LAW & ECONOMICS: US LAW - SHERMAN ACT - SECTION 1 - COMPLIANCE - ECONOMIC ANALYSIS

Section 1 Sherman Act: Compliance from an economic perspective

KEYWORDS

Explicit collusion requires that the participating firms implement collusive structures in order to mitigate secret deviations and have a self-enforcing agreement that elevates profits. Current antitrust compliance training does not convey to product division decision-makers the difficulty of implementing collusive structures, nor does it convey that the structures will leave a trail of economic evidence in their wake. General counsels and top management should convey to product division decision-makers that they will be looking for these “tells” as part of their efforts to ensure compliance with Section 1. This article is a chapter of «William E. Kovacic Liber Amicorum - An Antitrust Tribute, Volume II», published by the Institute of Competition Law in September 2014.

[1] Article publié dans «William E. Kovacic - An Antitrust Tribute - Liber Amicorum Vol. II» par The Institute of Competition Law, September 2014. * The seminal paper in the economics of collusion is George J. Stigler, A Theory of Oligopoly, 72 J. of Political Econ., 44-61 (1964). The present paper draws heavily from William E. Kovacic, Leslie M. Marx, Robert C. Marshall, & Halbert L. White, Plus Factors and Agreement in Antitrust Law, 110(3) Mich. L. Rev., 393-436 (2011), as well as Robert C. Marshall & Leslie M. Marx, The Economics of Collusion: Cartels and Bidding Rings (2d prtg 2013). I. Introduction 1. It is transparent to firms in an industry that their rivalry diminishes their profits. If the firms in an industry can successfully enter into a self-enforcing agreement

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