Cartel Enforcement at the Antitrust Division, U.S. Department of Justice, 1990-2007

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John M. Connor, Sep 30, 2008

The purpose of this article is to assess the efforts of the U.S. Department of Justice’s Antitrust Division (“DOJ”) to detect and penalize criminal price fixing, which is nearly equivalent to prosecutions of hard-core cartel conduct. To do so, I collected scores of indicators of policy performance that cover the years 1990 to 2007. These are, for the most part, traditional indicators that have been used in previous legal-economic assessments and cited by DOJ officials in speeches about the agency’s progress. However, because of the rising importance of prosecutions of international cartels, additional attention is directed toward such cartels and the anti-cartel activities of by non-U.S. competition-law authorities. To guide the present assessment, I adopt the well accepted “optimal deterrence” framework. A key assumption of this paper is that U.S. and world monetary penalties are generally below an optimally deterring level. Although this assumption is not universally accepted by the private bar, it is broadly supported by academic legal-economic scholars of cartels and by DOJ officials themselves. Briefly, evidence in favor of sub-optimality follows from paradoxical trends. In spite of large and accelerating monetary sanctions imposed on cartels, both cartel detection rates and recidivism are high and continuing. Cartel sanctions, both government fines and private settlements, have …

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