Wednesday, December 24, 2014
John M. Connor, Purdue University; American Antitrust Institute (AAI) analyzes Quebec’s Construction Cartels.
ABSTRACT: Around 2012, authorities discovered one of the most complex set of cartels in the world in its construction industry. Dozens of companies large and small colluded on the price of bids for public works in several cities in the Province of Quebec over a decade or more. Bidding firms, some with mafia connections, made regular payoffs to the political parties in power. A commission of inquiry is hard at work to reveal details of the cartels’ conduct and propose solutions.
This working paper lays out the characteristics of bid-rigging cartels worldwide; suggests the likely range of injury to buyers; and outlines the range of effective tools employed to discover hidden, illegal cartels and to punish cartelists.