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
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…
Any company or organisation that finds itself as the ‘middle man’ in contacts between competitors or which has dealings with such a middleman must take care, as a flurry of recent EU cases has demonstrated. Any company that directly facilitates those contacts is in very dangerous waters indeed. Cartel Facilitation In AC Treuhand, the European…
If the recent Wahl opinion could have instilled some doubts about the responsibility of cartel facilitators under Article 101 of the Treaty on the Functioning of the European Union (TFEU),[1]Advocate General Wahl Opinion, AC Treuhand v Commission, ECLI:EU:C:2015:350 the debate has been brought to an end with the Court of Justice of the European Union’s…
Co-authored by Patrick Harrison and Lara Kaplan, Sidley Austin LLP. The European Commission (“Commission”) introduced its settlement procedure for cartel cases back in 2008.[1]Commission Regulation (EC) No 662/2008 of 30 June 2008 amending Regulation No 773/2004, as regards the conduct of settlement procedures in cartel cases (OJ 2008 L171) (“the Settlements Notice”). The main aims? …
The Polish Competition Authority, which is the President of the Office of Competition and Consumer Protection (the “PCA”), has announced that, starting from 1 September 2015, it will be issuing statements of objections to undertakings and will set up an internal evaluation committee. These new tools are, in PCA’s own words, designed to “strengthen procedural…
On 9 July 2015, the Court of Justice of the European Union (“ECJ”) issued an important judgment[1]Case C-231/14P – InnoLux v European Commission, judgment of 9 July 2015. concerning the basis on which cartel fines by the European Commission should be calculated for vertically integrated companies. The judgment endorses the power of the European Commission…
