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 a judgment dated 5 February 2018, the General Court of the EU (the “General Court”) rejected the appeal by German retailer Edeka–Handelsgesellschaft Hessenring’s (“Edeka”) against a decision by the European Commission (the “Commission”) refusing Edeka’s application to obtain access to material classified by the Commission as confidential during its investigation into alleged manipulation of…
The Polish competition authority applies the principle of in dubio pro reo in the case concerning a cartel on the domestic certification market (and refuses to use lie detecting devices) On 29 December 2017, the Polish competition authority – the President of the Office of Competition and Consumer Protection (the “OCCP President”) – penalised a…
Introduction On December 18 2017, the Authority for Consumers and Markets (the ACM) announced that it had halted its investigation into cartel agreements between Dutch and German towage companies in various ports in Germany and the Netherlands. Stek represented one of the German towage companies in this investigation. The ACM’s decision to stop the investigation…
The German Federal Cartel Office (‘FCO’) decided in 2015 that ASICS, the manufacturer of sports and running shoes, may not prevent its dealers from cooperating with price comparison engines. The German Federal Court of Justice (‘BGH’) has now, in a judgment published on 19 January 2018, confirmed the FCO’s decision. The judgment comes only weeks…
On March 7, 2017, the Polish Court of Competition and Consumer Protection, the (“CCCP“), issued an important judgment regarding the powers of the Polish Competition Authority, the (“PCA“), to search IT systems and hardware (e-mails and hard disks) during dawn raids (the Order of the CCCP of 7 March 2017, XVII Amz 15/17). This judgment…
Being a policeman is a difficult job at the best of times. Suspects inevitably think that they are innocent and resent the perceived unjustified intrusion on their law-abiding activities. At least the policeman can take some satisfaction from looking the victim in the eye and knowing that they have improved that person’s lot. One may…
Introduction The Director of Public Prosecutions (DPP) has decided to appeal the sentences imposed by the Central Criminal Court (the Court) on 31 May 2017 in Ireland’s first bid-rigging criminal cartel case. The grounds are “undue leniency” under section 2 of the Criminal Justice Act 1993. At first glance the case looks straightforward. The sentence…
The German Federal Cartel Office (“FCO”) has published its sector inquiry report in cement and ready-mix concrete (link to English press release). While the report targets the cement and ready-mix concrete sector and its particularities (e.g., cartel history, oligopolistic markets, vertical integration, homogenous products), it may provide some insights into the FCO’s approach in general,…
On 28.03.2017, the Bulgarian Commission for Protection of Competition (the “Bulgarian Commission”) approved commitments by the leading Bulgarian oil companies Lukoil Bulgaria LTD; Eco Bulgaria JSC; Shell Bulgaria JSC, OMV Bulgaria LTD; NIS PETROL LTD. The ground for the initiation of the procedure concluded with the approval of commitments was the suspicion by the Bulgarian…
Following a guilty plea to criminal bid-rigging and obstruction charges, a company director was fined €7,500 by an Irish judge on 31 May and sentenced to three months’ imprisonment (suspended – meaning no jail time). The executive was also barred from acting as a company director for five years, while the company involved was fined…
