What is Collusion?

Mary McMahon
Mary McMahon

Collusion is a form of secret agreement between two or more people. These individuals typically meet secretly, reaching an agreement which is designed to deceive or defraud someone else, an organization, or the government. Collusion can take a number of forms, many of which are illegal, and individuals may have found themselves the victim of a lesser form as some point, as for example when a group friends all privately agree on which film they want to attend before contacting another friend.

Collusion is a type of secret agreement.
Collusion is a type of secret agreement.

In order for a charge of collusion to be proved, it must be demonstrated that the parties involved met knowingly and with the intent to deceive. If, for example, two companies meet and agree to a price-fixing scheme, this would meet the definition. If two companies just happen to set the same prices for their products, this would not be deceptive, although many people would view it as highly suspect, and it could be considered a case of tacit collusion.

Collusion may take place within a group of friends that all agree on something.
Collusion may take place within a group of friends that all agree on something.

Another form might happen when someone attempts to commit insurance fraud by damaging a home or car with the assistance of someone else. People have also been known to commit collusion during divorce proceedings, with one partner pretending to have committed adultery so that the divorce will go through. To address this problem, many regions have established no-fault divorce laws, which allow people to divorce by mutual agreement.

Collusion often occurs between close friends.
Collusion often occurs between close friends.

Like other fraudulent activities, collusion may be heavily punished if the perpetrators can be found. In the financial world, it is seen a violation of free market rules, creating a situation in which companies defraud their investors and the public for profit, and as such companies are closely monitored for signs of secret agreements. Sometimes, a situation called “tacit collusion” arises, where companies collude without verbally agreeing to, as might happen when companies peg their prices on one market leader, rather than setting them on their own.

Some games also involve collusion, especially poker. As a general rule, it's hard to do by accident. If someone find himself in a private meeting with someone or an organization and he are asked to cooperate with them in a way that seems suspect or potentially fraudulent, he may want to decline, to avoid being accused of collusion.

Collusion may occur among friends who agree to keep certain information confidential.
Collusion may occur among friends who agree to keep certain information confidential.
Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a wiseGEEK researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

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Discussion Comments

anon351728

Would it be collusion if individuals who worked for the same company in different regions shared information, and acted in unison towards a customer?

These individuals make decisions independently, but share information regarding customers.

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