Price-Fixing Overcharges: Legal and Economic Evidence

Abstract

This paper is a survey identified hundreds of published social-science studies of private, hardcore cartels that contained 674 observations of long-run overcharges. The primary finding is that the median cartel overcharge for all types of cartels over all time periods is 25%: 18% for domestic cartels, 32% for international cartels, and 28% for all successful cartels. In addition, a survey of 24 final verdicts in decided U.S. horizontal collusion cases reveals an average median overcharge of 21% and an average mean overcharge of 30%. Outside the United States, 62 decisions of competition commissions cited median average overcharges of 29% and a mean of 49%. These findings suggest that U.S. and non-U.S. cartel penalties ought to be increased. Despite the evident increases in cartel detection rates and the size of monetary fines and penalties in the past decade, a good case can be made that current global anticartel regimes are under-deterring.

Keywords: cartels, overcharges, international antitrust, penalties and fines