Published on: September 27, 2021



What :

  • According to competition commission of India ” “Cartel includes an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit, control or attempt to control the production, distribution, sale or price of, or, trade in goods or provision of services”
  • The International Competition Network, which is a global body dedicated to enforcing competition law, has a simpler definition. The three common components of a cartel are:
    • an agreement;
    • between competitors;
    • to restrict competition.

According to ICN, four categories of conduct are commonly identified across jurisdictions (countries). These are:

  • price-fixing
  • output restrictions
  • market allocation
  • bid-rigging

How do cartels hurt:

  • Directly hurt the consumers
  • Indirectly undermine overall economic efficiency and innovations
  • According to the Organisation for Economic Co-operation and Development, “A successful cartel raises the price above the competitive level and reduces output. Consumers choose either not to pay the higher price for some or all of the cartelised product that they desire, thus forgoing the product, or they pay the cartel price and thereby unknowingly transfer wealth to the cartel operators”.