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Private International Cartels: Effectiveness, Welfare, and Anticartel Enforcement


  • John M. Connor

    () (Department of Agricultural Economics, College of Agriculture, Purdue University)


This paper presents and analyses economic data on 167 international cartels that were discovered by antitrust authorities after January 1990. The median cartel had five corporate members and generated $1.2 billion in sales during the collusive period. Nearly 40% of affected sales occurred in the organic chemicals industries, half of which were sold to food, feed, and agricultural firms. On average, the cartels lasted nearly six years, but average durability declined by more than 60% from the early 1990s to the early 2000s. In the early 2000s more than 20 international cartels were discovered each year, a rate six times faster than the early 1990s. The large size and longevity of these cartels, when combined with average monopoly overcharges of 28%, cause a great deal of monetary harm to buyers. Discovered cartels have met with increasingly harsh sanctions since 1990. Government authorities have imposed a total of $7.1 billion in fines on 870 companies and 62 executives, of which the United States (27%) and European Union (51%) are the major governments responsible. Private antitrust suits resulted in settlements totaling at least $3.4 billion. Some 32 executives have been imprisoned. Statutory penalties, if imposed at maximum levels, would extract about 12 times cartel overcharges, a level sufficient to deter most firms from forming or joining a cartel. However, applying optimal deterrence concepts to the characteristics of modern international cartels allows one to deduce that current antitrust enforcement is inadequate to deter cartel formation. This conclusion follows from low probabilities of detection, overly generous leniency policies in finesetting, the absence of private suits outside North America, the inability of most indirect purchasers to recover damages, and generally weak anti-cartel enforcement in Asia and Latin America.

Suggested Citation

  • 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.
  • Handle: RePEc:pae:wpaper:03-12

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    References listed on IDEAS

    1. Hughes, James W. & Barbezat, Daniel P., 1996. "Basing-Point Pricing and the Stahlwerksverband: An Examination of the “New Competitive School”," The Journal of Economic History, Cambridge University Press, vol. 56(01), pages 215-222, March.
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    Cited by:

    1. Dirk Schindler & Guttorm Schjelderup, 2009. "Harmonization of Corporate Tax Systems and Its Effect on Collusive Behavior," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(4), pages 599-621, August.
    2. John M. Connor, 2004. "Global Antitrust Prosecutions of Modern International Cartels," Journal of Industry, Competition and Trade, Springer, vol. 4(3), pages 239-267, September.
    3. repec:kap:ejlwec:v:44:y:2017:i:3:d:10.1007_s10657-017-9564-5 is not listed on IDEAS
    4. 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.
    5. Hinloopen, Jeroen & Onderstal, Sander, 2014. "Going once, going twice, reported! Cartel activity and the effectiveness of antitrust policies in experimental auctions," European Economic Review, Elsevier, vol. 70(C), pages 317-336.
    6. Fink, Nikolaus & Schmidt-Dengler, Philipp & Stahl, Konrad & Zulehner, Christine, 2015. "Registered cartels in Austria: An overview," ZEW Discussion Papers 14-058, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    7. Frederik Silbye, 2012. "A note on antitrust damages and leniency programs," European Journal of Law and Economics, Springer, vol. 33(3), pages 691-699, June.
    8. Sovinsky, Michelle & Eric Helland, 2013. "Do Research Joint Ventures Serve a Collusive Function?," The Warwick Economics Research Paper Series (TWERPS) 1030, University of Warwick, Department of Economics.
    9. Buccirossi, Paolo & Spagnolo, Giancarlo, 2006. "Optimal Fines in the Era of Whistleblowers," CEPR Discussion Papers 5465, C.E.P.R. Discussion Papers.
    10. John Connor, 2006. "Effectiveness of Antitrust Sanctions on Modern International Cartels," Journal of Industry, Competition and Trade, Springer, vol. 6(3), pages 195-223, December.

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    cartels; antitrust; monopoly;


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