Does Crime Pay? Penalties and Profits
John M. Connor and Robert H. Lande’s article “Does Crime Pay? Penalties and Profits” was published in Antitrust Magazine (Spring 2019, Vol. 33, No. 2).
This article seeks to answer a fundamental antitrust question: does crime pay? In other words, do the current overall levels of U.S. cartel sanctions (including civil damages) adequately discourage firms from engaging in illegal collusion? The authors conclude that the great majority of companies participating in illegal cartels make a profit even after they pay all the penalties. This is true both for cartels that operate purely within the United States and for international cartels. Since the current level of sanctions is only 9 to 21% of optimality, it follows that current overall sanction levels should be quintupled.