Cartels and Economic Collusion
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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.
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Chapter 5: The Evolution of Cartel Policy

Michael A. Utton


I. INTRODUCTION The centenary of US antitrust law occurred in 1990. The simple and brief wording of the 1890 Sherman Act, which remains at the centre of American antitrust, has led not only to an enormous body of case law (and a large antitrust ‘industry’) but has also provided an example for many other countries to follow. What started out as an American experiment has now spread to most market economies. Some of the difficulties that we have alluded to in previous chapters are reflected in the cases with which the various antitrust authorities have had to deal. When, for example, should collaborations between firms in the same industry be exempted from the law, or at least be permitted on very special grounds? How much, if any, communication between firms can be allowed before normal commercial intercourse turns into a conspiracy against the public? More fundamentally we should ask whether a court of law is the most suitable mechanism for determining antitrust issues. A large number of American antitrust cases are decided by the courts, whereas in the EU the initial decisions are made by an administrative body. A court only becomes involved if a case goes to appeal. Although it might be thought that the economic analysis of markets and competition would be at the heart of any antitrust case, in fact it took some considerable time before economics and economists played a central role. In recent years economists have figured more prominently in important antitrust cases but it...

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