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The Great Global Vitamins Conspiracy: Sanctions and Deterrence

John M. Connor

Purdue University; American Antitrust Institute (AAI)

February 22, 2006

American Antitrust Institute Working Paper No. 06-02

When they were discovered in 1999, the 16 vitamins cartels were probably the largest, most harmful, and harshest sanctioned international cartels of the late 20th century. Still today, the vitamins cartels are cited by antitrust authorities as the outstanding example of an enforcement action likely to deter cartel formation; this episode is also often mentioned by other legal experts as an egregious example of cartels subject to supra-optimal penalties.

This paper summarizes the structural conditions and price effects of the global vitamins conspiracy and analyzes the deterrence power of world-wide monetary penalties paid by the corporate members of these cartels.1 The paper concludes that only in North America did monetary antitrust penalties exceed the monopoly profits of the vitamins cartel, principally because of huge private settlements. Penalties in the EU were a small percentage of European overcharges, and penalties in the rest of the world were negligible. On a global basis, deterrence was sup-optimal for three major reasons: low penalties outside North America, delays in the collection of fines and private settlements (i.e., the absence of court-awarded prejudgement interest), and the low probability of discovery of hidden cartels.

Superseded by SSRN Working Paper 1105338 and summarized in my book Global Price Fixing (2nd edition 2007).

Number of Pages in PDF File: 17

Keywords: antitrust, Cartel, collusion, price fixing, antitrust, optimal deterrence, chemicals, remedies

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Date posted: March 11, 2008 ; Last revised: April 11, 2014

Suggested Citation

Connor, John M., The Great Global Vitamins Conspiracy: Sanctions and Deterrence (February 22, 2006). American Antitrust Institute Working Paper No. 06-02. Available at SSRN: https://ssrn.com/abstract=1103604 or http://dx.doi.org/10.2139/ssrn.1103604

Contact Information

John M. Connor (Contact Author)
Purdue University ( email )
610 Purdue Mall
West Lafayette, IN 47906
United States
+1 317-733-1938 (Phone)
American Antitrust Institute (AAI)
1730 Rhode Island Avenue, NW
Suite 1100
Washington, DC 20036
United States
202-536-3408 (Phone)
HOME PAGE: http://www.antitrustinstitute.com
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