Antitrust & Competition Policy Blog

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

Tuesday, December 3, 2019

Balancing the Conspiracy’s Books: Inter-Competitor Sales and Price-Fixing Cartels

Christopher Leslie, UC Irvine is Balancing the Conspiracy’s Books: Inter-Competitor Sales and Price-Fixing Cartels.

ABSTRACT: Antitrust law is designed to deter and dismantle price-fixing cartels. The success of the antitrust regime depends on courts being able to recognize price fixing and to hold price fixers accountable. Unfortunately, federal courts often do not appreciate the mechanics of cartelization, which leads judges to absolve price fixers of liability. This Article seeks to reduce the likelihood of that outcome by explaining how cartels use inter-competitor sales – sometimes called buybacks – as a mechanism to balance the cartel’s books. Until recently, all federal courts to consider the issue have held inter-competitor sales to be evidence of price fixing. Recently, however, the Third Circuit created a circuit split. With this circuit split as its frame, the Article explains why inter-competitor sales are inherently probative of collusion. Using a combination of economic analysis and empirical case studies, this Article examines the critical role that buybacks can play – and have played – in price-fixing conspiracies. This is the first law review article to focus on the relationship between inter-competitor sales and price-fixing conspiracies.

https://lawprofessors.typepad.com/antitrustprof_blog/2019/12/balancing-the-conspiracys-books-inter-competitor-sales-and-price-fixing-cartels.html

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