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How to Fight Hard Core strongCartelsstrong Comments on Collusion in.pdf

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Journal of Industry, Competition and Trade, 5:3/4, 223–229, 2005 # 2005 Springer Science + Business Media, Inc. Manufactured in The Netherlands. How to Fight Hard Core Cartels? Comments on Collusion in Industrial Economics YOSUKE OKADA yookada@econ.hit-u.ac.jp Competition Policy Research Center, Japan Fair Trade Commission, Tokyo 100-8987, Japan Abstract. Industrial economics has successfully clariﬁed the mechanism of collusive conduct and its facilitating factors. But policy implications for remedial actions are less straightforward. This paper provides some supplementary comments from the viewpoint of enforcement issues against price-ﬁxing agreements. There are some disagreements among practitioners concerning the probative value of circumstantial (or economic) evidence. Information exchange may be a possible clue to elucidate the evidentiary standard. On the other hand, there seems to be a unanimous agreement, if appropriately designed, on the desirability of leniency programs. Necessity of leniency programs must be a reﬂection of stricter standard of proof in court decisions, resource constraints of antitrust enforcer, or increasingly defensive acts of conspirators. Keywords: collusion, antitrust, enforcement JEL Classiﬁcation: L13, L44 1. Introduction Individual incentive to deviate from a cooperative arrangement is a natural market force by which competition insures lower prices and higher output. The most important role of competition authority is to deter conspiracies to ﬁx prices or share markets. Feuerstein (2005) provides a lucid and comprehensive survey on collusion in industrial economics, and I would like to make some supplementary comments from the viewpoint of enforcement issues. As is succinctly summarized by Feuerstein (2005),