Saturday, April 14, 2018
Vivek Ghosal, Rensselaer Polytechnic Institute; Center for Economic Studies and Ifo Institute for Economic Research (CESifo) and D. Daniel Sokol, University of Florida - Levin College of Law explain The Rise and (Potential) Fall of U.S. Cartel Enforcement.
ABSTRACT: Government enforcement against collusion, now viewed by the Supreme Court as the “supreme evil” in antitrust, has gone through various phases of enforcement. There have been periods in which cartels have been able to collude more or less effectively given various institutional tools at the disposal of the government. This article measures the attributes of cartel enforcement over time and the changing use of tools to assist with detection and punishment. First, in Section 1 we provide an overview of cartel enforcement. In Section 2, we provide a background of the intellectual context for cartel enforcement. Next, in Section 3, we provide descriptive analysis of critical cartel enforcement events and institutional developments from 1890 to the present. Thereafter, we describe the data and intertemporal patterns in cartel enforcement in Section 4. In Section 5 we develop the empirical specification and present the estimation results. In Section 6 we discuss whether there has been a potential decline in cartel enforcement in the U.S., given our data and findings. Next, in Section 7, we briefly compare some key data between U.S. and European Commission cartel prosecutions to examine potential dynamic interlinkages. Finally, we offer concluding remarks in Section 8.