Tuesday, October 12, 2010
How Are Cartels Detected? The Increasing Use of Proactive Methods to Establish Antitrust Infringements
Posted by D. Daniel Sokol
Kai Hüschelrath, ZEW Centre for European Economic Research, Department for Industrial Economics and International Management, Mannheim, Germany asks How Are Cartels Detected? The Increasing Use of Proactive Methods to Establish Antitrust Infringements.
ABSTRACT: Hard core cartels impose significant harm on society and therefore competition authorities around the world are increasingly active in their fight against these conspiracies. Competition authorities typically rely on both ex ante and ex post instruments to reduce the incentives to form cartels and to increase the probability that existing cartels are detected. Although reactive methods to detect cartels (such as complaints) still play the dominant role in practice, there are signs that competition authorities increasingly apply proactive detection tools. The three-step market screening method described in this note is not unlikely to become part of an efficient and effective overall cartel enforcement strategy.