A report on Cartel and Collusion

Headquarters of the Rhenish-Westphalian Coal Syndicate, Germany (at times the best known cartel in the world), around 1910

The printing equipment company American Type Founders (ATF) explicitly states in its 1923 manual that its goal is to "discourage unhealthy competition" in the printing industry.

A cartel is a group of independent market participants who collude with each other in order to improve their profits and dominate the market.

- Cartel

To differentiate from a cartel, collusive agreements between parties may not be explicit; however, the implications of cartels and collusion are the same.

- Collusion

2 related topics with Alpha

Price fixing

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Anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand.

When the agreement to control price is sanctioned by a multilateral treaty or is entered by sovereign nations as opposed to individual firms, the cartel may be protected from lawsuits and criminal antitrust prosecution.

If the price of a new supplier is lower than the usual corporate bidding price, the reason may be that there is a collusion of bidding among existing companies.

Judge Coke in the 17th century thought that general restraints on trade were unreasonable.

Competition law

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Field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies.

Elizabeth I assured monopolies would not be abused in the early era of globalization.

Senatorial Round House by Thomas Nast, 1886

There is considerable controversy among WTO members, in green, whether competition law should form part of the agreements

John Stuart Mill believed the restraint of trade doctrine was justified to preserve liberty and competition.

Paul Samuelson, author of the 20th century's most successful economics text, combined mathematical models and Keynesian macroeconomic intervention. He advocated the general success of the market but backed the American government's antitrust policies.

Scottish Enlightenment philosopher Adam Smith was an early enemy of cartels.

The economist's depiction of deadweight loss to efficiency that monopolies cause

prohibiting agreements or practices that restrict free trading and competition between business. This includes in particular the repression of free trade caused by cartels.

A further problem of collective dominance, or oligopoly through "economic links" can arise, whereby the new market becomes more conducive to collusion.