Abstract In late 1962, the U.S. Senate Antitrust and Monopoly subcommittee announced its intention of examining the antitrust implications of intracompany pricing. The issue was raised by the Senate Small Business Committee, which charged that pricing agreements between two units of a large corporation are immune to the anti-trust laws while an identical agreement between two small business firms is forbidden. The decision to price goods transferred internally between operating divisions of a company may appear to be one that should be determined by organizational and accounting considerations alone. The fact is, however, that there are legal implications that must be taken into account. The use of intracompany pricing and the method employed may be cited by the Government in the event that anti-trust proceedings are carried out against the corporation. The method used may also raise questions as to the company's compliance with state unfair practices acts. For those companies which have foreign subsidiaries, intracompany pricing may raise problems under foreign customs and tariff laws.
Willard E. Stone (Wed,) studied this question.