The current U.S. Sentencing Guidelines for criminal price fixing violations begin with an assumption that cartels raise prices by an average of 10% of the affected commerce, and use this estimate to calculate recommended fines to achieve optimal deterrence. Some have suggested that this figure might be too high, and a recent Supreme Court decision has called into question the constitutionality of the Guidelines. For these reasons the Guidelines might well be re-formulated. This article re-examines the Sentencing Commission’s assumption using 2 data sources: every available economic study of cartels, and every final verdict in a U.S. cartel case that reported the overcharge percentage. The results from the different data sources and periods, show median and average cartel overcharges that are between 15% and 36%, with most of the median and average results between 20% and 30%. Based upon this finding the authors recommend that the Sentencing Commission raise the current level of cartel penalties.
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