Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Friday, September 21, 2007

Effectiveness of Antitrust Sanctions on Modern International Cartels

Posted by D. Daniel Sokol

Jconnor One of the defining characteristics of the last 10-15 years of international antitrust has been a "golden age" of cartel enforcement around the world.  How effective this enforcement has been has remained until now mostly unquantified.  In another in his series of excellent papers on international cartels, John Connor of Purdue University's Department of Agricultural Economics provides us an import answer to this question in Effectiveness of Antitrust Sanctions on Modern International Cartels.  It seems that overall, enforcers around the world continue to under-deter international cartels.

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, U.S. 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 U.S. 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.

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