A cartel is an illegal agreement between two or more competitors not to compete with each other. The sole purpose of cartels, which usually involve a secret conspiracy, is to make more profit at the expense of their customers. As such, they are a crime against consumers. They cause consumers to pay more for goods and services than they otherwise would have paid. There are different types of cartels:

  • Price fixing: Competitors illegally agree the price for, or discounts on, goods or services.
  • Market sharing: Competitors illegally agree on which locations each of them can or cannot operate in, or customers to whom they can or cannot sell. They also divide locations and/or consumers up among competitors.
  • Limiting production: Competitors illegally agree to control the amount of goods or services provided, in order to ensure that prices remain high.
  • Bid-rigging/collusive tendering: Collusive tendering involves competitors illegally agreeing on who will win a tender. Bid-rigging or collusive tendering may take the form of any or all of the specifically prohibited activities, by fixing prices, sharing markets or limiting access to goods or services.

A cartel is a crime

These types of agreements are crimes; they breach section 4 of the Competition Act, and Article 101 of the Treaty on the Functioning of the European Union, formerly Article 81 of the EU Treaty.

Where we get enough evidence to show that a cartel may exist, the CCPC will submit a file to the Director of Public Prosecutions (DPP) with a recommendation that the parties involved be prosecuted on indictment. Competition offences committed after 1 July 2002 are prosecuted on indictment in the Central Criminal Court. In those circumstances, where the CCPC does not believe that the allegations warrant prosecution on indictment, the CCPC may itself bring a summary prosecution in the District Court.

Businesses and individuals found guilty of hardcore cartel offences face a number of penalties, including fines and imprisonment.

Businesses and individuals convicted of cartel offences face a number of penalties, including fines and imprisonment.

  • An undertaking convicted on indictment of participating in a cartel can be fined up to €5m or 10% of turnover, whichever is greater. Similar fines may also be imposed on individual managers or directors together with a maximum of 10 years imprisonment.
  • The maximum penalty for a summary prosecution is a fine of €5,000 and up to six months imprisonment.

The sanction of imprisonment applies only to hardcore cartels.  Other competition offences prosecuted in the criminal courts are subject only to the fines described above.

Click here for cases which have been prosecuted in the criminal courts.

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