This presentation by Prof. John M. Connor from Purdue University, West Lafayette, US was made during the discussion on "Sanctions in Anti-trust cases" held at the 15th Global Forum on Competition on 2 December 2016. More papers and presentations on the topic can be found out at www.oecd.org/competition/globalforum/competition-and-sanctions-in-antitrust-cases.htm

1. OECD’s 15th Global Forum on
Competition: International
Cartels, 1990-2016
John M. Connor,
Professor Emeritus,
Purdue University
jconnor@purdue.edu
Paris, December 2, 2016

2. 1. Cumulative Corporate Penalties,
Regions or Jurisdictions, Semi-Decades
0.0
20.0
40.0
60.0
80.0
100.0
120.0
1990-94 1995-99 2000-04 2005-09 2010-15
ROW
EU NCAs
EC
USA &
Canada
Total $107 billion
August 2016 2

3. 2. Trend in Cumulative Penalties
Projected to Reach $280 billion by 2022
R² = 0.9997
0.0
50.0
100.0
150.0
200.0
250.0
300.0
1995.0 2000.0 2005.0 2010.0 2015.0 2020.0
Mar 5, 2016 3J M Connor, Purdue U.

4. 3. Intl. Cartel Fines Imposed by NCAs
(EU’s National Authorities) 1989-July 2016
0.0
1.0
2.0
3.0
4.0
5.0
1989 1992 1995 1998 2001 2004 2007 2010 2013 2016
Total $23.5 billion
Year of Decision
August 2016 4J M Connor, Purdue U.
$billions

5. 4. Total Fines in ROW Exploding
0.0
2.0
4.0
6.0
8.0
10.0
12.0
1990-1994 1995-1999 2000-2004 2005-2009 2010-2016
0.003 0.065
Year Cartel Penalized
August 2016 5
$billion
Total $17.5 billion

6. 5. Number of Antitrust Jurisdictions Prosecuting
International Cartels Is Climbing
0
10
20
30
40
50
60
70
1990 1995 2000 2005 2010 2015
NumberofJurisdictions
Year cartel was investigated
August 2016 6J M Connor, Purdue U.

7. 6. Corporate Penalties Are Mostly
Imposed on EU & U.S. Companies
0.4
2.1
0.7
1.4
26.3
48.5
71.1
Oceana
Lat. America
Other Europe
Africa
Asia
US & Canada
W. Europe
$ Billion
Location of headquarters of company or its ultimate parent group.
Mar 5, 2016 7J M Connor, Purdue U.

8. 7. Disposition of Executives Charged
for International Price-Fixing
0 50 100 150 200 250 300
Other
Banned or Barred
Acquitted,…
Fugitives
Indicted, waiting
Guilty, waiting
Prison only
Fined only
Fined & Prison
August 2016 8J M Connor, Purdue U.

9. 8. Trend in U.S. Private Recoveries
R² = 0.3285
0
2
4
6
8
10
12
14
16
18
1990 1995 2000 2005 2010 2015 2020
2016-2020 Projected
Year First Company Settles (Zero Years Omitted)
Mar 5, 2016 J M Connor, Purdue U. 9

10. 9. Mean Severity of Penalties on
662 International Cartels, 1990-2015
12
30
16 15 14
16
10
21
0
5
10
15
20
25
30
35
EC EU NCAs US Canada Other
Nations
Private,
No. Am.
Private,
World
World
Penalties/AffectedSales(%)
August 2016 10

11. 10. U.S. Damages, Penalties, and the
Optimal Penalty: The Lysine Cartel
0
100
200
300
400
500
$2010 Million
Mar 5, 2016 11
Note: Optimal penalty assumes 30% detection, 80% conviction probability.

12. 12. Why Over-Deterrence is Rare
• Attorney anecdotes do not give numbers
• Serial collusion and recidivism is high.
• Affected commerce is typically too low.
• Prejudgment interest is rarely rewarded,
which longevity, slow decisions exacerbate.
• No compensation for dead-weight losses
• Anecdotes are ex post: fail to consider low
probabilities of detection and conviction