1. Serial Collusion by Multi-Product Firms
William E. Kovacic Robert C. Marshall Michael J. Meurer
July 23, 2018

2. Explicit collusion review
Central issue for a cartel is secret deviations
Structures are put in place to mitigate cheating
Pricing
Allocation
Enforcement
Amnesty is thought to be a great enforcement tool
Creates incentive for defection to avoid penalties

3. Some firms seem to be frequent colluders
Large multi-product firms
We only see detected collusion
No good estimate of how much collusion is undetected
Antitrust enforcers are focused on one cartel at a time
Colluding firms frequently dismiss collusion as the conduct of rogue managers
Are there advantages for a large multi-product firm in colluding across many products?
Is there a substantial social welfare concern?

4. Cartel participation durations for Akzo Nobel since 1955

5. Hypothetical duration chart

6. Cartel participation durations for BASF since 1955

7. Cartel participation durations for Bayer since 1955

8. Cartel participation durations for Solvay since 1955

9. Cartel participation durations for Arkema/Atofina since 1955

10. Cartel participation durations for Degussa since 1955

11. Cartel participation durations for Hoechst since 1955

12. Cartel participation durations for Rhone Poulenc Aventis since 1955

13. Cartel participation durations for Shell since 1955

14. Cartel participation durations for Fides/AC Treuhand since 1955

15. Cartel participation durations for Hitachi since 1980

16. Cartel participation durations for Samsung since 1980

17. Cartel participation durations for Mitsubishi since 1980

18. Cartel participation durations for Toshiba since 1980

19. Cartel participation durations for ICI since 1955

20. Cartel participation durations for Panasonic since 1980

21. Cartel participation durations for Atochem since 1955

22. Cartel participation durations for auto part firms since 1955
Auto part firms participating in three or more cartels

23. Cartel participation durations for financial firms since 2000
Firms participating in three or more cartels

24. Hypothetical table

25. Cartel involvement for chemical firms

26. Cartel involvement for electronics firms

27. Cartel involvement for auto part firms

28. Cartel involvement for financial firms

29. Rogue division managers? Seems unlikely
Repeated episodes of detected explicit collusion
Different time periods
Extended time periods
Reliance on cartel facilitators
Participation across a broad group of firms

30. Advantages of managing a portfolio of cartels
Transfers across cartelized products
Thiamine, beta carotene example
Other potential examples in paper
Communications across cartelized products
Use of leniency to establish a reputation for being tough with cheaters
Akzo, then Degussa, then Akzo
Monitoring cartel compliance made easier
Familiarity with cartel facilitators
Fides/AC Treuhand
Marine hoses, Yen interest rate derivatives
Many other potential cartel facilitators

31. Suggested policy reforms WRT serial colluders
Detailed cartel reconstructions
Indications of anti-competitive conduct trigger mandatory reporting of—
Communications and transactions with competitors
Adjustments in the incentives of sales personnel
Changes in capacity related to previously cartelized products
Merger review—mandatory coordinated effects investigation
Small cartel firms that are first-time offenders get amnesty AND bounty as qui tam relators