cartels power

7/28/2019 cartels power

1/84


2/84


3/84

OUTLINE Part 1: Number, Size, and Industries

Part 2: Cartel Detection Part 3: Internal Structures of Cartels

SLIDES

4-11

13-2324-3031-54

Part 5: Individual Sanctions Part 6: Market Effects and Damages

Sources

55-6766-7980


4/84

PART 1 Numbers and sizes of cartels and their

participants. Industry characteristics


5/84


6/84

Numbers of Corporate Cartelists At least 5900 companies in total About 2900 ultimate parent companies known

by name and location*

A out 3000 more compan es mp cate , utare anonymous Almost 2400 have been fined*

* Some double counting of recidivists


7/84

Numbers of Cartel ExecutivesFined or Imprisoned

At least 373 individual, named executives havebeen penalized

Hundreds more were guilty but given

Thousands more were guilty but notprosecuted


8/84


9/84

Huge Increases in Known Affected Salesby International Cartels , 1990-2008

10

12

14

16

0

2

4

6

8

1990-94 1995-99 2000-04 2005-08

$ Trillion

Note: in $2008 dollars, sales are at least treble the nominal (current) dollars shown.


10/84


11/84

GENERAL CARTEL INDUSTRIES 17 agricultural or mining raw materials 202 intermediate industrial materials 21 industrial capital goods

32 undifferentiated consumer goods 37 differentiated consumer goods

155 business or consumer services


12/84

LEADING CARTEL INDUSTRIES

ConstructionTransport services

Cement, graphite, glassDistribution

Food & Tobacco Mfg.Organic Chemicals

No.

0 20 40 60 80 100 120

Paper & printingBanking & Insurance

Telecom servicesMetals

Inorganic ChemicalsRubber & plastic

MachineryInstruments & Misc.

Other services

Number of cartels 1990-2008


13/84


14/84

International Cartels Are NowBeing Assaulted on All Fronts

Indictments in the US and Canada peaked in

the late 1990s (with the 16 vitamins cartelsplaying a major role). The ECs cases are risin but without

settlements the rise in numbers is small. The EUs National Competition Authorities

(NCAs) are now the biggest prosecutors. Asia (=Korea) is becoming a cartel tiger. Of late, So. Africa and Brazil are active also.


15/84

Rate of Discovery AreEight Times Higher in 2005-08

30

40

5049.3

d p e r y e a r

0

10

20

1990-94 1995-99 2000-04 2005-08

6.2

Year of Discovery of All International Cartels

N u m

b e r

d e t e c t


16/84

Rates of Discovery of Global CartelsAre Rising Slowly

5

6

7

8

9

8.0

0

1

2

3

4

1990-94 1995-99 2000-04 2005-08

Number per year

1.6

Global cartels affected prices in two or more continents


17/84

Rates of Discovery by theEuropean Commission Rise Steadily

4

5

6

1.8

2.4

3.6

5.5

0

1

2

3

1990-94 1995-99 2000-04 2005-08

cartels


18/84

Cartel Detections by the EUs NCAsSurpass All Others since 2000

12

14

16

18

20

02

4

6

810

1990-94 1995-99 2000-04 2005-08

Detections


19/84

Cartel Detections by theUS and Canada Are Stalled

3

3.5

4

4.5

5

00.5

1

1.5

22.5

1990-94 1995-99 2000-04 2005-08

Detections


20/84

Asian Anti-Cartel Enforcement (Especially Korea)Is Accelerating

6

7

8

9

01

2

3

4

1990-94 1995-99 2000-04 2005-08

Detections


21/84

Cartel Detections in Africa and LatinAmerica Are Modest but Significant

5

6

7

0

1

2

3

1990-94 1995-99 2000-04 2005-08

Detections


22/84

Despite Heavier International Cartel

Penalties, More Companies AreBecoming Cartelists

More than 2400 instances of corporateparticipation have been identified, and at

least 1620 have been fined during 1990-2008.


23/84

Number of Corporate Cartelists Is Rising

1500

2000

t e p a r t i c i p a t i o n s

0

500

1000

1990-94 1995-99 2000-04 2005-08

N u m

b e r o

f c o r p o r

Year cartel was detected


24/84

Part 3:Internal Structures of Cartels


25/84

Number of Companies per Cartel Steady

8

10

12

r p o r a t i o n / c a r t e

l

0

2

4

6

1990-94 1995-99 2000-04 2005-08

A v e r a g e N u m

b e r o f

c


26/84

Number of Companies in Cartels,1990-2008 Total

15

20

0

5

10

2 3 4 5 6 7 8 9 10

percent

Number of corporate participants


27/84

Duration of All International Cartels Falling

102

83100

150

a v e r a g e

57

0

50

1990-95 1996-99 2000-03 2004-07

M o n t h s o n


28/84

Duration of Global-Scope InternationalCartels

141

80 84100

150

e r a g e

0

50

1990-95 1996-99 2000-03 2004-07

M o n t h s o n

a

Note: Global cartels operated in multiple continents


29/84


30/84

Duration of International Cartelsin Asia

100

150

e r a g e

2431

50

0

50

1990-95 1996-99 2000-03 2004-07

M o n t h s o n

a


31/84

PART 4 Cartel fines and private settlements are about

equal and exceed $60 billion combined. The undisputed leader in fines the DOJ has

. EC fines exceeded the DOJs after 1999. Over 4300 companies investigated

Over 1500 companies penalized Over 370 executives fined or imprisoned


32/84

Penalties on International CartelsTotal $ 61.2 Billion (1990-2008)

25

30

35

0

5

10

15

Govt. Fines Private Settlements

USD


33/84

Penalties on International CartelsAre Surging

30

35

40

45

50

05

10

15

2025

1990-94 1995-99 2000-04 2005-08

$ Billion


34/84

Government Fines Imposed onInternational Cartels Total $ 32.9 Billion

12

14

16

18

02

4

6

8

EC NCAs Other US Canada

$ Billion


35/84

Penalties Are Rising in All Jurisdictions

10152025

1990-94 B i l l i o n

1990-941995-992000-04

-

05

1995-992000-04

2005-08

$


36/84

Number of Corporations Fined,U.S. Dept. of Justice, 1990-2008

50

60

70

80

0

10

20

30

40

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

DomesticIntl


37/84

International Cartel Fines Collected,U.S. Dept. of Justice, 1990-2008

800900

10001100

12001300

Total $5.4 billion

0100

200300400500600

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

Year First Member of Cartel Is Fined

$ M i

l l i o


38/84

International Cartel Fines/Total Collected,U.S. Dept. of Justice, 1990-2008

500

600

700

800

0

100

200

300

400

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

Fiscal years (DOJ) and calendar years do not match

P e r c e n t


39/84

International Cartel Fines/Total Collected,U.S. Dept. of Justice, 1990-2008

100

120

140

160

n t

0

20

40

60

80

1990-94 1995-99 2000-04 2005-08

Fiscal years (DOJ) and calendar years (Intl.) do not match: FIX?

P e r c e


40/84

Number of Cartel Decisions ,European Commission, 1990-2008

10

12

14

16

Total 90

i s i o n s

0

2

4

6

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

Year of Decision

N u m

b e r o f D e


41/84

Number of Companies in EuropeanCommission Decisions, 1990-2008

50

60

70

80Total 598 Firms

p a n i e s

0

10

20

30

40

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

Year of Decision

N u m

b e r o f C o


42/84

Number of Adverse Decisions aboutIntl. Cartels, EC and DOJ, 1990-2008

10

12

14

16

0

2

4

6

8

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

ECDOJ

[Add individual cases for US]


43/84


44/84

International Cartel Fines Collected,EC and DOJ Compared, 1990-2008

2500

3000

3500

4000

0

500

1000

1500

2000

1 9 9 0

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

EC

DOJ

Year First Member of Cartel Is Fined


45/84

Intl. Cartel Fines Collected by NCAs(EUs National Authorities) 1990-2008

800

1000

1200

1400

Total $6.2 billion

0

200

400

600

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

$ Mil.

Year of Decision


46/84

Intl. Cartel Settlements in the US

1990-2008

6000

70008000

9000

10000

Total $26.4 billion

0

1000

2000

30004000

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

$ Mil.

Year of Major Settlement


47/84

Total International Cartel Penalties,

EU and U.S. Compared, 1990-2008

8000

10000

12000

US total $32 billionEU total $22 billion

0

2000

4000

6000

1 9 9 0

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

all EUall US

$ m i l l i o n

h l


48/84

Other Government Fines on International

Cartels Exceed $5 Billion

2500

3000

3500

4000

n

0

500

1000

1500

US AGs Korea Africa LatinAmerica

Other Asia Oceania

$ M

i l l i

M P i C l S l A i h


49/84

Most Private Cartel Settlements Are with

Direct Buyers in the US

20

25

30

0

5

10

15

US Direct US Indirect Canada Other

$ B i

l l i o


50/84

Over 4300 Companies Investigated

1500

2000

2500

n e s

0

500

1000

1990-94 1995-99 2000-04 2005-08

N u m

b e r o

f F i

At Least 94 Amnesties for


51/84

At Least 94 Amnesties forInternational Cartels Granted

43

37

n e s t i e s

9

2 2

US EU Canada EU States Asia

N u m

b e r o

f A

Corporate Cartelists Are from


52/84

Corporate Cartelists Are from

57 Nations

E. Europe

Asia

W. Europe

0 3 6 9 12 15 18

US & Canada

Africa

Oceanea

.Nations

NUMBER OF NATIONS

Corporate Penalties Are Mostly Paid


53/84

Corporate Penalties Are Mostly Paid

by W. European Companies

6.7

11.0

36.2

Asia

US & Canada

W. Europe

0.05

0.11

0.2

0.38

Australia

E. Europe

Lat. America

Africa

$ Billion

Note : Western European international cartelists account for 66.3% of the total.

Most Penalized Corporations Are


54/84

Most Penalized Corporations Are

Headquartered in Western Europe

DutchJapanese

ItalianFrench

GermanUS

0 50 100 150 200 250

SwedishHungarian

SpanishBelgian

SwissKorean

NB : Western European cartelists account for 61.8% of the total of 1511.

Corporate Headquarters


55/84

Corporate Headquarters

of Non-European Penalized Firms

217

251

Asia

US & Canada

Number of Companies

16

18

50

44

Australia

Africa

Lat. America

E. Europe

NB : Non-Western European cartelists account for 38.2% of the total of 1511.


56/84

PART 5: Individual Sanctions DOJ prison sentences are more severe

Fines on executives are insignificant

Number of Executives Penalized


57/84

Number of Executives Penalized

by Nationality, International Cartels

EgyptJapan

Australia

GermanyUS

0 20 40 60 80 100 120

FranceCanada

NetherlandsSo. KoreaIsrael

NB : Totals 374, including a few anonymous cartelists.

Number of Executives Charged and


58/84

Number of Executives Charged and

Penalized by the DOJ per Year

60

70

80

90

CHARGED

FINED

0

10

20

3040

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

PRISON

Poly. (CHARGED)

Poly. (FINED)

Poly. (PRISON)

Proportion of Charged Persons


59/84

Proportion of Charged Persons

Fined or Imprisoned by DOJ

60

80

100

t % FINED

0

20

40

1990 1994 1998 2002 2006

P e r c e n

% PRISON

Poly. (% FINED)

Poly. (% PRISON)

Proportion Fined/Charged


60/84

Proportion Fined/Charged,

Individual Price Fixers, US, 1990-2008

60

7080

90

010

20

30

40

50

1990-94 1995-99 2000-04 2005-08

All Cartels

International P E R C E N T

Proportion Imprisoned/Charged


61/84

Proportion Imprisoned/Charged,

Individual Price Fixers, US, 1990-2008

50

6070

80

010

20

3040

1990-94 1995-99 2000-04 2005-08

All Cartels

International P E R C E N T

Mean US Prison Sentences for


62/84

All Price Fixers, 1990-2008

20

25

30

35

R P E R S O N

0

5

10

15

1990sAvg.

2000 2001 2002 2003 2004 2005 2006 2007 2008

(NB: 2008 Workforce Stats due out early 2009)

M O N T H P

Mean Length, US Prison Sentences


63/84

g ,

for All Price Fixers, 1990-2008

20

25

30

35

P E R P E R S O N

0

5

10

15

1990 1993 1996 1999 2002 2005 2008

M O N T H S

Mean Length, US Prison Sentences for


64/84

g ,

International Price Fixers, 1990-2008

25

3035

40

45

P E R P E R S O N

0

5

10

15

20

1990 1993 1996 1999 2002 2005 2008

NB: The median of 104 international cases is 10 months (2008 has partial data)

M O N T H S

Average US Fines/Person for


65/84

Price Fixers, 1990-2008

1000

10000

P E R P E R S O N

1

10

100

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

All Cartels

International

L O G o

f $ 0 0 0

Mean US Fines/Person for


66/84


600

700

800

900

R S O N

0

100

200

300400

1990-94 1995-99 2000-04 2005-08

All Cartels

International

$ 0 0 0 P E R P

Note: The median 1990-2008 international fine is $100,000


67/84

Mean US Fines/Person for


68/84


600

700

800

900

R S O N

0

100

200

300400

1990-94 1995-99 2000-04 2005-08

All Cartels

International

$ 0 0 0 P E R P

Note: The median 1990-2008 international fine is $100,000


69/84

Mean Penalties on Global Cartels,


70/84

Relative to Affected Sales, 1990-2008 (%)

25

30

35

a l e s

( % )

0

5

10

15

EU US Canada Private World

Median

Mean

P e n a l t i e s / A

f f e c t e

d

Severity of EU and US Median


71/84

Penalties, Non-Global Cartels (%)

12

1416

18

20

a l e s

( % )

0

2

4

6

8

10

1990-94 1995-99 2000-04 2005-08

EU

US DOJPrivate

P e n a l t i e s / A

f f e c t e

d

NB. Includes consent decrees, warnings, other zero dollar penalties

Severity of EU, US & Canadian


72/84

Mean Fines, Global Cartels

20

25

30

d S a

l e s

( % )

0

5

10

15

1990-94 1995-99 2000-04 2005-08

F i n e s

/ A f f e c t

US

Canada


Severity of Median Private


73/84

Settlements, Global Cartels

121416

1820

t e d S a

l e s ( % )

0

2468

1990-94 1995-99 2000-04 2005-08

P e n a

l t i e s / A

f f e Private

Avg. US&EU


EU, US & Canada: Severity of


74/84

Median Fines, Global Cartels

12

1416

18

20

t e d S a

l e s

( % )

0

2

4

68

10

1990-94 1995-99 2000-04 2005-08

P e n a

l t i e s / A

f f e

US

Private US

NB. Excludes consent decrees, warnings, other zero dollar penalties

Severity of Mean Private Settlements,


75/84

Global Cartels

25

3035

40

45

e c t e

d S a

l e s

( % )

0

5

10

15

20

1990-94 1995-99 2000-04 2005-08

S e t t

l e m e n t s / A

f r va e

Avg. US+EU


EU, US & Canada: Severity of


76/84

Mean Fines, Global Cartels

20

25

30

d S a

l e s ( %

)

0

5

10

15

1990-94 1995-99 2000-04 2005-08

F i n e s

/ A f f e c t

US

Canada

NB. Excludes all zero-dollar penalties

Severity of Median Private


77/84

Settlements, Global Cartels

15

20

25

t e d S a

l e s ( % )

0

5

10

1990-94 1995-99 2000-04 2005-08

P e n a

l t i e s / A

f f e Private

Avg. US&EU


EU, US & Canada: Severity of Median


78/84

Fines, Global Cartels

10

1214

16

18

d S a

l e s

( % )

0

2

4

6

8

1990-94 1995-99 2000-04 2005-08

F i n e s / A f

f e c t

US

Canada


Mean Private Settlement Intensities,


79/84

Global Cartels (%)

25

3035

40

45

f f e c t e

d S a

l e s

0

5

10

15

20

1990-94 1995-99 2000-04 2005-08

S e t t

l e m e n t s

/ r va e

Avg. US+EU


MEDIAN LAGS: From Investigation to First Sanction,


80/84

All Cartels, 1990-2008

21.56

33.336.41

30

40

h s

1 .7

0

10

20

US DOJ Canada EC Other Govt.

M o n t

Excludes secret investigations

MEDIAN LAGS: From Investigation to First Sanction,


81/84

Global Cartels, 1990-200837.75

32.58

23.7625

30

35

40

h s

18.98

0

5

10

15

20

US DOJ Canada EC Other Govt.

M o n t

Excludes secret investigations

MEDIAN INVESTIGATION LENGTH,


82/84

US DOJ, 1990-200832.82

20.9825

30

35

h s

8.57

17.15

0

5

10

15

1990-94 1995-99 2000-04 2005-08

M o n t

Year the first cartelist was fined

Transparency of International Cartel


83/84

Investigations, 1990-2008

61% 57%

73%68%

100%

o w n B e f o r e D e c i s i o n s

0%

50%

U.S. DOJ Canada EC Other Europe S h a r e o

f I n v e s t i g a t i o n s K

Sources


84/84

John M. Connor. Private International Cartels: Full Data. [The PICsspreadsheet, first created about 1998, is continuously updated. As of November 2008, the combined (Full Data) spreadsheet was a file of 4.75MB

and consisted of 3767 observations of 498 cartels and 4090 cartelists(companies and individual participants) with 810,000 cells of data. There arealso 13 back-up spreadsheets.]

-. . .late 2007 and completed in early 2008. Contains annual budgets, activities,

and enforcement actions with respect to cartels.] John M. Connor and Gustav Helmers. Statistics on Modern Private

International Cartels: Working Paper 07-01. Washington, DC: AmericanAntitrust Institute (January 2007).[http://www.antitrustinstitute.org/recent2/567.pdf]

John M. Connor. Cartel Amnesties Granted: Worldwide Whistleblowers SSRNWorking Paper (October 2008). [at SSRN: http://ssrn.com/abstract=1285469 ]

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