Why Is There A Strong Incentive To Cheat On A Cartel Agreement

This article examines the stability of cartels on the basis of a qualitative analysis of 14 Dutch cases. In these cases, the Dutch Competition Authority imposed a fine between October 2007 and January 2012.Footnote 8 These cases were selected because the reports leading to a fine contain substantial evidence, including documents on coordination and disclosure within cartels. This documentation allowed for a systematic and in-depth study of the structure and nature of the agreements. All 14 cases were investigated through a literature review and semi-structured interviews with consumer and market case managers. The sources are official reports from the Authority, footnote 9, which summarize the records and contain a selection of evidence used in administrative proceedings against fines against companies. These files contain descriptions of the cartels` practices and contain correspondence between their members; transcripts of oral interrogations with company representatives by the Autorité de la concurrence; and the sources of the administration of the agreement. These statements are supported by an additional written administration. The equipment was systematically reviewed using a checklist, focusing on the nature of the network; the nature of the mutual relationship; mutual control mechanisms; mutual trust mechanisms; and cases of fraud and conflict. For each case, the document analysis was supplemented by a semi-structured interview with the project manager of the authority that conducted the investigation. In these interviews, the following topics were discussed: the nature of the cartel; mechanisms of mutual control and trust; and cases of fraud and mutual conflict. These interviews provided a better overview of the files and asked additional questions that could not be fully answered by reviewing the written reports.

This example highlights what other researchers have pointed out: participation in cartels is not a voluntary and purely instrumental decision, but rooted in social reality that includes existing loyalties to industry peers in markets and within companies (Parker 2012). Breaking with the cartel was often difficult because of the interdependencies that had developed over years of close cooperation with others. Relying on informal systems and methods to do business is not easy to reject them overnight in order to continue your business. This is illustrated by the following example: The results illustrate the importance of interdependencies between competitors and the use of informal social mechanisms to build trust and stabilize cartels. It also allows relatively large groups of enterprises to cooperate effectively (e.B case 12, 14 enterprises and a duration of nine years, case 7, 15 enterprises and a duration of seven years). The cases show that an economic model provides an incomplete explanation of the stability of the cartel and requires a different approach to explain how the stability of the cartel works. In addition, it requires the integration of a social perspective into competition law and policy, in which the influence of economic assumptions is widespread. .