Cartel Regulations 2017: Introduction

Cartel regulation involves the enforcement of antitrust laws that prohibit horizontal agreements between competitors to fix prices, manipulate bidding processes and otherwise divide the market, as well as the enactment of legislative policies to further dissuade collusive behaviour among competitors that directly controls or affects price.

Beyond price-fixing and bid rigging, cartels encompass practices such as allocating customers, geographic territories or particular markets and agreeing to predetermined output restrictions. In most jurisdictions, naked agreements to fix prices or other elements of competition that directly affect price are illegal per se. In Brazil, South Africa, Canada, the United Kingdom and the United States, price-fixing and other "hard-core" cartel violations can carry criminal penalties, while in other jurisdictions, including the EU and some Latin American countries, cartels are prosecuted as civil violations. Regardless of whether the enforcement regime is criminal, civil or administrative, cartels are generally regarded as the most pernicious antitrust violations and accordingly carry with them the stiffest penalties in the antitrust context. As a result, corporations that are the subject of cartel investigations face the possibility of significant monetary fines, compliance monitors and other serious penalties, and in some jurisdictions (eg, the United States), individuals indicted for their participation in cartels also face the possibility of monetary fines and incarceration.

Over the past decade, antitrust authorities around the world have the investigation and prosecution of cartels. Enforcers in Brazil, Chile, Colombia, the EU, the US and other countries have publicly expressed their governments' intensified focus on combating cartels, and China, Japan and Mexico have recently garnered attention for their intensified cartel enforcement activity.

While enforcement efforts vary from country to country, two universal themes have emerged globally: first, the amount of monetary fines imposed on companies, particularly in smaller jurisdictions, continues to increase, with fines in the first half of 2017 outpacing fines imposed in the first half of 2016 in several countries; and second, more jurisdictions are criminalising cartel behaviour by individuals in an effort to deter violations of antitrust laws in the future.

For the past few years, global cartel cases have dominated the news, as UK, US and EU enforcers...