Cartel Essay Example | Topics and Well Written Essays - 1000 words

Cartel - Essay congressmanA cartel includes a secretive agreement in the midst of competing parties on total constancy proceeds levels, price fixing, credit conditions, and division of profits, bid rigging, discounts, customers, and areas to receive the supply, merchandise shares, and/or businesses to win contracts ( short letter of bewitching Trading 1). The main objectives of a cartel agreement are to dramatise prices, increase individual profitability, and inflict competition in the industry. Cartels have adverse effects on the industry as they reduce choices, inflate market prices, and inhibit the overall economy (Australian Competition and Consumer Commission 1). As such, cartels are culpable in most countries and take place in secrecy where it is not easy to establish their existence. However, a cartel has less influence on an industry than a monopoly. A cartel can be local, national or international where ion the recent times cartels steal billions of dollars from th e vulnerable customers every year (Australian Competition and Consumer Commission 1). We can classify cartels into public and private cartels. The government takes place in a public cartel where it implements the cartel agreement and defends the cartel from any liability as it seeks to benefits all the citizens. On the other hand, a private cartel is illegal under the antitrust laws as it seeks to benefit provided the parties in the cartel agreement to the disadvantage of everybody else. As such, the Competition Act, Article 101 TFEU of the EC Treaty, the first step Act (Office of Fair Trading 1), and EU competition law prohibit cartels that allows for price fixing, market sharing, limitation of production or supply or bid rigging (European Commission 1). Nevertheless, we hush have cartels in the world, which include the controversial Organization of Petroleum Exporting Countries (OPEC), which is the worlds largest cartel under the auspices of U.S. foreign trade laws. As such, b ased on my understanding of a cartel, we can experience a cartel in different industries. This is because cartels can actually occur in almost any industry where it involves good or services at the manufacturing, distribution, or marketing levels. However, some industries are more abandoned to cartels compared to others because of their mode of operations or their presidencyal structure. Ideally, industries with few competitors, where the products have similar characteristics, where communication channels between competitors are already established, or where the industry is suffering from over supply are prone to cartels (Office of Fair Trading 1). More specifically, cartels usually take place in an oligopolistic industry where there are few sellers, barriers to entry, and homogeneous products. Like in most European nations, cartels are illegal in the unite States of America. However, although many consider the Organization of Petroleum Exporting Countries (OPEC)as a cartel, the U.S. foreign trade laws protects it claiming it is an global organization with a legal, long-term, and significant objective. Nevertheless, cartels like drug cartels and all naked cartels are illegal in U.S. Notably, dissimilar agencies and legislations like the Competition and Consumer Act prohibits cartels under civil law and makes it a criminal offence for individuals and