Competition and industries prone to endemic collusion

 

Serial offenders: Why some industries seem prone to endemic collusion

This full-day session looked at some sectors where endemic collusion is found and at the extent to which recidivism varies across sectors. It focussed on the following sectors: chemicals; construction services, including public tenders; cement and concrete; and food products. Economic theory has developed well-established guidelines on the factors that are considered conducive to collusion and could therefore help explain endemic collusion. These factors include market concentration, high entry barriers, a high ratio of fixed costs to variable costs, market transparency and frequent interaction among competitors that facilitate information sharing. Repeated collusion by the same companies could also have other explanations, such as the interplay between firm-specific factors and sector-specific factors. For instance there could be hysteresis effects: once cartels do form (perhaps because of sectoral characteristics), collusion becomes more accepted in the sector, so that cartels become more likely to form again, even after antitrust action.

Building on these factors, the session covered the (structural) characteristics of the four sectors and the reasons why (and if) serial collusion appears in these industries.

The session provided an opportunity to share experiences and discuss implications in terms of enforcement tools and priorities for competition authorities.

‌ 

SEE ALSO

Fighting corruption and promoting competition

Guidelines for fighting bid rigging in public procurement

Collusion and corruption in public procurement (2011, pdf)

Global Forum on Competition Home Page 

Competition Home Page

 

GLOBAL FORUM SESSION DOCUMENTATION

Full Global Forum Programme   

Call for contributions | Appel à contributions

Summary document: Detailed summary of the discussion

Background Note by Secretariat: English | Français

Contributions from participants 

Panellists, related papers and presentations

Brazil

Canada

Chinese Taipei

Greece PPT

Hungary

India

Indonesia PPT

Japan

Korea

Mongolia

Philippines

Russian Federation

Singapore

South Africa

Switzerland  Eng | Fre

Turkey

Ukraine

United States

BIAC

Joseph HARRINGTON, Jr. (Professor of Business Economics and Public Policy, The Wharton School, University of Pennsylvania) presentingThoughts on why certain markets are more susceptible to collusion and some policy suggestions for dealing with them ENG|FRAPPT

Robert C. MARSHALL (Distinguished Professor of Economics, Penn University) presenting Participation in multiple cartels through time ENG | FRA | PPT

Robert WILSON (partner in the Competition Practice at Webber Wentzel) presenting Endemic collusion in the South African construction industry: reasons & implications ENG | FRA PPT

Valerie SUSLOW (Professor, Vice Dean for Faculty and Research, Johns Hopkins Carey Business School) presenting Serial collusion in context: Repeat offenses by firm or by industry? ENG | PPT

 

Related Documents