Is the Definition of a Cartel Ballooning?

Rein Wesseling, Dec 17, 2013

The media tend to refer to gangs that produce and distribute drugs as “cartels.” Of course these are not cartels as we, as antitrust lawyers, traditionally use the concept. In fact “drug cartels” seem to operate as businesses in the various regular forms we know: conglomerates, cooperatives, or “one-product firms.” Note, too, that the media habitually refer to rival drug cartels, meaning that these cartels are competing fiercely. So, in the antitrust context, are these cartels? To the extent we understand the agreements underlying the drug cartels, they would not seem to be that. An antitrust assessment of the workings of drug cartels, therefore, would need to be undertaken on the basis of a “rule of reason” analysis.

One may wonder therefore why the reference to drug gangs as “cartels” seems ineradicable. Perhaps that is due to the fact that there is no set definition of the concept of a cartel. Traditionally, however, this has not been an issue in the enforcement of antitrust laws around the world. Although the concept is perhaps difficult to define, cartels have historically been easy to recognize.

The application of the cartel concept has been restrained by a number of factors. The focus on prosecuting cartels originated and was historically centered in the United States, where the cartel rules are enforced within a criminal law framework. It is almost inherent in criminal law enforcement that the legal norms that businesses and individuals have …

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