regulatory Framework & Compliance 5

Question 1

Which U.S. statute specifically prohibits bid rigging and price fixing in public procurement as criminal violations?

Accepted Answer

Sherman Antitrust Act Section 1

Answer

Sherman Act Section 1 makes price fixing and bid rigging criminal offenses, with per se illegal status and potential prison sentences for individuals.

Question 2

A pricing manager receives a call from a competitor's sales director asking about planned price changes for next quarter. The correct response is to:

Accepted Answer

Immediately terminate the conversation and report it to legal counsel

Answer

Exchanging forward-looking pricing information with competitors can constitute evidence of price-fixing conspiracy; the call must be ended and reported to legal counsel.

Question 3

Transfer pricing regulations enforced by the IRS require multinational companies to price intercompany transactions using which standard?

Accepted Answer

Arm's length standard

Answer

IRS regulations under IRC Section 482 require that intercompany prices between related parties reflect the arm's length standard — prices that unrelated parties would negotiate.

Question 4

Which of the following best describes 'algorithmic collusion' as a regulatory concern in digital markets?

Accepted Answer

Competing firms' pricing algorithms independently converging on supracompetitive prices without explicit agreement

Answer

Algorithmic collusion arises when autonomous pricing algorithms used by rivals learn to sustain supra-competitive equilibrium prices without any explicit human agreement.

Question 5

Under the EU Omnibus Directive (2022), retailers must display a reference price in promotional offers based on:

Accepted Answer

The lowest price charged in the 30 days prior to the promotion

Answer

The EU Omnibus Directive requires that the 'prior price' shown in a promotion be the lowest price the seller charged in the 30 days before the price reduction.

(CPP) Certified Pricing Professional Practice Test

(CPP) Certified Pricing Professional Practice Test

CPP Regulatory Framework & Compliance 5