Balancing the Conspiracy’s Books: Inter-Competitor Sales and Price-Fixing Cartels

51 Pages Posted: 24 Oct 2019

See all articles by Christopher R. Leslie

Christopher R. Leslie

University of California, Irvine School of Law

Date Written: 2018

Abstract

Antitrust law is designed to deter and dismantle price-fixing cartels. The success of the antitrust regime depends on courts being able to recognize price fixing and to hold price fixers accountable. Unfortunately, federal courts often do not appreciate the mechanics of cartelization, which leads judges to absolve price fixers of liability. This Article seeks to reduce the likelihood of that outcome by explaining how cartels use inter-competitor sales – sometimes called buybacks – as a mechanism to balance the cartel’s books. Until recently, all federal courts to consider the issue have held inter-competitor sales to be evidence of price fixing. Recently, however, the Third Circuit created a circuit split. With this circuit split as its frame, the Article explains why inter-competitor sales are inherently probative of collusion. Using a combination of economic analysis and empirical case studies, this Article examines the critical role that buybacks can play – and have played – in price-fixing conspiracies. This is the first law review article to focus on the relationship between inter-competitor sales and price-fixing conspiracies.

Suggested Citation

Leslie, Christopher R., Balancing the Conspiracy’s Books: Inter-Competitor Sales and Price-Fixing Cartels (2018). Washington University Law Review, Vol. 96, No. 1, 2018; UC Irvine School of Law Research Paper No. 2019-57. Available at SSRN: https://ssrn.com/abstract=3474676

Christopher R. Leslie (Contact Author)

University of California, Irvine School of Law ( email )

401 E. Peltason Drive, Suite 1000
Irvine, CA 92697-1000
United States
949-824-5556 (Phone)

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