Illegal Agreements Cartels

Cartels are very difficult to detect. They can involve many companies in the sector and customers are rarely able to discover the existence of a cartel. Antitrust authorities should be helped to detect cartels through various means and instruments, the most effective leniency programs. These programs provide for immunity or reduction of penalties for cartel members who cooperate with competition authorities (or “whistleblowers”). Most OECD countries have adopted leniency programmes that have helped to increase the success rate in cartel detection. Haines, F., Beaton-Wells, C. (2012). Ambiguities in the criminalization of business practices: cartels as a case study. British Journal of Criminology, 52(5), 953-973. This study shows how, in the cases selected, companies manage their cartels in the absence of laws. This article focused on the internal structure of cartels in terms of how companies are able to stabilize their cartels. The question of research was: how do informal coordination mechanisms allow for the stability of agreements outside the framework of formal legal control and what is the role of trust? Two different perspectives have been identified in the existing literature: an economic approach that implies a lack of trust and the need for monitoring and retaliation, and a social approach of adopting mutual trust and resorting to negotiation and mediation.

The elements of the two ideal types appeared in the selected cases. Supply manipulations are groups of companies that conspire to raise prices or to reduce the quality of goods or services offered in public tenders. While this anti-competitive practice is illegal, it costs governments and taxpayers in OECD countries billions of dollars each year. The results show the importance of interdependence between competitors and the use of informal social mechanisms to build trust and stabilize agreements. It also allows relatively large business groups to cooperate effectively (for example. B 12, 14 companies and a term of nine years, 7, 15 companies and a duration of seven years). The cases thus show how an economic model provides an incomplete explanation of the stability of the agreements and calls for a different approach to explaining how the stability of the agreements works. Moreover, this requires the integration of a social perspective into competition law and competition policy, where the influence of economic assumptions is widespread. This article contributes to a broader understanding of how the stability of agreements works, addressing the question of how agreements operate behind the scenes, face problems of coordination and instability, and how they deal with mutual disputes without any legal recourse. To check the exchange for the stability of agreements, it is useful to distinguish between two mentalities. The first and most dominant is an economic approach based on a lack of trust between cartels and their individual incentives for fraud.

The second approach is a social approach based on the impact of social mechanisms enabling trust between cartels. With regard to the stability of cartels, these conflicting approaches provide two explanatory models that raise different expectations of members stabilizing their cartels without any legal recourse.

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