Law Commons^™

Submission Of Robert H. Lande To House Judiciary Antitrust Subcommittee Investigation Of Digital Platforms, Robert H. Lande

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The House Judiciary Antitrust Subcommittee asked me to submit suggestions concerning the adequacy of existing antitrust laws, enforcement policies, and enforcement levels insofar as they impact the state of competition in the digital marketplace. My submission recommends the following nine reforms:

1. A textualist analysis of the Sherman Act shows that Section 2 actually is a no-fault monopolization statute. At a minimum Congress should enact a strong presumption that every firm with a 67% market share has violated Section 2. This would move the Sherman Act an important step in the right direction, the direction Congress intended in 1890. My …

Does Crime Pay? Cartel Penalties And Profits, John M. Connor, Robert H. Lande

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This article seeks to answer a fundamental antitrust question: does crime pay? Do the current overall levels of U.S. cartel sanctions adequately discourage firms from engaging in illegal collusion? Seven years ago our research showed that the unfortunate answer was clearly that, yes, criminal collusion usually is profitable! The expected costs (in terms of criminal fines and prison time, civil damages, etc.) was significantly less than expected gains to the price fixers. Sadly, the most recent data re-affirm this conclusion.

The great majority of companies participating in illegal cartels make a profit even after they pay all the penalties. The …

Price-Fixing: Hefty Penalties On Big-Biz Cartels Will Provide Level Playing Field To Small Businesses, John M. Connor, Robert H. Lande

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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 cartels, the authors calculate that the expected profits from price fixing almost always exceed the penalties. No wonder businesses often try to fix prices.

All Of The Economic Aid The U.S., Eu, And Japan Give To The Developing World Is Stolen Back By Our Illegal Price-Fixing Cartels, Robert H. Lande

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This compares the magnitudes of two forms of economic interaction between the developed and developing world. The first is the amount of economic foreign aid provided by the developed world to the developing world during a single year. The second is an estimate of the yearly amount that illegal price fixing cartels, comprised of companies from the U.S., the EU, and Japan, overcharge – steal! – from purchasers in these same countries. This comparison shows these amounts are roughly equivalent. If anything, cartels probably steal more from the developing world than the developed world gives them in economic assistance.

This …

Cartel Overcharges And Optimal Cartel Fines, John M. Connor, Robert H. Lande

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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 cartels on prices in individual cases. The second consists of every final verdict in a U.S. antitrust case in which a neutral finder of fact reported collusive overcharges. They report average overcharges of 49% and 31% for the two data sets, and median overcharges of 25% …

The Size Of Cartel Overcharges: Implications For U.S. And Ec Fining Policies, John M. Connor, Robert H. Lande

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The purpose of this article is to examine whether the current cartel fine levels of the European Union (EU) and the United States are at the optimal levels. We collected and analyzed the available information concerning the size of the overcharges caused by hard-core pricing fixing, bid rigging, and market allocation agreements. Data sets of United States cartels were assembled and examined. These cartels overcharged an average of 18% to 37%, depending upon the data set and methodology employed in the analysis and whether mean or median figures are used. Separate data sets for European cartels also were analyzed, which …

The Three Types Of Collusion: Fixing Prices, Rivals, And Rules, Robert H. Lande, Howard P. Marvel

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Collusion can profitably be classified into three distinct types. In our classification, "Type I" collusion is the familiar direct agreement among colluding firms (a cartel) to raise prices or, equivalently, restrict output. Alternatively, firms can collude to disadvantage rivals in ways that causes those rivals to cut output. We term this "Type II" collusion. Its indirect effect is an increase in market prices.

A number of important collusion cases neither direct manipulation of prices or output, nor direct attacks on rivals. Examples include Supreme Court cases such as National Society of Professional Engineers v. US, Bates v. State Bar of …