ADM was at the center of two large global price-fixing conspiracies. Buyers were overcharged $116... more ADM was at the center of two large global price-fixing conspiracies. Buyers were overcharged $116 to $378 million in the United States. Market structure and corporate management style facilitated these cartels. The criminal prosecutions and defendants' legal strategies were both laudatory, but civil plaintiffs were short-changed. ADM has undergone severe management restructuring, but the effectiveness of apprehending global cartels with national legal enforcement is questionable.
Both market structure and corporate practices of Archer Daniels Midland fostered the implementati... more Both market structure and corporate practices of Archer Daniels Midland fostered the implementation of the largest price- fixing conspiracies seen in modern times. These events have spurred renewed attention by U.S. antitrust authorities in prosecuting international cartels. The overcharges imposed on buyers of lysine and citric acid during 1994-1995 by ADM and its co-conspirators amounted to at least $200 million, and the total amount of public penalties, private damages, and legal costs exceeds $500 million. Perpetrators of price-fixing now face monetary exposures that are five times the amount of the harm caused to buyers.
Although the recent growth of cartel fines in the ROW is impressive, there are at least three imp... more Although the recent growth of cartel fines in the ROW is impressive, there are at least three important differences between these authorities and the more established antitrust agencies. John Connor (Purdue Univ.)
University of Baltimore School of Law Legal Studies Research Paper Series, 2019
This article seeks to answer a fundamental antitrust question: does crime pay? Do the current ove... more This article seeks to answer a fundamental antitrust question: does crime pay? Do the current overall levels of U.S. cartel sanctions adequately discourage firms from engaging in illegal collusion? Seven years ago our research showed that the unfortunate answer was clearly that, yes, criminal collusion usually is profitable! The expected costs (in terms of criminal fines and prison time, civil damages, etc.) was significantly less than expected gains to the price fixers. Sadly, the most recent data re-affirm this conclusion. The great majority of companies participating in illegal cartels make a profit even after they pay all the penalties. The current level of sanctions is only 9 to 21 percent of optimality, so it follows that current overall sanction levels should be quintupled. To move modestly in this direction, we propose five specific recommendations. Only the first and possibly the last would require new legislation. First, legislation should add prejudgment interest to both ...
ADM was at the center of two large global price-fixing conspiracies. Buyers were overcharged $116... more ADM was at the center of two large global price-fixing conspiracies. Buyers were overcharged $116 to $378 million in the United States. Market structure and corporate management style facilitated these cartels. The criminal prosecutions and defendants' legal strategies were both laudatory, but civil plaintiffs were short-changed. ADM has undergone severe management restructuring, but the effectiveness of apprehending global cartels with national legal enforcement is questionable.
Both market structure and corporate practices of Archer Daniels Midland fostered the implementati... more Both market structure and corporate practices of Archer Daniels Midland fostered the implementation of the largest price- fixing conspiracies seen in modern times. These events have spurred renewed attention by U.S. antitrust authorities in prosecuting international cartels. The overcharges imposed on buyers of lysine and citric acid during 1994-1995 by ADM and its co-conspirators amounted to at least $200 million, and the total amount of public penalties, private damages, and legal costs exceeds $500 million. Perpetrators of price-fixing now face monetary exposures that are five times the amount of the harm caused to buyers.
Although the recent growth of cartel fines in the ROW is impressive, there are at least three imp... more Although the recent growth of cartel fines in the ROW is impressive, there are at least three important differences between these authorities and the more established antitrust agencies. John Connor (Purdue Univ.)
University of Baltimore School of Law Legal Studies Research Paper Series, 2019
This article seeks to answer a fundamental antitrust question: does crime pay? Do the current ove... more This article seeks to answer a fundamental antitrust question: does crime pay? Do the current overall levels of U.S. cartel sanctions adequately discourage firms from engaging in illegal collusion? Seven years ago our research showed that the unfortunate answer was clearly that, yes, criminal collusion usually is profitable! The expected costs (in terms of criminal fines and prison time, civil damages, etc.) was significantly less than expected gains to the price fixers. Sadly, the most recent data re-affirm this conclusion. The great majority of companies participating in illegal cartels make a profit even after they pay all the penalties. The current level of sanctions is only 9 to 21 percent of optimality, so it follows that current overall sanction levels should be quintupled. To move modestly in this direction, we propose five specific recommendations. Only the first and possibly the last would require new legislation. First, legislation should add prejudgment interest to both ...
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