Edited by Albert A. Foer and Jonathan W. Cuneo
Chapter 2: The Impact of International Cartels
John M. Connor1 Introduction Despite the evident antitrust successes in sanctioning international cartels since 1990, many remain skeptical about whether current enforcement regimes are capable of serving the aims of antitrust. Deterrence is the most commonly accepted legal-economic theory that justifies the passage and enforcement of antitrust laws, and there is emerging evidence that in some jurisdictions it has a strong role as a practical guide to imposing anti-cartel fines.2 There is also mounting evidence that monetary penalties are at historically high levels in North America and Western Europe, and at low but rapidly accelerating levels in key jurisdictions on other continents. That penalties are by most measures highest in North America is in large part due to the nearly unique availability and widespread use of private rights of action by cartel victims, further amplified by severe penalties for individual cartel executives. Optimal deterrence principles imply that fines, private settlements, and individual criminal penalties are fungible: they are complementary punishments with respect to their ability to raise the expected costs of criminal activity. While deterrence may have improved marginally since the 1990s, there is a near consensus among scholars of modern international cartels that current competition policies cannot optimally deter cartel behavior because such policies are ‘oriented towards addressing harm done in domestic markets . . . [or] merely prohibit cartels without [sufficiently strong] sanctions.’3 Connor finds that domestic cartel overcharges are so high and conspiracies so durable that current US public and private monetary sanctions provide inadequate ex post deterrence;4 true...
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