The Deterrent Effect of National Anti-Cartel Laws: Evidence from the International Vitamins Cartel

During the 1990s the European Commission and the United States Department of Justice between them prosecuted over 40 cartels that involved private firms and whose effects went beyond national borders. These private international cartels were found in a wide range of products - from citric acid, vitamins, newsprint, and fax paper to shipping and chemicals such as aluminium phosphide and sodium gluconate. Furthermore, these cartels tended not to collapse under the weight of their own incentive problems, as 24 of them lasted at least 4 years. The latter fact suggests that market forces alone may be unable to quickly undermine attempts to fix prices, rig bids, allocate quotas and market shares; perhaps implying a potential role for national anticartel enforcement.