Global Price Fixing: Our Customers are the Enemy (Studies in Industrial Organization, 24)

Some books get written, others write themselves. This book is the latter type. I have devoted myselfto studying the economic organization of industries related to food and agriculture for almost twenty-five years. It has been my good fortune to work at places that tolerated my gadfly approach to research. So long as I produced a few publications each year and wooed a few graduate students to share those interests, I was free to pursue an array of topics: why firms diversifY, the competitive role of advertising, strategies for selling in overseas markets, measuring market power, and many others. Although firmly anchored in the eclectic analytical framework of industrial economics and focused on the food system, I traversed a wide field at will. Some years ago, I had pretty much convinced myself that naked price fixing was not a high priority for scholarship in these industries. True, collusion was rife in a few food industries, such as bid-rigging among suppliers of fluid milk to school districts in isolated rural districts. Ripping off milk money from school children is reprehensible enough, but the size of the economic losses from localized price fixing paled besides other sources of imperfect competition. The goal of Global Price Fixing is to describe and analyze the origins, operation, and impacts of global cartels in the markets for lysine, citric acid, and vitamins. The work is fundamentally a historical approach to understanding the interplay among personal motivations, economic forces, and the enforcement of the competition laws of the major industrial nations. The first chapter highlights the renewed importance of international price-fixing conspiracies after an absence of nearly 50 years. Two following chapters provide background on the economics theory and legal principles relevant to understanding cartels. Nine following chapters comprise the economic core of this book. Three chapters are devoted to each of the three cartels selected for intensive study: citric acid, lysine, and vitamins. The next four chapters then concentrate on the legal fallout from the discovery of the three cartels by the world's antitrust authorities. Chapter 17 provides a description of a few additional selected cartels with features not found in the lysine, citric acid, and vitamins cases. The penultimate chapter considers whether the antitrust resources of government agencies and private plaintiffs are sufficient to deter global price fixing in the foreseeable future. This final chapter attempts to identify major themes that appear throughout the book and to provide a summary of the ultimate impact of the global-cartel pandemic of the 1990s Front Matter....Pages i-xix Introduction....Pages 1-16 The Economics of Price Fixing....Pages 17-48 Anticartel Laws and Enforcement....Pages 49-98 The Citric Acid Industry....Pages 99-130 The Citric Acid Conspiracy....Pages 131-146 Economic Impacts of the Citric Acid Cartel....Pages 147-160 The World Lysine Industry....Pages 161-198 The Lysine Conspiracy....Pages 199-239 Economic Effects of the Lysine Cartel....Pages 241-276 The Global Vitamins Industry....Pages 277-304 The Vitamins Conspiracies....Pages 305-317 Effects of the Vitamins Cartels....Pages 319-337 U.S. Government Prosecution of the Cartels....Pages 339-398 Antitrust Prosecutions by Foreign Governments....Pages 399-409 The Chicago Criminal Trial....Pages 411-445 The Civil Suits....Pages 447-482 More Global Cartels....Pages 483-502 The Business of Fighting Cartels....Pages 503-520 Global Price Fixing: Summing Up....Pages 521-568 Back Matter....Pages 569-598