Thursday, October 14, 2010
Posted by D. Daniel Sokol
Andreas Mundt (Bundeskartellamt) has written on Competition, Sanctions and Due Process in Troubled Times.
ABSTRACT: Cartel proceedings with heavy fines for cartel members are currently in the spotlight of media coverage. Hardcore-cartels are neither solutions to the challenges companies face in times of economic crisis nor in better times. They are serious restrictions of competition and a threat to the market economy. They typically lead to higher prices and reduce incentives to improve quality and innovation. Customers who have to pay the higher cartel price are being ‘ripped off’, to put it in simple words. They are the direct victims of illegal behaviour. The plausible economic harm to competition and consumers occurs irrespective of the general economic situation and the one of the undertakings involved in the cartel. Furthermore, cartels also hold back recovery in times of economic crisis.