Practice Test Geeks(CPP) Certified Pricing Professional Practice Test
← All CPP Flashcard Decks

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

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

    Answer: Sherman Antitrust Act Section 1

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

  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:

    Answer: Immediately terminate the conversation and report it to legal counsel

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

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

    Answer: Arm's length standard

    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.

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

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

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

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

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

    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.

  6. A company selling medical devices to hospitals offers loyalty rebates tied to the hospital achieving 90% of its purchases from that company. This arrangement may raise antitrust concerns under:

    Answer: Clayton Act Section 3 for exclusive dealing or tying

    Loyalty or fidelity rebates conditioned on near-exclusive purchasing can be challenged under Clayton Act Section 3 as exclusive dealing arrangements that foreclose competition.

  7. In a compliance training context, the 'antitrust compliance tone at the top' principle most directly refers to:

    Answer: Senior leadership visibly championing legal compliance in competitive behavior including pricing

    Tone at the top means senior executives actively communicate and model commitment to antitrust compliance, which is a recognized factor in effective compliance programs.