Managers, cartels and competition

Emmanuel Combe

Getting or staying involved in a cartel is a question for managers. In our article, we have sought to identify the specific incentives for managers to infringe competition law and the specific reasons why they are likely to participate in cartels. The article takes stock of the literature on this topic, using in particular a psychological approach to contextualise behaviour. The aim is to look at a number of elements (such as dismissal clauses or more generally the types of management) that can lead managers to engage in this type of behaviour, but also to consider solutions to prevent these managers, especially the most "unpredictable" ones, from violating the rules of law.

The theoretical framework is the well-known corporate governance framework. It is often invoked from the point of view of conflict of interest before the Competition Authority, both by managers (who claim that they had no choice in the behaviour adopted) and by shareholders (who argue, as in the hygiene and cleaning products case, that the manager acted in isolation and on his own initiative, disregarding the interests of the shareholders), without much success. The interests of managers and shareholders do not necessarily have to be pitted against each other. The latter may turn a blind eye because they consider that the practice in question runs only a low risk of sanction, whereas it allows for profit maximisation. At the same time, managers may have their own and quite different motivations for implementing the practice.