International cartel enforcement : lessons from the 1990s

The enforcement record of the 1990s shows that private international cartels are not defunct--nor do they always fall quickly under the weight of their own incentive problems. Of a sample of 40 such cartels prosecuted by the United States and the European Union in the 1990s, 24 lasted at least four years. And for the 20 cartels in this sample where sales data are available, the annual worldwide turnover in affected products exceeded $30 billion. National competition policies address harm in domestic markets, and in some cases prohibit cartels without taking strong enforcement measures. The authors propose a series of reforms to national policies and steps to enhance international cooperation that will strengthen the deterrents against international cartelization. Furthermore, the authors argue that aggressive prosecution of cartels must be complemented by vigilance in other areas of competition policy. If not, firms will respond to the enhanced deterrents to cartelization by merging or by taking other measures that lessen competitive pressures.