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
In February 2022, Canada’s Minister of Innovation, Science and Economic Development announced that the Canadian government was evaluating ways to improve the operation of Canada’s Competition Act (Act). The Minister said that changes would be made in multiple stages, with some initial amendments to be proposed in the following months that would have “an immediate…
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Introduction On 27 May 2020 the Dutch Authority for Consumers and Markets (“ACM”) imposed a fine of € 82 million on four cigarette manufacturers for indirect information exchanges in violation of Article 101 TFEU and 6 Dutch Competition Act. It is the first fine ACM has given for indirect information exchanges between competitors. The manufacturers…
