A cartel is a formal agreement among firms in an oligopolistic industry.
Cartel members may agree on such matters as prices, total industry output, market shares, allocation of customers, allocation of territories, bid-rigging, establishment of common sales agencies, and the division of profits or combination of these. Cartel in this broad sense is synonymous with “explicit” forms of collusion. Cartels are formed for the mutual benefit of member firms.
The theory of “cooperative” oligopoly provides the basis for analyzing the formation and the economic effects of cartels. Generally speaking, cartels or cartel behaviour attempts to emulate that of monopoly by restricting industry output, raising or fixing prices in order to earn higher profits.
Source: OECD
Once upon a time, but not so long ago, a certain company received a request for information (“RFI”) from the European Commission (in the form of a binding decision). This RFI was nothing like any company had ever seen. It was 90 pages long, contained 11 sets of numerous detailed questions, and demanded a rapid…
In her recent opinion, Advocate General J. Kokott went over one of the most important elements for companies facing cartel sanction: the fines calculation method. If this specific point is often challenged by the parties, the Court of Justice of the European Union’s (ECJ) upcoming judgement Pilkington Group Ltd and Others v European Commission may…
by Anita Banicevic and Mark Katz[1] 2015 saw a number of interesting developments in cartel enforcement in Canada, the most important of which were setbacks suffered by Canada’s competition authorities in two high profile prosecutions. We discuss these and other developments below, following a brief overview of the cartel enforcement regime in Canada. Cartel Enforcement…
Co-authored by Patrick Harrison and Audrey Silvain, Sidley Austin LLP. There are few distinctions more important in EU competition law than that between the notion of a restriction “by object” – where a regulator need not demonstrate that conduct had anti-competitive effects – and the notion of a restriction “by effect,” where a regulator…
A recent report from the National Audit Office has recommended that the Competition and Markets Authority (“CMA”) increase the number of cartel investigations it carries out. A number of recent statements made by senior officials in the CMA’s Cartels and Criminal Group (“CCG”) suggest that the CMA is listening very carefully. The case for more…
Eturas runs the e-commerce back-end of 30 travel agents in Lithuania. An administrator message to each member informed them that the e-commerce functionality allowing each travel agent to grant discounts would be capped at 3 per cent. That message appeared in part of the system relating to “information messages”. The Court of Justice found that…
On January 6, 2016, the Secretariat of the Swiss Competition Commission (the investigative body of the Swiss Competition Commission; the “Secretariat”) issued a “Notice on investigation instruments“, i.e. on the conduct of dawn raids, seizing of evidence, and interviews (the “Notice”). The 12-page Notice replaces an earlier notice, which mainly described the process of dawn…
“A strong and active antimonopoly authority is an incentive for undertakings to engage in prevention” – the President of the Polish Competition Authority presents his views on competition law compliance. Adam Jasser, the President of the Polish Competition Authority (UOKIK) has recently spoke to Bartosz Jagura of Viadrina Compliance Center about competition law compliance. It…
Belgian endives are a divisive vegetable: their bitterness delights some but repulses others. And even amongst Belgian endive enthusiast you’ll find some that prefer them raw – to maintain their crispness – while others like them cooked so that their bitterness comes out even more. But Belgian endives are no longer the exclusive battleground of…
On 4th November, the European Commission published a far-reaching consultation (the Consultation) on proposals to boost the enforcement powers of national competition authorities (NCAs) and to address differences between national competition enforcement systems in the European Union. The Consultation builds on the 2014 Communication on Ten Years of Regulation 1/2003 (the Communication) but also reflects…
