John Connor

Purdue University | Purdue · Department of Agricultural Economics

The consensus among experienced antitrust lawyers and from abstruse economic studies is that the great majority of cartels operate clandestinely their entire lives. John Connor (Purdue Univ.)

This paper describes the sources and methods used to create the PIC data set, which the author believes to be the largest collection of legal-economic information on contemporary price-fixing cartels. It details the scope, strengths, and limitations of the data therein. Finally, summary descriptive statistics are developed for cartels detected duri...

In this journal, James Langenfeld critically reviewed four of the present authors’ articles that analyze the size of cartel overcharges and their antitrust policy implications. In this comment, we explain why we believe Langenfeld errs in his criticism of our work. In particular, this comment discusses the variation in research quality of the sourc...

After years of being regarded as an environmental and consumer-protection issue, the German diesel-motor emissions scandal has suddenly morphed into an antitrust case. Press reports indicate that at least five German auto or auto-parts makers are under investigation by European competition-law authorities.1 In this comment, I focus on the historica...

Amicus brief to Supreme Court supporting petitioners with regard to anticompetitive practices by American Express.

Expert opinion of antitrust practitioners is divided as to whether U.S. courts hand down more severe sentences on foreigners guilty of criminal price fixing compared to U.S. cartelists. The opinions in support of discrimination appear to be based on a small number of sentences imposed in quite recent international cartels. In this note, I analyze...

This note provides extracts and a discussion of the data in the Private International Cartels (PIC) data set. PIC is a large sample of legal-economic information on private international “hard-core” cartels. The text below summarizes selected cartel statistics from the July 2016 edition of PIC, i.e., cartels investigated and prosecuted over the pas...

This paper describes the sources and methods used to create the PIC data set, which the author believes to be the largest collection of legal-economic information on contemporary price-fixing cartels. It details the scope, strengths, and limitations of the data therein. Moreover, summary descriptive statistics are developed for the 1990-2016. A few...

This paper examines the rise of cartel enforcement in Europe, North America, and the Rest of the World (ROW) over the past 25 years in greater detail and with more indicators than previous publications. I find that in the past decade the ROW antitrust authorities have made extraordinarily rapid progress in punishing international price-fixing. Th...

Data on injuries to customers worldwide from convicted international cartels.

Abstract Closing the loopholes of downstream application of the Capper-Volstead exemption in the food system and pay-for-delay in pharmaceuticals is an important advance in US and EU antitrust norms. First, pay-for-delay conduct has been harmful for pharmaceuticals customers. After ten years of litigation that divided circuit courts, the Supreme Co...

Iowa Law Review, Forthcoming. Available at SSRN: http://ssrn.com/abstract=2548712 Abstract: law provides treble damages for victims of antitrust violations, but the vast majority of private cases settle. The average or median size of these settlements relative to the overcharges involved has, until now, been only the subject of anecdotes or specula...

Canada's Competition Bureau has been a highly rated competition-law enforcer. Previously published assessments of its anti-cartel efforts tend to heap praise on the authority. Yet its antitrust performance in the past decade or so has flagged. A quantitative assessment of several dimensions of outcomes made of the Bureau's anti-cartel enforcement a...

Closing the loopholes of downstream application of the Capper-Volstead exemption in the food system and pay for delay in pharmaceuticals is an important advance in US and EU antitrust norms. First, pay-for-delay conduct has been harmful for pharmaceuticals customers. After ten years of litigation that divided circuit courts, the Supreme Court decre...

My information on the construction cartels that have plagued Québec’s municipal and provincial governments is mostly limited to what has appeared in Canada’s lively press. The intersection of business malpractice, organized crime, physical intimidation, and payoffs to political powers is, of course, deplorable. Unfortunately, from an historical poi...

This note describes the sources and methods used to create the PIC data set, which the author believes to be the largest collection of legal-economic information on contemporary price-fixing cartels. It details the scope, strengths, and limitations of the data therein. Moreover, summary descriptive statistics are shown for the years 1990-2013. A fe...

Many jurisdictions fine illegal cartels using penalty guidelines that presume an arbitrary 10% overcharge. This article surveys more than 700 published economic studies and judicial decisions that contain 2,041 quantitative estimates of overcharges of hard-core cartels. The primary findings are: (1) the median average long-run overcharge for all ty...

A concise, nontechnical overview of theory, studies, and policies surrounding private international cartels.

Many jurisdictions fine illegal cartels using penalty guidelines that presume an arbitrary 10% overcharge. This paper surveys more than 700 published economic studies and judicial decisions that contain 2,041 quantitative estimates of overcharges of hard-core cartels. The primary findings are: (1) the median average long-run overcharge for all type...

The amino-acid lysine cartel was a watershed even in antitrust enforcement. It was the first global price-fixing conspiracy to be convicted by U.S. or EU antitrust authorities in 40 years. This paper presents an updated narrative of the history of the global lysine cartel and the legal consequences for its members in the United States. The story fo...

This paper assembles information from around the world of investigations and the resulting penalties imposed on price-fixing banking cartels (and similar violations) on the world’s largest corporate banks and their employees. I find that there have been more than 400 instances of large banks involved in at least 63 separate illegal conspiracies to...

For criminal violations of the Sherman Act, although guided by federal sentencing guidelines, U.S. Department of Justice has great latitude in recommending corporate cartel fines to the federal courts, and its recommendations are nearly always determinative. In this paper, we analyze the determinants of variation in size of criminal fines imposed b...

The dark side of globalization: profits vanished for dominant national producers, so they formed cartels to restore historical profits. The rise of Global Cartels in the early 20th century makes customers vulnerable to price injuries through importation. Global cartels make monopoly profits in every part of the world they fix prices, but even today...

In this paper we model cartel duration as a mixed proportional hazard model and condition on cartel characteristics such as the agency first detecting the cartel, industry, if it is a bid rigging or price fixing cartel, the number of countries affected, the affected sales, and measures of the economic cycle and trend. Results are intuitive and fair...

In this paper, we estimate quantitatively the determinants of variation in administrative fines imposed on companies by the European Commission for price-fixing violations. Estimates from our behavioral model provide the first direct test of the predictive power of the optimal deterrence theory of antitrust violations in the EU. In addition, they o...

In this paper, we estimate quantitatively the determinants of variation in administrative fines imposed on companies by the European Commission for price-fixing violations. Estimates from our behavioral model provide the first direct test of the predictive power of the optimal deterrence theory of antitrust violations in the EU. In addition, they o...

This is an interim report on what has been called “the largest criminal investigation the Antitrust Division has ever pursued.” It provides preliminary information on the nature of the allegations, the global scope of the investigations, and the magnitude of damages.

This article is the first to analyze whether cartel sanctions are optimal. The conventional wisdom is that the current level of sanctions is adequate or excessive. The article demonstrates, however, that the combined level of current United States cartel sanctions is only 9% to 21% as large as it should be to protect potential victims of cartelizat...

This article analyzes the first 22 cartel decisions of the European Commission under its 2006 revised fining Guidelines. I find that the severity of the cartel fines relative to affected sales is about double that of the fines decided under the previous 1998 Guidelines. Severity varies only modestly across companies in the same cartel. A large mino...

In 2012 the global struggle to suppress price-fixing cartels reached a milestone. For the first time, U.S. monetary penalties exceeded $50 billion and worldwide antitrust penalties surpassed $100billion.This paper describes trends in private recoveries and their role in deterring cartels. The mainfindings are:• Recoveries of cartel damages occur ov...

Cartels are illegal in India, as they are almost everywhere. They are subject to heavy fines. Why, then, do businesses frequently try to fix prices? Because doing so usually is profitable. On average cartels raise prices by more than 20%, and probably face less than a 25% chance of being caught and convicted. Based upon a sample of 75 international...

For criminal violations of the Sherman Act, although guided by federal sentencing guidelines, the U.S. Department of Justice has great latitude in recommending corporate cartel fines to the federal courts, and its recommendations are nearly always determinative. In this article, we analyze the determinants of variation in size of criminal fines imp...

Around the year 2000, the Antitrust Division announced a new policy that would substitute more frequent and more severe prison sentences for heavier corporate fines in criminal cartel cases. This article documents that the Division has indeed imprisoned more cartel managers and obtained longer sentences, but has failed to achieve other goals. The e...

The following charts illustrate the global size and economic impacts of the modern international cartel movement and the enforcement responses of the world’s antitrust authorities and national courts. The sample encompasses 640 private hard-core cartels that were subject to government or private legal actions (i.e., formal investigations, damages s...

The following charts illustrate the global size and economic impacts of the modern international cartel movement and the enforcement responses of the world’s antitrust authorities and national courts. The sample encompasses 640 private hard-core cartels that were subject to government or private legal actions (i.e., formal investigations, damages s...

The following charts illustrate the global size and economic impacts of the modern international cartel movement and the enforcement responses of the world’s antitrust authorities and national courts. The sample encompasses 640 private hard-core cartels that were subject to government or private legal actions (i.e., formal investigations, damages s...

The following charts illustrate the global size and economic impacts of the modern international cartel movement and the enforcement responses of the world’s antitrust authorities and national courts. The sample encompasses 640 private hard-core cartels that were subject to government or private legal actions (i.e., formal investigations, damages s...

This paper analyzes the first 13 cartel decisions of the European Commission under its 2006 revised fining guidelines. I find that the severity of the cartel fines is more than five times higher than those figured under the previous 1998 Guidelines. For the first time in antitrust history, I believe we are observing fines that regularly disgorge th...

This chapter examines anti-cartel enforcement in selected jurisdictions around the world, paying particular attention to the role of private court actions in attaining optimally deterring sanctions. The principal conclusions are as follows. There are numerous indicators that enforcement in North America comes closest to optimal deterrence of illega...

The objective of this paper is to look for empirical regularities in the sample of 389 recidivists that engaged in international price-fixing in the past 20 years. Recidivism appears to be increasing rapidly, both in number and relative to all corporate cartelists. Recidivists are overwhelmingly headquartered in northern Europe or Japan, and they t...

The objective of this paper is to look for empirical regularities in the sample of 389 recidivists that engaged in international price-fixing in the past 20 years Recidivism appears to be increasing rapidly, both in number and relative to all corporate cartelists Recidivists are overwhelmingly headquartered in northern Europe or Japan, and they ten...

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Legal opinion is divided on whether predicable sentences are a good thing for the administration of justice. In the case of cartel violations, both the United States and the EU have introduced guidelines for calculating fines that are intended to make fining decisions more transparent and to deter cartel formation. The research summarized in this p...

This paper surveys almost 600 published economic studies and judicial decisions that contain 1,517 quantitative estimates of overcharges of hard-core cartels, of which 8% are zero. The primary finding is that the median long-run overcharge for all types of cartels over all time periods is 23.3%. The median overcharge for international cartels (30.0...

An article by Ehmer and Rosati (ER) in expresses dissatisfaction with a view expressed in a speech by Commissioner Neelie Kroes. As a justification for the high cartel fines imposed on cartels during her administration, she contends that most economic research indicates that the average cartel overcharge is likely to be 20% to 25%. This article def...

Some lawyers and businesses have claimed that, because of an increase in the level of antitrust fines imposed by the European Commission in recent years, these fines have become criminal in nature, and that the current institutional and procedural framework in which fines are imposed by the European Commission, with subsequent judicial review by th...

The purpose of the following charts is to illustrate the size and economic impacts of the modern international cartel movement and the enforcement responses of the world’s antitrust authorities and national courts. These illustrations may serve heuristic purposes or show empirical regularities that suggest hypotheses worthy of testing in future res...

• The purpose of the following charts is to illustrate the size and economic impacts of the modern international cartel movement and the enforcement responses of the world’s antitrust authoritiesand national courts. These illustrations may serve heuristic purposes or show empirical regularities that suggest hypotheses worthy of testing in future re...

In this note, I assemble simple empirical evidence on the severity of monetary penalties on modern international cartels, focusing on whether there are systematic differences in severity between cases in which the government itself is the victim of overcharging versus cases where the brunt of the economic injuries are borne by businesses and consum...

This paper tells the story of the global lysine cartel of 1992-1995 and the subsequent U.S. federal prosecutions that followed. It focuses on how estimates of the cartel’s U.S. overcharges varied widely in the months prior to settlement with most of the smaller members of the class of plaintiffs and how additional data gathering and improved analyt...

This paper describes and analyzes the outcomes of cartel-whistleblower programs around the world, including those of the United States and Canada, which keep the identities of amnesty recipients secret before and after a case is closed. A total of at least 65 corporations have received full leniency from 16 antitrust authorities that made 110 amnes...

Replaced with revised version of paper 07/24/09.

International cartelists today face antitrust investigations and possible fines in a score of national and supranational jurisdictions. This article aims at providing quantitative information about the size and impacts of international cartel activity in Asia and uses a sample of modern private cartels to evaluate the relative effectiveness of thre...

We use extended ARCH and GARCH models to examine the differences in the behavior of the first two moments of the price distribution during collusive and competitive phases of two recently discovered conspiracies, citric acid and lysine. According to our results, the conspirators managed to raise prices by 9 and 25 cents per pound in the short-run r...

This chapter examines how high cartels raise prices on average and what this should mean for the current criminal fine levels in the U.S. Sentencing Guidelines. We utilize two distinct data sets (economic and other studies, and verdicts in final cartel cases) and find that cartels have caused average overcharges in the range of 31 to 49 percent and...

During its first three decades, the world lysine industry consisted of only three manufacturers protected by high technological barriers to entry. As the patented biotechnologies became more accessible, in the 1990s, seven other firms entered the market. Newer entrants tend to be experienced in marketing feed ingredients and have integrated their l...

This paper evaluates the effectiveness of the efforts of the Antitrust Division of the U.S. Department of Justice to detect, indict, and deter horizontal collusion during 1990-2007 and offers policy suggestions likely to improve that enforcement. Division leaders emphasize that collusion is the agency's number-one priority. Paradoxically, there is...

This paper models a key outcome of secret negotiations: “partial-leniency” fine discounts from plea bargaining in criminal price-fixing cases. Models tested explain up to 52% of variation in percentage discounts. A minor portion is explained by such defendants’ characteristics as the defendant’s rank in queue and delay in settling. Most variation i...

International cartelists today face antitrust investigations and possible fines in a score of national and supranational jurisdictions. This paper aims at providing quantitative information about the size and impacts of international cartel activity in Asia and uses a sample of modern private cartels to evaluate the relative effectiveness of three...

International cartelists face investigations, possible fines, and other monetary penalties in a score of national and supranational jurisdictions. Brazil, South Korea, Australia and several Member States of the EU have increasingly active anti-cartel agencies. However, the world still depends largely on the three jurisdictions with the greatest exp...

This paper is a comprehensive examination of the global bulk vitamins cartels of the 1990s. In terms of its precision and breadth of coverage, the quantitative information now available on vitamins surpasses that of almost any other modern cartel. For example, the internal records of the major defendants have yielded monthly transaction prices for...

Using a sample of modern international cartels, we analyze the level and determinants of cartel sanctions imposed on the participants of these cartels in a number of antitrust jurisdictions. There is empirical evidence suggesting that gains from collusive conduct outweigh its costs represented by cartel sanctions. While the average (median) overcha...

This article examines the nature of the effect of the U.S. Supreme Court's Empagran decision through the lens of the global vitamins cartel, using legal and economic analysis and also empirical data to describe the effect. The article commences with a discussion of the analytic approach adopted by the courts prior to the Empagran decision, with a f...

International cartelists today face antitrust investigations and possible fines from a score of national and supranational antitrust authorities. This paper provides quantitative information about the size and impacts of international cartel activity in Latin America and uses a sample of modern private cartels to evaluate the relative effectiveness...

Using the overcharge estimates for 333 cartel episodes, we evaluate the effect of cartel characteristics and changes in the market and legal environment on the magnitude of overcharges imposed by private cartels in the United States and other geographic markets as early as the eighteenth century. The median overcharge attained by cartels represente...

This paper aims at explaining accepted methods of forensic analysis and how forensic economics is used in the context of competition-law enforcement. Illustrations are drawn from ancient and modern antitrust cases involving price-fixing allegations. The stated goal of antitrust laws of most nations is deterrence. Optimal deterrence requires that ca...

When they were discovered in 1999, the 16 vitamins cartels were probably the largest, most harmful, and harshest sanctioned international cartels of the late 20th century. Still today, the vitamins cartels are cited by antitrust authorities as the outstanding example of an enforcement action likely to deter cartel formation; this episode is also of...

The book describes and analyzes the formation, operation, and impacts of modern global cartels. It provides a broad picture of the economics, competition law and history of international price fixing. A deeper understanding of the phenomenon is afforded by intensive case studies of collusion in the markets for lysine, citric acid, and vitamins. Par...

Using overcharge estimates for 395 cartel episodes from the 18<SUP>th</SUP> to the 21<SUP>st</SUP> century, we evaluate the impact of cartel characteristics on the size of overcharges imposed by cartels across several geographic regions and antitrust law regimes. The results of our study have important policy implications. We find that the average...

This Article examines whether the current penalties in the United States Sentencing Guidelines are set at the appropriate levels to deter illegal price fixing cartels optimally. The authors analyze two data sets to determine how high on average cartels raise prices. The first consists of every published scholarly economic study of the effects of ca...

The focus of this paper is on penalties imposed on modern private international cartels. I begin by showing that deterrence of recidivism of overt collusion is the overarching objective of the world's leading antitrust regimes, and I sketch the theory of optimal deterrence in the context conduct by hard-core cartels. Beginning in the late 1980s, fi...

This paper models a key outcome of secret negotiations: partial-leniency fine discounts from plea bargaining in criminal price-fixing cases. Models tested explain up to 52% of variation in percentage discounts. A minor portion is explained by such defendants characteristics as the defendants rank in queue and delay in settling. Most variation is ex...

This article examines the nature of the effect of the U.S. Supreme Court's Empagran decision through the lens of the global vitamins cartel, using legal and economic analysis and also empirical data to describe the effect. The article commences with a discussion of the analytic approach adopted by the courts prior to the Empagran decision, with a f...

This paper presents an updated narrative of the history of the global lysine cartel and the legal consequences for its members in the United States. The story focuses especially upon the role of economists in calculating the size of overcharges and how the estimates can affect the decisions of plaintiffs and defendants in private treble-damages lit...

This paper aims at explaining accepted methods of forensic analysis and how forensic economics is used in the context of competition-law enforcement. Illustrations are drawn from ancient and modern antitrust cases involving price-fixing allegations. The stated goal of antitrust laws of most nations is deterrence. Optimal deterrence requires that ca...

We use extended ARCH and GARCH models to examine the differences in the behavior of the first two moments of the price distribution during collusive and competitive phases of two recently discovered conspiracies, citric acid and lysine. According to our results, the conspirators managed to raise prices by 9 and 25 cents per pound in the short-run r...