Cartel Agreement Meaning

A cartel is a group of producers who work together to protect their interests. Cartels arise when a few large producers decide to cooperate on aspects of their market. Once formed, cartels can consolidate prices for members, avoiding price competition. In this case, the cartels are also called price rings. They may also limit the production put on the market, for example. B with OPEC and oil production quotas, and establish rules for other aspects of members` behavior. The establishment of rules is particularly important in oligopolistic markets, as expected in game theory. One of the main attractions of agreements for producers is that they set rules that members follow, which will reduce the risks that would exist without the agreement. If you are aware of antitrust behaviour, you can report it to the ACCC. If you are involved in a cartel, you can apply for immunity from prosecution to help us in our investigation. We also offer the possibility of an anonymous message. Other penalties are applicable to anti-cartel infringements: since cartels are likely to have an impact on market positions, they are subject to competition law, which is enforced by public competition authorities.

Concentrations of undertakings are subject to very similar rules. A single company holding a monopoly is not considered a cartel, but may be sanctioned by other abuses of its monopoly. Cartels act to the detriment of the consumer, as their activities are aimed at raising the price of a product or service above the market price. However, their behaviour is also harmful in another way. Agreements discourage new entrants and act as a barrier to entry. .