Cartels and Economic Collusion

Cartels and Economic Collusion

The Persistence of Corporate Conspiracies

Michael A. Utton

Adam Smith warned of the prevalence of corporate conspiracies more than two hundred years ago. Since then, interest in cartels has sometimes intensified (during the Great Depression, for example) and sometimes diminished, but the need for control has always remained on the antitrust agenda. This well-documented book reviews the economic case against corporate collusion, as well as the arguments made for a more permissive attitude.

Chapter 8: Conclusion

Michael A. Utton

Subjects: economics and finance, competition policy, industrial economics


Cartels have been with us for a very long time and are likely to remain a feature of the current phase of capitalism just as they were in Adam Smith’s day and during the heyday of the industrial revolution. Although we cannot know how many cartels remain undetected, the numbers under investigation or applying for leniency indicate that many more probably exist. Thus in February 2004 the DoJ had around 100 grand jury cartel investigations pending, about half of which were international in scope. In the EU by early 2006 the competition authority had a backlog of 80 approved leniency applications (Connor and Lande 2006: 988 and 995). Notwithstanding the increased penalties imposed by the law, the attraction of escaping the full rigours and uncertainties of the market remain as strong as ever. Behaviour has remained constant while policy attitudes, particularly in Europe, have changed. Executives who, on the one hand profess their unqualified support for the market system free from government interference and control, on the other hand often seek every means to subdue the competitive pressures of the market by making common cause with their rivals. The epitome of this attitude was revealed in the meeting of the lysine conspirators who heard a vice-president of ADM repeatedly maintain that ‘our customers are the enemy, our competitors are our friends’. What is clear from the cases dealt with recently by the US and EU authorities is that the companies involved are frequently very large and multinational: giants rather than...

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