Wednesday, June 6, 2007
Posted by D. Daniel Sokol
After receiving a number of inquiries about a post earlier this week, I am following up with posting on a new working by John Connor on cartels. Connor has increased our understanding of international cartels probably more than any other scholar. His latest working paper is Statistics on Modern Private International Cartels, 1990-2005 with colleague Gustav Helmers, which has important implications for both scholars and enforcers.
ABSTRACT: This report explains the principal economic and legal features of a
unique set of data on 283 modern private international cartels
discovered anywhere in the world from January 1990 to the end of 2005.
Measured in real 2005 money, aggregate cartel sales and overcharges
totaled about $1.2 trillion and $500 billion, respectively. In the
early 2000s, about 35 such cartels were discovered each year. We find
that global cartels comprise more than half of the sample's affected
sales and are larger, longer lasting, and more injurious than other
types. In the early 2000s world-wide corporate penalties stabilized at
or above $2 billion per year, one-thousand times penalties in the early
1990s. More than 40% of those penalties were from settlements in
private suits, and most of the rest are fines imposed by U.S. and EU
Median penalties are low: from 1.4% to 4.9% of affected sales, depending on the type of prosecution. As a proportion of damages, median fines ranged from less than 1% for EU-wide cartels to 17.6% for Canada. Private plaintiffs obtained 38% of damages from international cartelists. World wide, median real cartel penalties of all types amounted to about 20% of overcharges.