AAI Working Paper No. 11-05.pptx - American Antitrust Institute

1 downloads 0 Views 443KB Size Report
the press. There is no double coun0ng of cartel discoveries in this slide. Glass Containers is the first cartel, inves0gated in 1983 with a bench trial ending 1990.
AAI  Working  Paper  No.  11-­‐05  

 CARTELS  PORTRAYED:  DETECTION      A  21-­‐Year  Perspec9ve,  1990  to  2010     Author:  John  M.  Connor,   Purdue  University   [email protected]  

Introduc7on   •  The  following  charts  illustrate  the  global  size  and  economic  impacts  of  the   modern  interna9onal  cartel  movement  and  the  enforcement  responses  of   the  world’s  an9trust  authori9es  and  na9onal  courts.     •  The  sample  encompasses  640  private  hard-­‐core  cartels  that  were  subject   to  government  or  private  legal  ac9ons  (i.e.,  formal  inves9ga9ons,  damages   suits,  fines,  or  consent  decrees)  between  January  1990  and  December   2010.  Each  cartel  had  par9cipants  with  headquarters  in  two  or  more   na9ons.  The  sample  is  believed  to  be  a  reasonably  complete  list  of  all   contemporary  private  interna/onal  cartels  discovered  by  jurisdic9ons  with   an  ac9ve  press  or  informa9ve  an9trust-­‐authority  Web  site.     •  All  monetary  data  are  expressed  in  nominal  U.S.  dollars  using  exchange   rates  during  the  cartel’s  life  or  on  the  day  a  legal  ac9on  was  announced.   •  A  special  effort  is  made  to  create  charts  that  illustrate  trends  in  cartel   dimensions  and  an9trust  decisions.     8/2/11  

2  

DETECTION:   Interna7onal  Cartels  Are  Now   Being  Assaulted  on  All  Fronts    

8/2/11  

3  

Narra9ve  on  Detec9on   •  Indictments  in  the  US  and  Canada  seem  to  have   peaked  during  1995-­‐2007,  but  are  rising  elsewhere.   •  The  EC’s  cases  are  rising  and  account  for  1/6  of  the   total  in  the  past  six  years.  However,  the  EU’s  Na9onal   Compe99on  Authori9es  (NCAs)  are  now  the  biggest   prosecutors,  accoun9ng  for  ½  of  the  total.   •  Asia  (mostly  Korea)  is  becoming  a  cartel  9ger.   •  Of  late,  So.  Africa  and  Brazil  are  ac9ve  also.   •  Although  increased  detec9on  rates  are  probably  due  to   more  agencies  and  beeer  policies,  the  total  number  of   cartels  (including  hidden  ones)  could  be  rising  or  falling   8/2/11  

4  

Annual  Cartel  Detec9ons  by  the     US  DOJ  Peaked  in  2005-­‐07   12   10   8   6  

Detec9ons  

4   2   0   Before  1995   1995-­‐99   8/2/11  

2000-­‐04  

2005-­‐07  

J  M  Connor,  Purdue  U.  

2008-­‐10   5  

Cartel  Detec9ons  per  year  by     Canada  Are  Falling     5   4.5   4   3.5   3   2.5  

Detec9ons  

2   1.5   1   0.5   0   Before  1994   1995-­‐99   8/2/11  

2000-­‐04  

2005-­‐07  

J  M  Connor,  Purdue  U.  

2008-­‐10   6  

Rates  of  Discovery  of  All  Cartels   Are  Rising  over  Time   Number  detected  per  year  

60   56.7  

50  

59.3  

40   30   20   10  

9.8  

0   Before  1994  

1995-­‐99  

2000-­‐04  

2005-­‐07  

2005-­‐10  

Year  of  Discovery  of  All  Interna9onal  Cartels   8/2/11  

J  M  Connor,  Purdue  U.  

7  

Rates  of  Discovery  of  Global  Cartels   Peaked  in  2005-­‐2007   10   9  

10  

8   7  

7.6  

6  

Number/   year  

5  

5.6  

4   3   2   1  

4   2.3  

0   1991-­‐94  

1995-­‐99  

2000-­‐04  

2005-­‐07  

2008-­‐10  

“Global”  cartels  affected  prices  in  two  or  more  con9nents   8/2/11  

J  M  Connor,  Purdue  U.  

8  

Rates  of  Discovery  by  the     European  Commission  Are  Rising   12   10  

11   9.8  

8  

9  

6  

Inves9ga9ons  

6.2   4   2   1.9   0   Before  1994   1995-­‐99   8/2/11  

2000-­‐04  

2005-­‐07  

J  M  Connor,  Purdue  U.  

2008-­‐10   9  

Detec9on  Rates  by  the  EU’s  NCAs   Surpass  All  Others  since  2000   30  

27.3  

25   20   15  

Detec9ons  

10   5   1.2   0   1990-­‐94   8/2/11  

1995-­‐99  

2000-­‐04  

2005-­‐07  

J  M  Connor,  Purdue  U.  

2008-­‐10   10  

Asian  An9-­‐Cartel  Enforcement     (Especially  Korea)  Is  Accelera9ng   12  

10.3  

10   8   6  

Detec9ons   per  year  

4   2   0   1990-­‐94   8/2/11  

1995-­‐99  

2000-­‐04  

2005-­‐07  

J  M  Connor,  Purdue  U.  

2008-­‐10   11  

Cartel  Detec9ons  in  Africa  and  La7n   America  Are  Now  Above  US  Levels   22   20   18   16   14   12   10   8   6   4   2   0  

19.7  

Detec9ons   per  year  

1990-­‐94   8/2/11  

1995-­‐99  

2000-­‐04  

2005-­‐07  

J  M  Connor,  Purdue  U.  

2008-­‐10   12  

Narra9ve  on  Inves9ga9ons   •  Most  government  cartel  inves9ga9ons  are   kept  secret  in  North  America,  but  in  ROW  raids   are  usually  announced  well  before  decisions.   •  Private  ac9ons  are  the  most  publicized.   •  Inves9ga9ons  on  average  take  3  years  in   Europe  and  half  that  9me  elsewhere.   •  Global  cartel  probes  take  longer  to  resolve  

8/2/11  

J  M  Connor,  Purdue  U.  

13  

Share  of  Inves9ga9ons    Known  Before  Decisions  

Transparency  of  Interna9onal  Cartel   Inves9ga9ons,  1990-­‐2010  

100% 77%

50%

43%

77%

41%

0%

8/2/11  

U.S. DOJ

Canada

EC

Other Govts. 14  

MEDIAN  LENGTH  of  Inves9ga9ons  of     All  Interna9onal  Cartels,  1990-­‐2010   40

36.74 31.85

30.16

Months  

30

20

20.28

19.8

10

0 US DOJ

Canada

EC

EU NCAs

Other Govts.

Excludes  secret  inves9ga9ons   8/2/11  

15  

MEDIAN  LENGTH  of  All  Inves9ga9ons  of     Global  Cartels  Is  Rela9vely  High   90 80

77.56

84

70

Months  

60 48

50 40

30.66

30 20 10 0 1990-94

1995-99

2000-04

2005-10

Excludes  secret  inves9ga9ons   8/2/11  

16  

TREND  in  LENGTH  of  Median  Inves9ga9on,     US  DOJ,  1990-­‐2010   30 25.15

25

22.8 19.39

Months  

20 15 10 4.8

5 0 1990-94

1995-99

2000-04

2005-10

Understates  length  because  termina9on  is  year  the  first  cartelist  was  fined  

8/2/11  

17  

Despite  Heavier  Interna9onal  Cartel   Penal9es,  More  Companies  Are   Becoming  Cartelists   More  than  7800  instances  of  corporate  cartel   par9cipa9on  have  been  iden9fied.  At  least   2600  have  been  fined  during  1990-­‐2010.                  

8/2/11  

J  M  Connor,  Purdue  U.  

18  

Number  of  Corporate  Cartelists  Detected                      Is   Rising   Number  of  corporate  par9cipants  

3000   2500   2000   1500   1000   500   0   1990-­‐94  

1995-­‐99  

2000-­‐04  

2005-­‐10  

Year  cartel  was  detected   8/2/11  

J  M  Connor,  Purdue  U.  

19  

Sources   •  John  M.  Connor.  Private  Interna/onal  Cartels:  Full  Data.  [The  PICs   spreadsheet,  first  created  about  1998,  is  con9nuously  updated.  As  of  March   2011,  the  full  data  file  was  11MB  and  consisted  of  640  observa9ons  of   suspected  or  convicted  cartels  and  8500  cartelists  (companies  and  individual   par9cipants)  with  2.8  million  cells  of  data.  There  are  also  13  back-­‐up   spreadsheets.]   •  John  M.  Connor.  DOJ  Cartel  Enforcement  1990-­‐2010.  [A  spreadsheet  created   late  2007  that  contains  annual  budgets,  ac9vi9es,  and  criminal  enforcement   ac9ons  of  the  U.S.  DOJ  with  respect  to  hard-­‐core  cartels.]   •  John  M.  Connor  and  Gustav  Helmers.  Sta/s/cs  on  Modern  Private   Interna/onal  Cartels:  Working  Paper  07-­‐01.  Washington,  DC:  American   An9trust  Ins9tute  (January  2007).  [hep://www.an9trus9ns9tute.org/ recent2/567.pdf]   •  John  M.  Connor.  Cartel  Amnes/es  Granted:  Worldwide  Whistleblowers   (October  2008,  updated).  [at  SSRN:  hep://ssrn.com/abstract=1285469]   8/2/11  

20  

• 

• 

• 

• 

• 

• 

Notes  

Slide  5:  Counts  all  cartels  indicted,  sued,  raided,  or  formally  inves9gated  by  a  grand  jury,  the  DOJ,  or  sued   by  private  plain9ffs.  Year  is  the  earliest  of  these  events  reported  in  the  press.    There  are  126  cartels  in  this   slide.   Slide  6:  Counts  all  cartels  indicted,  sued,  raided,  or  formally  inves9gated  by  the  Compe99on  Bureau  or   sued  by  private  plain9ffs.  Year  is  the  earliest  of  these  events  reported  in  the  press.    There  are  49  cartels  in   this  slide.   Slide  7:  Counts  all  645  cartels  indicted,  sued,  raided,  or  formally  inves9gated  by  a  court,  commission,  or   private  plain9ff  (excluding  suspected  but  cleared  cartels).  Year  is  the  earliest  of  these  events  reported  in   the  press.  There  is  no  double  coun9ng  of  cartel  discoveries  in  this  slide.  Glass  Containers  is  the  first  cartel,   inves9gated  in  1983  with  a  bench  trial  ending  1990.   Slide  8:  Counts  all  117  global  cartels  indicted,  sued,  raided,  or  formally  inves9gated  by  a  court,   commission,  or  private  plain9ff.  Excludes  suspected  but  cleared  cartels.  Year  is  the  first  of  these  episodes   reported  in  the  press.   Slide  9:  Year  is  first  public  no9ce  of  a  raid  or  other  knowledge  of  an  inves9ga9on  by  the  Commission.     Counts  all  159  cartels  formally  inves9gated  by  the  EC.    Almost  all  involved  mul9ple  Member  States  of  the   EU;  some  were  global  cartels,  and  EC  prosecu9ons  may  be  double  counted  with  those  of  other   jurisdic9ons  in  other  slides.  Year  is  the  earliest  of  these  events  reported  in  the  press  and  ranges  from  1984   to  2010.  Rates  for  2008-­‐10  probably  understated.   Slide  10:  NCAs  are  the  27  current  members  of  the  EU,  no  maeer  when  they  joined,  plus  the  countries  (now   4)  that  are  members  of  EFTA  and  included  in  enforcing  EU  compe99on  law.  Counts  all  cartels  indicted,   sued,  raided,  or  formally  inves9gated  by  a  court,  commission,  or  private  plain9ff.    Year  is  the  earliest  of   these  events  reported  in  the  press.  There  are  243  cartels  that  were  inves9gated  by  the  EU’s  NCAs.  

8/2/11  

• 

   

21  

• 

• 

• 

• 

• 

Notes  Cont.  

Slide  11:  Counts  all  88  cartels  indicted,  sued,  raided,  or  formally  inves9gated  by  a  court,  commission,  or   private  plain9ff  in  Asia.  Excludes  Australia  and  New  Zealand,  which  have  a  paeern  similar  to  Asia.  Year  is   the  earliest  of  these  events  reported  in  the  press.   Slide  12:  Counts  all  152  cartels  indicted,  sued,  raided,  or  formally  inves9gated  by  a  court,  commission,  or   private  plain9ff  in  Africa,  Asia,  or  Oceania.  By  far  the  main  protagonists  are  South  Africa  (40),  Korea  (35),   Japan  (13),  and  Brazil  (16).  Year  is  the  earliest  of  these  events  reported  in  the  press.   Slide  14:  Percentage  of  cartel  cases  that  resulted  in  fines  and  where  the  dates  of  the  inves9ga9ons  (“raids”   or  grand  juries  empanelled)  are  first  reported  in  the  English-­‐language  press  or  on  an  an9trust  authority’s   Web  site  less  than  one  month  before  a  decision  is  announced.  The  difference  between  100%  and  the   percentages  shown  above  may  be  called  secrecy  or  confiden9ality.   Slide  15:  A  lag  is  the  9me  between  the  9me  an  inves9ga9on  (raid,  statement  of  objec9ons,  issuance  of   subpoenas,  private  damages  suit,  or  grand  jury)  is  first  made  public  and  the  9me  the  first  penalty  is   announced.  There  are  253  cartels  (88  US,  co  Canada,  101  EC,  81  NCAs,  88  other)  with  one  or  more  kinds  of   completed  legal  ac9ons  for  which  the  dates  are  known;  the  median  “total  lag”  from  the  first  date  in  any   jurisdic9on  to  the  last  date  in  any  jurisdic9on  (including  generally  lengthy  private  li9ga9on)  is  36  months.   Secret  inves9ga9ons  are  those  where  the  decision  to  convict  one  or  more  cartel  par9cipants  was  the  first   9me  any  public  informa9on  became  available  about  the  existence  of  an  inves9ga9on.   Slide  16:  A  lag  is  the  9me  between  the  9me  an  inves9ga9on  (raid,  statement  of  objec9ons,  issuance  of   subpoenas,  private  damages  suit,  or  grand  jury)  is  first  made  public  and  the  9me  the  first  penalty  is   announced.  There  are  a  total  of  69  global  cartels  in  the  sample.  The  median  “total  lag”  (the  earliest  date  in   any  jurisdic9on  to  the  last  date  a  decision  is  made)  for  the  69  is  53.7  months.    

8/2/11  

22  

• 

• 

Notes  Cont.  

Slide  17:  A  lag  is  the  9me  between  the  9me  an  inves9ga9on  (raid,  statement  of  objec9ons,  issuance  of   subpoenas,  private  damages  suit,  or  grand  jury)  is  first  made  public  and  the  9me  the  first  penalty  is   announced.  There  are  a  total  of  88  cartel  prosecu9ons  in  the  sample.   Slide  19:  Total  is  about  7800  ul9mate  parents  or  “companies,”  which  double  counts  unique  companies  that   par9cipated  in  two  cartels.  Excludes  alleged  cartels  that  received  no  sanc9ons  arer  their  cases  were   concluded.    

8/2/11  

23