It is unlawful for those who are competing in a public auction or the like to collude to freeze the price of a commodity and to close the bidding at a specific price. This practice involves utter selfishness and causes the owner of the commodities to incur losses which are bad deeds that do not befit Muslims. Such behavior is rejected by Islamic Shari`ah. This practice is unlawful exactly like outbidding without purchasing, and going out to buy from caravans in the road (before they reach the markets). Such practices may cause individuals and groups to incur losses and nurture grudges amongst them. They also involve violating people's financial rights. The Prophet (peace be upon him) forbade receiving caravans in the roads (before they come to the markets), a city dweller's sale on behalf of a desert dweller, bidding without purchasing, collusion with the sellers to outbid against Muslims, outbidding against a Muslim after the transactions are concluded, proposing to a woman who is engaged to a Muslim and such practices. They involve wronging, causing harm to others and nurturing grudges between people.Consequently, if the seller against whom bidders collude to freeze the price at a certain point discovered that he had been deceived in the transaction, he has the right to either cancel the transaction or to accept it. (Part No. 13; Page No. 115)
May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.