| John M. Connor, Robert H. Lande
Cartels, Public Enforcement
In a letter to the United States Sentencing Commission pursuant to its request for public comment on possible priority policy issues, the American Antitrust Institute (AAI) calls for the Commission to reconsider a crucial empirical finding it made in 1987 that has become a lynchpin of the formula used to calculate fines for collusion offenses. Read the letter here.
In July 2013, the AAI submitted a Comment to the Commission that the evidence warranted at least a doubling of its cartel overcharge presumption. In 2014 – apparently in response to the 2013 AAI suggestion, and for the first time since 1991 – the Commission said, in its request for public input, that re-examining the level of cartel fines would be among it’s “tentative priorities”.
In August 2014, the AAI submitted a second Comment asking the Commission to reconsider and double a key portion of the formula it uses to calculate fines for antitrust offenses. This reconsideration would have caused the current fines for illegal price fixing and similar collusion offenses to double. The AAI attached two documents in support of its 2014 Comment: an article by John M. Connor and Robert H. Lande, “Cartels As Rational Business Strategy: Crime Pays,” from 34 Cardozo L. Rev. 427 (2012); and an article by John M. Connor, “Cartel Overcharges,” from 29 Research In Law & Economics 249 (2014). In their paper, Connor and Lande conclude that raising the presumption of illegal overcharge to 20 percent would result in a considerable increase in the funds available to the Crime Victim’s fund for compensating victims of violent crimes, as well as lead to more nearly optimal deterrence of price fixing and other cartel behavior.
Media Contacts:
Robert Lande
301-585-5229
John Connor
317-219-9981
Diana Moss
202-536-3408
