Murillo Campello, Daniel Ferrés, Gaizka Ormazabal, 07 September 2017

Strategies for cartel detection and prosecution differ across countries. This column uses a US dataset to show that independent directors of cartel-indicted firms favour the implementation of corrective actions in order to mitigate damage to their personal reputations. Firms with a larger fraction of independent directors on their boards observe smaller value losses and lower cartel duration during cartel-busting episodes.

Duarte Brito, Ricardo Ribeiro, Helder Vasconcelos, 28 September 2013

Horizontal acquisitions affect prices through two channels: by eliminating competition between the firms involved, and by changing the incentives for collusion in the affected industry. This column summarises recent research that quantifies these two effects using a new methodology – one that accounts for the difference between financial interests and corporate control. A study of the disposable-razor industry shows that small firms have the greatest incentive to undercut pricing agreements. After acquisitions, acquiring firms have greater incentives to collude, whereas other firms in the industry are more likely to defect.

Mario Mariniello, 22 September 2013

Cartel fines imposed by the European Commission routinely reach hundreds of millions of euro, having increased since the new 2006 fining policy. This column argues that they are still below their optimal level and come too slowly. Fines were often lower than the additional cartel profits and imposed 10 to 20 years after making the law-breaking decision was made – sometimes after the responsible managers had retired. To speed investigations, the Commission should Increase resources dedicated to inquiries; fines should also be raised.

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