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
The Austrian Parliament has passed a bill amending the Austrian competition law rules. On March 1, 2013, significant changes will enter into force. These include the following: This is the follow-up to the post “Austria: New competition rules – Take one”. Strengthening of private enforcement The legislator made efforts to promote private enforcement. This is…
A NEW COMMISSIONER OF COMPETITION FOR CANADA The year just ended witnessed a changing of the guard at Canada’s Competition Bureau, with Melanie Aitken resigning as Commissioner of Competition in September 2012. Ms. Aitken was replaced on an interim basis by John Pecman, a seasoned Bureau veteran with over 28 years of enforcement experience. It…
On 19 November 2012, the OFT appointed Lee Craddock, a former police officer and case manager at the Serious Fraud Office, as Director of Investigations and Criminal Enforcement. His appointment follows the disastrous handling of the criminal price fixing case against British Airways (BA) executives in 2010, one of only two prosecutions of the cartel…
Almost two years into application of the new Croatian Competition Act (“Act”), the Croatian Competition Agency (“CCA“) has for the first time penalized undertakings involved in anticompetitive conduct. Under the previously applicable Competition Act (in force between 2003 and 2010), the CCA was authorized solely to establish a violation of competition law. A separate fining…
On 19 July 2012 the Bulgarian Commission on Protection of Competition (“CPC”) handed down a commitments decision and closed an investigation against six retailers for alleged horizontal coordination of their pricing and marketing policy (the “Commitments Decision”). This post highlights some issues and policy concerns stemming from the Commitments Decision and the preceding statement of…
Public procurements significantly add to the Croatian gross domestic product. Available data for 2011 reveal that public procurement contracts accounted for roughly 10% of the Croatian GDP. At the same time, based on the number of relevant decisions of the Croatian Competition Agency (“Agency”) and public statements of the Agency’s officials, cartels and cartel like…
Switzerland and the European Union are about to conclude a Cooperation Agreement in the field of competition law. This new Cooperation Agreement goes beyond the previous cooperation agreements of the EU with other jurisdictions. It will enable the Swiss and EU Competition authorities to closely coordinate their enforcement activities and in particular to exchange protected…
The Office of Fair Trading’s (“OFT”) long-running Dairy investigation has been plagued by controversies right from the outset. Allegations have been made by the OFT and subsequently withdrawn, the scope of the investigation has been progressively narrowed and the OFT has even had to pay Morrisons £100,000 to settle a libel claim. Against this backdrop,…
Shortly after revealing proposed amendments to the Competition and Consumer Protection Act (for details, please see my post from May 22), the Polish Competition Authority (the President of the Office for Protection of Competition and Consumers) published draft guidelines on commitment decisions (“Guidelines”). Since PCA nowadays uses commitment decisions increasingly often (125 such decisions were…
The leniency policy which was introduced in Hungary as early as 2003 to encourage “penitent” undertakings to confess, unfortunately failed to fulfil the high hopes of the legislator. One might wonder what could be the reason for the relatively low number of processed applications, which are not supported by exact statistical data (only informal data),…
