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Effectiveness of Antitrust Sanctions on Modern International Cartels

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  • John Connor

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Abstract

This paper assesses the antitrust fines and private penalties imposed on the participants of 260 international cartels discovered during 1990–2005, using four indicators of enforcement effectiveness. First, the United States is almost always the first to investigate and sanction international cartels, and its investigations are about seven times faster than EU probes. Second, US investigations were more likely to be kept confidential than those in Europe, but the gap nearly disappeared since 2000. Third, median government antitrust fines average less than 10% of affected commerce, but rises to about 35% in the case of multi-continental conspiracies. Civil settlements in jurisdictions where they are permitted are typically 6 to 12% of sales. Canadian and US fines and settlements imposed higher penalties than other jurisdictions. Fourth, fines on cartels that operated in Europe averaged a bit more than half of their estimated overcharges; those prosecuted only in North America paid civil and criminal sanctions of roughly single damages; and global cartels prosecuted in both jurisdictions typically paid less than single damages. Copyright Springer Science + Business Media, LLC 2006

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File URL: http://hdl.handle.net/10.1007/s10842-006-0028-9
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Bibliographic Info

Article provided by Springer in its journal Journal of Industry, Competition and Trade.

Volume (Year): 6 (2006)
Issue (Month): 3 (December)
Pages: 195-223

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Handle: RePEc:kap:jincot:v:6:y:2006:i:3:p:195-223

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Web page: http://springerlink.metapress.com/link.asp?id=105724

Related research

Keywords: anti-trust sanction; cartel; optimal deterrence; L12; L42; K22; B14; F29;

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References

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  1. Connor, John M., 2005. "Price-Fixing Overcharges: Legal And Economic Evidence," 2005 Annual meeting, July 24-27, Providence, RI 19254, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. Margaret Levenstein & Valerie Suslow & Lynda Oswald, 2003. "International Price-Fixing Cartels and Developing Countries: A Discussion of Effects and Policy Remedies," William Davidson Institute Working Papers Series 538, William Davidson Institute at the University of Michigan.
  3. John M. Connor, 2004. "Global Antitrust Prosecutions Of Modern International Cartels," Working Papers 04-15, Purdue University, College of Agriculture, Department of Agricultural Economics.
  4. Jonathan B. Baker, 2003. "The Case for Antitrust Enforcement," Journal of Economic Perspectives, American Economic Association, vol. 17(4), pages 27-50, Fall.
  5. Margaret C. Levenstein & Valerie Y. Suslow, 2002. "What Determines Cartel Success?," UMASS Amherst Economics Working Papers 2002-01, University of Massachusetts Amherst, Department of Economics.
  6. Robert W. Crandall & Clifford Winston, 2003. "Does Antitrust Policy Improve Consumer Welfare? Assessing the Evidence," Journal of Economic Perspectives, American Economic Association, vol. 17(4), pages 3-26, Fall.
  7. Clarke, Julian L. & Evenett, Simon J., 2002. "The Deterrent Effects of National Anti-Cartel Laws: Evidence from the International Vitamins Cartel," Working paper 131, Regulation2point0.
  8. Lynda Oswald & Valerie Suslow & Margaret Levenstein & Manuel Pastor, 2003. "International Price-Fixing Cartels and Developing Countries: A Discussion of Effects and Policy Remedies," Working Papers wp53, Political Economy Research Institute, University of Massachusetts at Amherst.
  9. Margaret Levenstein & Valerie Suslow & Lynda Oswald, 2003. "International Price-Fixing Cartels and Developing Countries: A Discussion of Effects and Policy Remedies," NBER Working Papers 9511, National Bureau of Economic Research, Inc.
  10. Sproul, Michael F, 1993. "Antitrust and Prices," Journal of Political Economy, University of Chicago Press, vol. 101(4), pages 741-54, August.
  11. John M. Connor, 2003. "Private International Cartels: Effectiveness, Welfare, and Anticartel Enforcement," Working Papers 03-12, Purdue University, College of Agriculture, Department of Agricultural Economics.
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Citations

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Cited by:
  1. Ghosal Vivek, 2011. "The Law and Economics of Enhancing Cartel Enforcement: Using Information From Non-Cartel Investigations to Prosecute Cartels," Review of Law & Economics, De Gruyter, vol. 7(2), pages 501-538, December.
  2. Martin Carree & Andrea Günster & Maarten Schinkel, 2010. "European Antitrust Policy 1957–2004: An Analysis of Commission Decisions," Review of Industrial Organization, Springer, vol. 36(2), pages 97-131, March.
  3. Ghosal, Vivek, 2006. "Discovering Cartels: Dynamic Interrelationships between Civil and Criminal Antitrust Investigations," MPRA Paper 5499, University Library of Munich, Germany.
  4. Cai, Xiaowei & Stiegert, Kyle W., 2010. "Cartel Dissolution with Effective Antitrust Policy," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61297, Agricultural and Applied Economics Association.
  5. John Connor & C. Gustav Helmers, 2006. "Statistics On Modern Private International Cartels, 1990-2005," Working Papers 06-11, Purdue University, College of Agriculture, Department of Agricultural Economics.

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