The War on Cartels and the Social Meaning of Deterrence

Regulation & Governance, 2013, 7(2), 174-194 (advance access version published online 16 October 2012, DOI: 10.1111/j.1748-5991.2012.01165.x).

Monash University Faculty of Law Legal Studies Research Paper

21 Pages Posted: 30 Apr 2013 Last revised: 20 Feb 2014

See all articles by Christine Parker

Christine Parker

Melbourne Law School, University of Melbourne

Date Written: March 28, 2011

Abstract

The global war on cartels has had much success in introducing tough sanctions for cartel conduct, such as price fixing and market sharing. The policy rhetoric justifying criminalization assumes that compliance can be induced through deterrence. This in turn assumes that business people know about the law, believe that they are likely to be caught and face enforcement action and jail if they break the law, and calculate that they should comply. This paper problematizes these policy assumptions using evidence from a survey of a random sample of Australian business people and in-depth interviews with 25 cartelists. This paper argues that business people’s knowledge about the law is less important than their relationship with (or distance from) the law. Corporate elites see themselves as intimate with the law and therefore able to strategically ‘play’ the law; while small business people and managers lower down the corporate hierarchy see themselves as ‘innocent’ of any knowledge of the law. The impact of a policy of increased sanctions for misconduct cannot be understood solely in terms of marginal difference in aggregate levels of deterrence. It must also be understood in terms of how it interacts with people’s experience of the law to create and maintain or contest and destabilise social segmentation and inequality.

Keywords: antitrust, cartels, deterrence, regulation, compliance, trade practices, australian competition and consumer commission, price fixing

JEL Classification: A14, D63

Suggested Citation

Parker, Christine, The War on Cartels and the Social Meaning of Deterrence (March 28, 2011). Regulation & Governance, 2013, 7(2), 174-194 (advance access version published online 16 October 2012, DOI: 10.1111/j.1748-5991.2012.01165.x)., Monash University Faculty of Law Legal Studies Research Paper, Available at SSRN: https://ssrn.com/abstract=2257642 or http://dx.doi.org/10.2139/ssrn.2257642

Christine Parker (Contact Author)

Melbourne Law School, University of Melbourne ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

HOME PAGE: http://law.unimelb.edu.au/about/staff/christine-parker

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