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Cartels

Overview

Overview Procedures: anticompetitive practices

Action against cartels is a specific type of antitrust enforcement. A cartel is a group of similar, independent companies which join together to fix prices, to limit production or to share markets or customers between them.

Instead of competing with each other, cartel members rely on each others' agreed course of action, which reduces their incentives to provide new or better products and services at competitive prices. As a consequence, their clients (consumers or other businesses) end up paying more for less quality.

This is why cartels are illegal under EU competition law and why the European Commission imposes heavy fines on companies involved in a cartel.

Since cartels are illegal, they are generally highly secretive and evidence of their existence is not easy to find. The 'leniency policy' encourages companies to hand over inside evidence of cartels to the European Commission. The first company in any cartel to do so will not have to pay a fine. This results in the cartel being destabilised. In recent years, most cartels have been detected by the European Commission after one cartel member confessed and asked for leniency, though the European Commission also successfully continues to carry out its own investigations to detect cartels.

Since 2008 companies found by the Commission to have participated in a cartel can settle their case by acknowledging their involvement in the cartel and getting a smaller fine in return.

See also: