When Competition Looks Like Coordination: What Can We Learn from the US Experience?

Toronto, Ontario
16 June 2009
Hosted By: NERA Economic Consulting

Recent amendments to the Competition Act narrowed allegations of criminal conspiracy to situations where competitors have agreed to fix prices, allocate customers, or restrict supply. Such agreements are per se illegal and it is no longer necessary to prove undue lessening of competition in the face of such an agreement. This change may deter criminal activity and make it easier for the government to secure a criminal conviction for members of a cartel, but do the amendments raise concerns that firms acting innocently in parallel may be accused of collusion? Can economic analysis help in such cases? Are strategic alliances at risk?

The experience in the US suggests that there is still a strong role for economic analysis in determining whether observed market behavior is the result of individual firms acting in their self interest when faced with common market conditions or, alternatively, can only be explained by overt coordination.

In this NERA seminar, Interim Commissioner of Competition Melanie Aitken discussed the amendments to the Competition Act in the context of the delimitations of the amended provisions. She was joined by NERA Senior Vice Presidents Todd Morrison and Dr. Lauren Stiroh, who shared their views on how the amendments will affect the role for economic analysis in the grey area between criminal cartels and parallel behavior. The presentation included examples of the kinds of analysis that have been used in the US to successfully defend companies and individuals accused of cartel activity. Mark Berenblut, Senior Vice President and Head of NERA's Toronto office, chaired the panel.

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