There are three main policy implications. First, some cartel authors believe that there is little evidence that the cartels raise prices significantly or are permanent enough to justify the level of current sanctions imposed by the U.S. corporate cartel. The results of this survey strongly contradict these views. In fact, the data suggests that penalties in U.S. and foreign policy on fines should be increased. This article reviews 259 published studies covering a wide arc of history and all types of hardcore private cartels that include 1,040 quantitative estimates of excessive fees. The main conclusion is that the long-term average margin for all types of cartels is 25.0% over all periods: 18.8% for domestic agreements and 31.0% for international cartels. About 7 % of the sampled cartels were unable to increase their prices. Excessive cartel royalties are false, bringing the profit margin of all successful cartels to 43.4%. Doomed cartels are, on average, just as effective at raising prices as unpunished cartels.
However, bidding behaviour involves slightly lower premiums than price cartels. Most of the studies come from social scientists, but their conclusions are no different from excessive fees in a subsample of final judgments in U.S. horizontal collusion cases or decisions of foreign competition boards. This article is an investigation that identified hundreds of published social science studies on hardcore private cartels that included 674 long-term overload observations. The main conclusion is that the median margin of agreements is 25% for all types of agreements over all time periods: 18% for domestic cartels, 32% for international agreements and 28% for all successful cartels. In addition, the review of 24 final judgments in horizontal collusion cases in the United States revealed an average overload of 21% and an average overload of 30%. Outside the United States, 62 competition commission decisions found average excessive prices of 29% on average and 49% on average. These results suggest that U.S. and non-U.S. antitrust sanctions should be tightened. Despite the apparent increase in cartel detection rates and the level of fines and sanctions over the past decade, it can be argued that current global antitrust regimes are not a deterrent. Second, the average fines imposed by Canada and the EU on identical international cartels since 1995 have been lower than the fines imposed by the U.S.
government, but the excessive fees caused by cartels discovered outside the U.S. are higher than cartels focused on North America. Therefore, fine-tuning practices abroad need to be strengthened. Political Institutions: Bureaucracies & Public Administration eJournal Copyright © 2007, Emerald Group Publishing Limited. Connor, J.M. (2007), “Price-fixing Overcharges: Legal and Economic Evidence,” Zerbe, R.O. and Kirkwood, J.B. (eds.) Research in Law and Economics (Research in Law and Economics, Vol. 22), Emerald Group Publishing Limited, Bingley, pp. 59-153. doi.org/10.1016/S0193-5895(06)22004-9 Third, cartels with multicontinental effects raise prices more than other types of international cartels.
Despite the apparent increase in cartel detection rates and the level of fines and sanctions over the past decade, it can be argued that current global antitrust regimes are not a deterrent.