Cartel
Encyclopedia
A cartel is a formal agreement among competing firms. It is a formal organization of producers and manufacturers that agree to fix prices, marketing, and production. Cartels usually occur in an oligopolistic industry
, where there is a small number of sellers and usually involve homogeneous products. Cartel members may agree on such matters as price fixing
, total industry output, market share
s, allocation of customers, allocation of territories, bid rigging
, establishment of common sales agencies, and the division of profits or combination of these. The aim of such collusion
(also called the cartel agreement) is to increase individual members' profits
by reducing competition.
One can distinguish private cartels from public cartels. In the public cartel a government is involved to enforce the cartel agreement, and the government's sovereignty shields such cartels from legal actions. Inversely, private cartels are subject to legal liability under the antitrust
laws now found in nearly every nation of the world.
Competition law
s often forbid private cartels. Identifying and breaking up cartels is an important part of the competition policy in most countries, although proving the existence of a cartel is rarely easy, as firms are usually not so careless as to put collusion agreements on paper.
Several economic studies and legal decisions of antitrust authorities have found that the median price increase achieved by cartels in the last 200 years is around 25%. Private international cartels (those with participants from two or more nations) had an average price increase of 28%, whereas domestic cartels averaged 18%. Fewer than 10% of all cartels in the sample failed to raise market prices.
Export
cartels and shipping conferences are examples of public cartels. In many countries, depression cartels have been permitted in industries deemed to be requiring price and production stability and/or to permit rationalization
of industry structure and excess capacity. In Japan
for example, such arrangements have been permitted in the steel
, aluminum smelting, ship building and various chemical industries
.
Public cartels were also permitted in the United States
during the Great Depression
in the 1930s and continued to exist for some time after World War II
in industries such as coal mining
and oil production
. Cartels also played an extensive role in the German economy during the inter-war period. International commodity
agreements covering products such as coffee
, sugar
, tin
and more recently oil
(OPEC
) are examples of international cartels with publicly entailed agreements between different national governments. Crisis cartels have also been organized by governments for various industries or products in different countries in order to fix prices and ration production and distribution in periods of acute shortages.
Murray Rothbard
considered the federal reserve as a public cartel of private banks.
In contrast, private cartels entail an agreement on terms and conditions that provide members mutual advantage, but that are not known or likely to be detected by outside parties. Private cartels in most jurisdictions are viewed as violating antitrust laws.
suggests that cartels are inherently unstable, as the behaviour of members of a cartel is an example of a prisoner's dilemma
. Each member of a cartel would be able to make more profit by breaking the agreement (producing a greater quantity or selling at a lower price than that agreed) than it could make by abiding by it. However, if all members break the agreement, all will be worse off.
The incentive to cheat explains why cartels are generally difficult to sustain in the long run. Empirical studies of 20th century cartels have determined that the mean duration of discovered cartels is from 5 to 8 years. However, one private cartel operated peacefully for 134 years before disbanding. There is a danger that once a cartel is broken, the incentives to form the cartel return and the cartel may be re-formed.
Whether members of a cartel choose to cheat on the agreement depends on whether the short-term returns to cheating outweigh the long-term losses from the possible breakdown of the cartel. (The equilibrium of a prisoner's dilemma game varies according to whether it is played only once or repeatedly.) The relative size of these two factors depends in part on how difficult it is for firms to monitor whether the agreement is being adhered to by other firms. If monitoring is difficult, a member is likely to get away with cheating (and making higher profits) for longer, so members are more likely to cheat and the cartel will be more unstable.
There are several factors that will affect the firms' ability to monitor a cartel:
The greater the number of firms, the more probable it is that one of those firms is a maverick firm; that is, a firm known for pursuing aggressive and independent pricing strategy. Even in the case of a concentrated market, with few firms, the existence of such a firm may undermine the collusive behaviour of the cartel.
products. Not only do homogeneous products make agreement on prices and/or quantities easier to negotiate, but also they facilitate monitoring. If goods are homogeneous, firms know that a change in their market share
is probably due to a price cut (or quantity increase) by another member. Instead, if products are differentiated, changes in quantity sold by a member may be due to changes in consumer preferences or demand.
of 1890 outlawed all contracts, combinations and conspiracies that unreasonably restrain interstate and foreign trade. This includes cartel violations, such as price fixing
, bid rigging
, and customer allocation. Sherman Act violations involving agreements between competitors are usually punishable as federal crimes.
explicitly forbids cartels and related practices in its article 81 of the Treaty of Rome
. Since the Treaty of Lisbon
came into effect, the 81 EC is replaced by 101 TFEU. The article reads:
Article 81 explicitly forbids price fixing
and limitation/control of production, the two more frequent cartel-types of collusion. The EU competition law also has regulations on the amount of fines for each type of cartel and a leniency policy by which, if a firm in a cartel, is the first to denounce the collusion agreement it is free of any responsibility. This mechanism has helped a lot in detecting cartel agreements in the EU.
and Procter & Gamble
who were found guilty of price fixing washing powder in 8 European countries. The case that was conducted by the European Commission after a tip off from Germany company, Henkel. The resulting penalty was a 315 million euros fine, split between Unilever (104m Euros) and Procter & Gamble (211m Euros)
Another example of an international cartel is the one created by the members of the Asian Racing Federation
and documented in the Good Neighbor Policy signed on September 1, 2003. Other well-known examples include:
Oligopoly
An oligopoly is a market form in which a market or industry is dominated by a small number of sellers . The word is derived, by analogy with "monopoly", from the Greek ὀλίγοι "few" + πόλειν "to sell". Because there are few sellers, each oligopolist is likely to be aware of the actions of the others...
, where there is a small number of sellers and usually involve homogeneous products. Cartel members may agree on such matters as price fixing
Price fixing
Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand...
, total industry output, market share
Market share
Market share is the percentage of a market accounted for by a specific entity. In a survey of nearly 200 senior marketing managers, 67 percent responded that they found the "dollar market share" metric very useful, while 61% found "unit market share" very useful.Marketers need to be able to...
s, allocation of customers, allocation of territories, bid rigging
Bid rigging
Bid rigging is a form of fraud in which a commercial contract is promised to one party even though for the sake of appearance several other parties also present a bid. This form of collusion is illegal in most countries...
, establishment of common sales agencies, and the division of profits or combination of these. The aim of such collusion
Collusion
Collusion is an agreement between two or more persons, sometimes illegal and therefore secretive, to limit open competition by deceiving, misleading, or defrauding others of their legal rights, or to obtain an objective forbidden by law typically by defrauding or gaining an unfair advantage...
(also called the cartel agreement) is to increase individual members' profits
Profit (economics)
In economics, the term profit has two related but distinct meanings. Normal profit represents the total opportunity costs of a venture to an entrepreneur or investor, whilst economic profit In economics, the term profit has two related but distinct meanings. Normal profit represents the total...
by reducing competition.
One can distinguish private cartels from public cartels. In the public cartel a government is involved to enforce the cartel agreement, and the government's sovereignty shields such cartels from legal actions. Inversely, private cartels are subject to legal liability under the antitrust
Antitrust
The United States antitrust law is a body of laws that prohibits anti-competitive behavior and unfair business practices. Antitrust laws are intended to encourage competition in the marketplace. These competition laws make illegal certain practices deemed to hurt businesses or consumers or both,...
laws now found in nearly every nation of the world.
Competition law
Competition law
Competition law, known in the United States as antitrust law, is law that promotes or maintains market competition by regulating anti-competitive conduct by companies....
s often forbid private cartels. Identifying and breaking up cartels is an important part of the competition policy in most countries, although proving the existence of a cartel is rarely easy, as firms are usually not so careless as to put collusion agreements on paper.
Several economic studies and legal decisions of antitrust authorities have found that the median price increase achieved by cartels in the last 200 years is around 25%. Private international cartels (those with participants from two or more nations) had an average price increase of 28%, whereas domestic cartels averaged 18%. Fewer than 10% of all cartels in the sample failed to raise market prices.
Origin
The term cartel originated for alliances of enterprises roughly around 1880 in Germany. The name was imported into the Anglosphere during the 1930s. Before this, other, less precise terms were common to denominate cartels, for instance: association, combination, combine or pool. In the 1940s the name cartel got an Anti-German bias, being the economic system of the enemy. Cartels were the economic structure the American antitrust campaign struggled to ban globally.Private vs public cartel
A distinction is sometimes drawn between public and private cartels, though there is no evidence that public cartels are less harmful to the general good, and being government backed, they are much more effective and, hence, potentially harmful. In the case of public cartels, the government may establish and enforce the rules relating to prices, output and other such matters.Export
Export
The term export is derived from the conceptual meaning as to ship the goods and services out of the port of a country. The seller of such goods and services is referred to as an "exporter" who is based in the country of export whereas the overseas based buyer is referred to as an "importer"...
cartels and shipping conferences are examples of public cartels. In many countries, depression cartels have been permitted in industries deemed to be requiring price and production stability and/or to permit rationalization
Rationalization (economics)
In economics, rationalization is an attempt to change a pre-existing ad hoc workflow into one that is based on a set of published rules. There is a tendency in modern times to quantify experience, knowledge, and work. Means-end rationality is used to precisely calculate that which is necessary to...
of industry structure and excess capacity. In Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
for example, such arrangements have been permitted in the steel
Steel
Steel is an alloy that consists mostly of iron and has a carbon content between 0.2% and 2.1% by weight, depending on the grade. Carbon is the most common alloying material for iron, but various other alloying elements are used, such as manganese, chromium, vanadium, and tungsten...
, aluminum smelting, ship building and various chemical industries
Chemical industry
The chemical industry comprises the companies that produce industrial chemicals. Central to the modern world economy, it converts raw materials into more than 70,000 different products.-Products:...
.
Public cartels were also permitted in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
during the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
in the 1930s and continued to exist for some time after World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
in industries such as coal mining
Coal mining
The goal of coal mining is to obtain coal from the ground. Coal is valued for its energy content, and since the 1880s has been widely used to generate electricity. Steel and cement industries use coal as a fuel for extraction of iron from iron ore and for cement production. In the United States,...
and oil production
Petroleum industry
The petroleum industry includes the global processes of exploration, extraction, refining, transporting , and marketing petroleum products. The largest volume products of the industry are fuel oil and gasoline...
. Cartels also played an extensive role in the German economy during the inter-war period. International commodity
Commodity markets
Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts....
agreements covering products such as coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
, sugar
Sugar
Sugar is a class of edible crystalline carbohydrates, mainly sucrose, lactose, and fructose, characterized by a sweet flavor.Sucrose in its refined form primarily comes from sugar cane and sugar beet...
, tin
Tin
Tin is a chemical element with the symbol Sn and atomic number 50. It is a main group metal in group 14 of the periodic table. Tin shows chemical similarity to both neighboring group 14 elements, germanium and lead and has two possible oxidation states, +2 and the slightly more stable +4...
and more recently oil
Oil
An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....
(OPEC
OPEC
OPEC is an intergovernmental organization of twelve developing countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. OPEC has maintained its headquarters in Vienna since 1965, and hosts regular meetings...
) are examples of international cartels with publicly entailed agreements between different national governments. Crisis cartels have also been organized by governments for various industries or products in different countries in order to fix prices and ration production and distribution in periods of acute shortages.
Murray Rothbard
Murray Rothbard
Murray Newton Rothbard was an American author and economist of the Austrian School who helped define capitalist libertarianism and popularized a form of free-market anarchism he termed "anarcho-capitalism." Rothbard wrote over twenty books and is considered a centrally important figure in the...
considered the federal reserve as a public cartel of private banks.
In contrast, private cartels entail an agreement on terms and conditions that provide members mutual advantage, but that are not known or likely to be detected by outside parties. Private cartels in most jurisdictions are viewed as violating antitrust laws.
Long-term unsustainability of cartels
Game theoryGame theory
Game theory is a mathematical method for analyzing calculated circumstances, such as in games, where a person’s success is based upon the choices of others...
suggests that cartels are inherently unstable, as the behaviour of members of a cartel is an example of a prisoner's dilemma
Prisoner's dilemma
The prisoner’s dilemma is a canonical example of a game, analyzed in game theory that shows why two individuals might not cooperate, even if it appears that it is in their best interest to do so. It was originally framed by Merrill Flood and Melvin Dresher working at RAND in 1950. Albert W...
. Each member of a cartel would be able to make more profit by breaking the agreement (producing a greater quantity or selling at a lower price than that agreed) than it could make by abiding by it. However, if all members break the agreement, all will be worse off.
The incentive to cheat explains why cartels are generally difficult to sustain in the long run. Empirical studies of 20th century cartels have determined that the mean duration of discovered cartels is from 5 to 8 years. However, one private cartel operated peacefully for 134 years before disbanding. There is a danger that once a cartel is broken, the incentives to form the cartel return and the cartel may be re-formed.
Whether members of a cartel choose to cheat on the agreement depends on whether the short-term returns to cheating outweigh the long-term losses from the possible breakdown of the cartel. (The equilibrium of a prisoner's dilemma game varies according to whether it is played only once or repeatedly.) The relative size of these two factors depends in part on how difficult it is for firms to monitor whether the agreement is being adhered to by other firms. If monitoring is difficult, a member is likely to get away with cheating (and making higher profits) for longer, so members are more likely to cheat and the cartel will be more unstable.
There are several factors that will affect the firms' ability to monitor a cartel:
- Number of firms in the industry
- Characteristics of the products sold by the firms
- Production costs of each member
- Behaviour of demand
- Frequency of sales and their characteristics
Number of firms in industry
The fewer the number of firms in the industry, the easier for the members of the cartel to monitor the behaviour of other members. Given that detecting a price cut becomes harder as the number of firms increases, the bigger are the gains from price cutting.The greater the number of firms, the more probable it is that one of those firms is a maverick firm; that is, a firm known for pursuing aggressive and independent pricing strategy. Even in the case of a concentrated market, with few firms, the existence of such a firm may undermine the collusive behaviour of the cartel.
Characteristics of products sold
Cartels that sell homogeneous products are more stable than those that sell differentiatedProduct differentiation
In economics and marketing, product differentiation is the process of distinguishing a product or offering from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as a firm's own product offerings...
products. Not only do homogeneous products make agreement on prices and/or quantities easier to negotiate, but also they facilitate monitoring. If goods are homogeneous, firms know that a change in their market share
Market share
Market share is the percentage of a market accounted for by a specific entity. In a survey of nearly 200 senior marketing managers, 67 percent responded that they found the "dollar market share" metric very useful, while 61% found "unit market share" very useful.Marketers need to be able to...
is probably due to a price cut (or quantity increase) by another member. Instead, if products are differentiated, changes in quantity sold by a member may be due to changes in consumer preferences or demand.
Production costs
Similar cost structures of the firms in a cartel make it easier for them to co-ordinate, as they will have similar maximizing behaviour as regards prices and output. Instead, if firms have different cost structures then each will have different maximizing behaviour, so they will have an incentive to set a different price or quantity. Changes in cost structure (for example when a firm introduces a new technology) also give a cost advantage over rivals, making co-ordination and sustainability more difficult.Behavior of demand
If an industry is characterized by a varying demand (that is, a demand with cyclical fluctuations), it is more difficult for the firms in the cartel to detect whether any change in their sales volume is due to a demand fluctuation or to cheating by another member of the cartel. Therefore, in a market with demand fluctuations, monitoring is more difficult and cartels are less stable.Characteristics of sales
If each firm's sales consist of a small number of high-value contracts, then it can make a relatively large short-term gain from cheating on the agreement and thereby winning more of these contracts. If, instead, its sales are high-volume and low-value, then the short-term gain is smaller. Therefore, low frequency of sales coupled with high value in each of these sales make cartels less sustainable. When the demand of the product is fluctuating, parties that are in a cartel are less interested to remain in the cartel, because they are not able to make regular profit.General view
International competition authorities forbid cartels, but the effectiveness of cartel regulation and antitrust law in general is disputed by economic libertarians.United States
The Sherman Antitrust ActSherman Antitrust Act
The Sherman Antitrust Act requires the United States federal government to investigate and pursue trusts, companies, and organizations suspected of violating the Act. It was the first Federal statute to limit cartels and monopolies, and today still forms the basis for most antitrust litigation by...
of 1890 outlawed all contracts, combinations and conspiracies that unreasonably restrain interstate and foreign trade. This includes cartel violations, such as price fixing
Price fixing
Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand...
, bid rigging
Bid rigging
Bid rigging is a form of fraud in which a commercial contract is promised to one party even though for the sake of appearance several other parties also present a bid. This form of collusion is illegal in most countries...
, and customer allocation. Sherman Act violations involving agreements between competitors are usually punishable as federal crimes.
European Union
The EU's competition lawCompetition law
Competition law, known in the United States as antitrust law, is law that promotes or maintains market competition by regulating anti-competitive conduct by companies....
explicitly forbids cartels and related practices in its article 81 of the Treaty of Rome
Treaty of Rome
The Treaty of Rome, officially the Treaty establishing the European Economic Community, was an international agreement that led to the founding of the European Economic Community on 1 January 1958. It was signed on 25 March 1957 by Belgium, France, Italy, Luxembourg, the Netherlands and West Germany...
. Since the Treaty of Lisbon
Treaty of Lisbon
The Treaty of Lisbon of 1668 was a peace treaty between Portugal and Spain, concluded at Lisbon on 13 February 1668, through the mediation of England, in which Spain recognized the sovereignty of Portugal's new ruling dynasty, the House of Braganza....
came into effect, the 81 EC is replaced by 101 TFEU. The article reads:
1. The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those that: Directly or indirectly fix purchase or selling prices or any other trading conditions Limit or control production, markets, technical development, or investment Share markets or sources of supply Apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; Make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations that, by their nature or according to commercial usage, have no connection with the subject of such contracts
2. Any agreements or decisions prohibited pursuant to this article shall be automatically void.
3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of:
- - Any agreement or category of agreements between undertakings
- - Any decision or category of decisions by associations of undertakings
- - Any concerted practice or category of concerted practices that improve the production or distribution of goods, or promotes technical or economic progress, while allowing consumers a fair share of the resulting benefit, and that does not:
- (a) Impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives
- (b) Afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question
Article 81 explicitly forbids price fixing
Price fixing
Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand...
and limitation/control of production, the two more frequent cartel-types of collusion. The EU competition law also has regulations on the amount of fines for each type of cartel and a leniency policy by which, if a firm in a cartel, is the first to denounce the collusion agreement it is free of any responsibility. This mechanism has helped a lot in detecting cartel agreements in the EU.
Examples
The most recent example of a cartel was between UnileverUnilever
Unilever is a British-Dutch multinational corporation that owns many of the world's consumer product brands in foods, beverages, cleaning agents and personal care products....
and Procter & Gamble
Procter & Gamble
Procter & Gamble is a Fortune 500 American multinational corporation headquartered in downtown Cincinnati, Ohio and manufactures a wide range of consumer goods....
who were found guilty of price fixing washing powder in 8 European countries. The case that was conducted by the European Commission after a tip off from Germany company, Henkel. The resulting penalty was a 315 million euros fine, split between Unilever (104m Euros) and Procter & Gamble (211m Euros)
Another example of an international cartel is the one created by the members of the Asian Racing Federation
Asian Racing Federation
The Asian Racing Federation is an international federation of horse racing governing bodies in Asia, most of which are government granted monopolies.Established in 1960 as the Asian Racing Conference, it changed its name to Asian Racing Federation in 2001....
and documented in the Good Neighbor Policy signed on September 1, 2003. Other well-known examples include:
- Organization of the Petroleum Exporting Countries (OPECOPECOPEC is an intergovernmental organization of twelve developing countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. OPEC has maintained its headquarters in Vienna since 1965, and hosts regular meetings...
): As its name suggests, OPEC is organized by sovereign states. It cannot be held to antitrust enforcement in other jurisdictionJurisdictionJurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...
s by virtue of the doctrine of state immunity under public international law. However, members of the group do frequently break rank to increase production quotaProduction quotaA production quota is a goal for the production of a good. It is typically set by a government or an organization, and can be applied to an individual worker, firm, industry or country. Quotas can be set high to encourage production, or can be used to limit production to control the supply of goods...
s. - International Match Corporation (IMCO) of Ivar KreugerIvar KreugerIvar Kreuger was a Swedish civil engineer, financier, entrepreneur and industrialist. In 1908 Kreuger co-founded the construction company Kreuger & Toll Byggnads AB which specialized in new building techniques. By aggressive investments and innovative financial instruments he built a global match...
in the 1920s. - Many trade organizations, especially in industries dominated by only a few major companies, have been accused of being fronts for cartels.
- A well documented, private, international cartel is the lysine cartel of 1992-95.
- Some have argued that even the suppliers of credit can form a cartel to raise the price of credit (the interest rateInterest rateAn interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. For example, a small company borrows capital from a bank to buy new assets for their business, and in return the lender receives interest at a predetermined interest rate for...
) or gain political power
See also
- Anti-trust law
- Bid riggingBid riggingBid rigging is a form of fraud in which a commercial contract is promised to one party even though for the sake of appearance several other parties also present a bid. This form of collusion is illegal in most countries...
- Business oligarchBusiness oligarchBusiness oligarch is a near-synonym of the term "business magnate", borrowed by the English speaking and western media from post-Soviet parlance to describe the huge, fast-acquired wealth of some businessmen of the former Soviet republics during the privatization in Russia and other post-Soviet...
- CollusionCollusionCollusion is an agreement between two or more persons, sometimes illegal and therefore secretive, to limit open competition by deceiving, misleading, or defrauding others of their legal rights, or to obtain an objective forbidden by law typically by defrauding or gaining an unfair advantage...
- Competition regulatorCompetition regulatorA competition regulator is a government agency, typically a statutory authority, sometimes called an economic regulator, which regulates and enforces competition laws, and may sometimes also enforce consumer protection laws...
- Content cartelContent cartelThe phrase content cartel has been used by their opponents to describe the Recording Industry Association of America and the Motion Picture Association of America. Their opponents depict them as a cartel who wield and abuse monopoly power over the market for access to works of authorship....
- De BeersDe BeersDe Beers is a family of companies that dominate the diamond, diamond mining, diamond trading and industrial diamond manufacturing sectors. De Beers is active in every category of industrial diamond mining: open-pit, underground, large-scale alluvial, coastal and deep sea...
- Drug cartelDrug cartelDrug cartels are criminal organizations developed with the primary purpose of promoting and controlling drug trafficking operations. They range from loosely managed agreements among various drug traffickers to formalized commercial enterprises. The term was applied when the largest trafficking...
- Economic regulator
- Federal Reserve
- Industrial organizationIndustrial organizationIndustrial organization is the field of economics that builds on the theory of the firm in examining the structure of, and boundaries between, firms and markets....
- IATAInternational Air Transport AssociationThe International Air Transport Association is an international industry trade group of airlines headquartered in Montreal, Quebec, Canada, where the International Civil Aviation Organization is also headquartered. The executive offices are at the Geneva Airport in SwitzerlandIATA's mission is to...
- Labour union
- MonopolyMonopolyA monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...
- MonopsonyMonopsonyIn economics, a monopsony is a market form in which only one buyer faces many sellers. It is an example of imperfect competition, similar to a monopoly, in which only one seller faces many buyers...
- OPECOPECOPEC is an intergovernmental organization of twelve developing countries made up of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. OPEC has maintained its headquarters in Vienna since 1965, and hosts regular meetings...
- Organized crimeOrganized crimeOrganized crime or criminal organizations are transnational, national, or local groupings of highly centralized enterprises run by criminals for the purpose of engaging in illegal activity, most commonly for monetary profit. Some criminal organizations, such as terrorist organizations, are...
- Phoebus cartelPhoebus cartelThe Phoebus cartel was a cartel of, among others, Osram, Philips and General Electric from December 23, 1924 until 1939 that existed to control the manufacture and sale of light bulbs....
- Price fixingPrice fixingPrice fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand...
- Robber baronRobber baronA robber baron or robber knight was an unscrupulous and despotic nobility of the medieval period in Europe, for example, Berlichingen. It has slightly different meanings in different countries. In modern US parlance, the term is also used to describe unscrupulous industrialists...
- Standard OilStandard OilStandard Oil was a predominant American integrated oil producing, transporting, refining, and marketing company. Established in 1870 as a corporation in Ohio, it was the largest oil refiner in the world and operated as a major company trust and was one of the world's first and largest multinational...
- State cartel theoryState cartel theoryState cartel theory is a new concept in the field of International Relations theory and belongs to the group of institutionalist approaches. Up to now the theory has mainly been specified with regard to the European Union , but could be made much more general...
- Tacit collusionTacit collusionTacit collusion occurs when cartels are illegal or overt collusion is absent. Put another way, two firms agree to play a certain strategy without explicitly saying so. Oligopolists usually try not to engage in price cutting, excessive advertising or other forms of competition. Thus, there may be...
- TrustTrust (19th century)A special trust or business trust is a business entity formed with intent to monopolize business, to restrain trade, or to fix prices. Trusts gained economic power in the U.S. in the late 19th and early 20th centuries. Some, but not all, were organized as trusts in the legal sense...
- ZaibatsuZaibatsuis a Japanese term referring to industrial and financial business conglomerates in the Empire of Japan, whose influence and size allowed for control over significant parts of the Japanese economy from the Meiji period until the end of World War II.-Terminology:...