The High Economic Costs of Cartels: Can Private Enforcement Help?

Posted by D. Daniel Sokol

John Connor (Purdue Ag Econ) asks The High Economic Costs of Cartels: Can Private Enforcement Help?

ABSTRACT:This chapter examines anti-cartel enforcement in selected jurisdictions around the world, paying particular attention to the role of private court actions in attaining optimally deterring sanctions. The principal conclusions are as follows. There are numerous indicators that enforcement in North America comes closest to optimal deterrence of illegal cartel conduct. Monetary penalties are roughly commensurate with the economic injuries imposed on customers by price fixers. Since about 2000, the European Union – both the European Commission and its National Competition Authorities – have pulled ahead of North America in the size of fines imposed on cartels. While there are glimmers of change afoot, the EU's fight against cartel violators is hampered by court rules that severely limit the rights of cartel victims to seek compensation in private actions. Unlike the United States, EU law does not permit sanctions to be imposed on cartel managers, nor is this frequent in all but a few of its Member States. Cartel enforcement is weakest in Asia, Africa, and Latin America. There are a few rising stars on these continents, but government entities rarely see their efforts complemented by significant private settlements or damages awards to aggrieved cartel victims.