Studies in Industrial Organization: Global Price Fixing (2nd Edition)
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This book describes and analyzes the formation, operation, and impacts of modern global cartels. It provides a broad picture of the economics, competition law and history of international price fixing. Intensive case studies of collusion in the markets for lysine, citric acid, and vitamins offer a deep, detailed understanding of the phenomenon. The author assesses whether antitrust enforcement by the European Union, the United States, and other countries can deter cartels.
of this book, along with her colleagues Angelica Holt and Pamela Leap. Debby Weber, David Ubilava, Jeffrey Zimmerman, and Gustav Helmers also assisted in the preparation of the manuscript. Finally, I would like to express my appreciation to Purdue University for its material support during 1997-2006. Chapter 1: Introduction This book recounts how a modest number of highly placed managers in prominent multinational companies built and ran three global cartels, a way of doing business that had
U.S. liability facing corporate price fixers from government and private prosecutions after 1990 was six to ten times the cartel’s overcharge. However, the actual monetary sanctions are almost always much lower multiples of damages. In the case of international cartels operating outside North America, fines are even lower proportions of the harm caused. In part, the debate over the desirability of class-action trebledamages suits reflects a wider debate on the social benefits of treble damages
themselves. Some believe triple damages to be unnecessarily high to deter (Easterbrook 1986), while others argue that plaintiffs often receive at most single damages (Lande 1993). If plaintiffs really do get close to single damages, then civil penalties alone provide virtually no deterrence because only a small portion of all conspiracies are discovered and prosecuted. The best economic study of this issue concluded that only 13 to 17% of all illegal U.S. cartels are caught (Bryant and Eckard
longer I followed the news on the exposure and prosecution of these global cartels, the more convinced I became of their historical importance. Unlike the historical instances of localized price fixing in the U.S. food industries with which I was familiar, these cartels were different. They were huge, complex, geographically extensive, culturally pluralistic, illustrative of a major technological shift, and objects of heavy sanctions by antitrust enforcers. Perhaps equally important, the vast
Europe (Tr. 5915-5916). History of the Industry 175 for at least 17 years is, I think, a true cooperation.” (Tr. 5915-5916). Although not specifically mentioned, for the European conspiracy to be successful, Kyowa’s exports from Japan or Mexico would also have had to be restrained. The companies limited the volume of European imports and local production. With its dominant European market share, the practice at Eurolysine in the 1980s was to raise lysine prices as high as the price of