Cartel project – Survey report – Factors bearing on the seriousness of cartel conduct 131210
10.
FACTORS BEARING ON SERIOUSNESS OF CARTEL CONDUCT
10.1
FACTORS BEARING ON SERIOUSNESS – PRICE FIXING
Question
D1E.
Now we would like you to consider the following additional facts to see if they change your view.
All things considered, please tell us how you would view an agreement between competitors on
prices if…..:
Figure 10.1 Factors bearing on seriousness – Price fixing1
Less serious
Just as serious
More serious
MOST
COMMON
RESPONSE
40.7
57.8
1.5
Just as serious
1.1
16.1
82.8
More serious
46.2
49.3.
4.5
The companies involved in the conduct were
small businesses
16.5
79.9
3.6
Just as serious
Elaborate steps were taken to make sure the
authorities did not find out about the conduct
1.4
20.3
78.2
More serious
15.8
79.2
5.1
Prices did not go up as a result of the conduct
The conduct included bullying another
company into joining the agreement
The reason for the conduct was that it would
prevent factories from closing and would
save jobs
The profits from the conduct were used to
make products that are environmentally
friendly
1
Just as serious
Just as serious
n=952 (representing respondents who responded ‘Yes’ to ‘Do you think that an agreement between competitors on
prices should be against the law?’, Question D1).
2
Comments
In terms of the most common response, none of the factors were seen as making an
agreement between competitors on prices ‘less serious’, although a significant minority
(40.7% and 46.2% respectively) of respondents considered that it would be ‘less serious’
when ‘Prices did not go up as a result of the conduct’ and ‘The reason for the conduct was
that it would prevent factories from closing and would save jobs’.
In terms of the most common response, the only two factors that were considered to make
the conduct ‘more serious’ were ‘The conduct included bullying another company into
joining the agreement’ and ‘Elaborate steps were taken to make sure the authorities did not
find out about the conduct’ (82.8% and 78.2% respectively).
In two cases where ‘the companies involved in the conduct were small businesses’ and ‘The
profits from the conduct were used to make products that are environmentally friendly’ the
clear majority (79.9% and 79.2% respectively) considered the conduct ‘just as serious’.
3
10.2
FACTORS BEARING ON SERIOUSNESS – MARKET ALLOCATION
Question
D2E.
Now we would like you to consider the following additional facts to see if they change your view.
All things considered, please tell us how you would view an agreement between competitors to
allocate customers if….
Figure 10.2 Factors bearing on seriousness – Market allocation2
Less
serious
Just as
serious
More
serious
Most
common
response
43.1
54.9
2.1
Just as
serious
The conduct included bullying another company
into joining the agreement
1.1
18.2
80.7
More serious
The reason for the conduct was that it would
prevent factories from closing and would save jobs
41.0
54.8
4.2
Just as
serious
The companies involved in the conduct were small
businesses
14.5
82.0
3.5
Just as
serious
Elaborate steps were taken to make sure the
authorities did not find out about the conduct
1.6
24.0
74.4
More serious
15.6
80.7
3.7
Just as
serious
Prices did not go up as a result of the conduct
The profits from the conduct were used to make
products that are environmentally friendly
Comments
In terms of the most common response, none of the factors were seen as making an
agreement between competitors to allocate customers ‘less serious’, although a significant
minority (43.1% and 41% respectively) of respondents considered that it would be ‘less
serious’ when ‘Prices did not go up as a result of the conduct’ and ‘The reason for the
conduct was that it would prevent factories from closing and would save jobs’.
2
n=898 (representing respondents who responded ‘Yes’ to ‘Do you think that an agreement between competitors to
allocate customers should be against the law?’, Question D2).
4
In terms of the most common response, the only two factors that were considered to make
the conduct ‘more serious’ were ‘The conduct included bullying another company into
joining the agreement’ and ‘Elaborate steps were taken to make sure the authorities did not
find out about the conduct’ (80.7% and 74.4% respectively).
‘Just as serious’ was the most common response by a clear majority where ‘The profits from
the conduct were used to make products that are environmentally friendly’, and ‘The
companies involved in the conduct were small businesses’ (80.7% and 82% respectively).
5
10.3
FACTORS BEARING ON SERIOUSNESS – OUTPUT RESTRICTION
Question
D3E.
Now we would like you to consider the following additional facts to see if they change your view.
All things considered, please tell us how you would view an agreement between competitors to
reduce production levels if….
Figure 10.3 Factors bearing on seriousness – Output restriction3
Less serious
Just as
serious
More
serious
Most
common
response
33.0
64.0
3.1
Just as serious
1.0
19.1
79.9
More serious
The reason for the conduct was that it would
prevent factories from closing and would save
jobs
38.8
57.0
4.2
The companies involved in the conduct were
small businesses
13.1
82.7
4.2
Just as serious
Elaborate steps were taken to make sure the
authorities did not find out about the conduct
1.4
22.3
76.3
More serious
The profits from the conduct were used to
make products that are environmentally
friendly
17.1
78.1
4.8
Prices did not go up as a result of the conduct
The conduct included bullying another
company into joining the agreement
Just as serious
Just as serious
Comments
None of the factors were regarded by respondents as rendering an agreement between
competitors to reduce production levels as ‘less serious’, although a significant minority felt
that where prices did not go up or the agreement was to prevent loss of jobs did feel that
the conduct would be less serious (33.0% and 38.8% respectively).
In terms of the most common response, the only two factors that were considered to make
the conduct ‘more serious’ were ‘The conduct included bullying another company into
3
n=920 (representing respondents who responded ‘Yes’ to ‘Do you think that an agreement between competitors to
reduce production levels should be against the law?’, Question D3).
6
joining the agreement’ and ‘Elaborate steps were taken to make sure the authorities did not
find out about the conduct’ (79.9% and 76.3% respectively).
‘Just as serious’ was the most common response for a clear majority where ‘The profits from
the conduct were used to make products that are environmentally friendly’, and where ‘The
companies involved in the conduct were small businesses’ (78.1% and 82.7% respectively).
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10.4 FACTORS BEARING ON SERIOUSNESS - COMPARISON BETWEEN TYPES OF CARTEL
CONDUCT
Figure 10.4 Factors bearing on seriousness - Comparison between types of cartel conduct4
Type of cartel conduct
Prices did not go up as a result of the conduct
40.7
Price fixing
57.8
1.5
Less serious
43.1
Market allocation
54.9
Just as serious
2.1
More serious
33
Output restriction
64
3.1
0
20
40
60
80
100
%
Type of cartel conduct
The conduct included bullying another company into joining the agreement
1.1
Price fixing
16.1
82.8
Less serious
1.1
Market allocation
18.2
80.7
Just as serious
More serious
1
Output restriction
19.1
79.9
0
20
40
60
80
100
%
4
For price fixing, n=952 (representing respondents who responded ‘Yes’ to ‘Do you think that an agreement between
competitors on prices should be against the law?’, Question D1); market sharing, n=898 (those representing respondents
who responded ‘Yes’ to ‘Do you think that an agreement between competitors to allocate customers should be against the
law?’, Question D2 ); output restriction, n=920 (those representing respondents who responded ‘Yes’ to ‘Do you think that
an agreement between competitors to reduce production levels should be against the law?’, Question D3 ).
8
Type of cartel conduct
The reason for the conduct was that it would prevent factories from closing and would save jobs
46.2
49.3
Price fixing
4.5
Less serious
41
Market allocation
54.8
Just as serious
4.2
More serious
38.8
Output restriction
57
4.2
0
20
40
60
80
100
%
Type of cartel conduct
The companies involved in the conduct were small businesses
16.5
Price fixing
79.9
3.6
Less serious
14.5
Market allocation
82
Just as serious
3.5
More serious
13.1
Output restriction
82.7
4.2
0
20
40
60
%
80
100
9
Type of cartel conduct
Elaborate steps were taken to make sure the authorities did not find out about the conduct
1.4
Price fixing
20.3
78.2
Less serious
1.6
Market allocation
Just as serious
24
74.4
More serious
1.4
Output restriction
22.3
76.3
0
20
40
60
80
100
%
The profits from the conduct were used to make products that are environmentally friendly
Type of cartel conduct
15.8
Price fixing
79.2
5.1
Less serious
15.6
Market allocation
80.7
Just as serious
3.7
More serious
17.1
Output restriction
78.1
4.8
0
20
40
60
80
100
%
Comments
For each reason that may have a bearing on respondent perceptions of the seriousness of
cartel conduct there were similar levels of seriousness across the types of cartel conduct.
For instance, when considering the scenario that the companies were small businesses, the
proportions for ‘just as serious’ were 79.9% for price fixing, 82% for market allocation, and
82.7% for output restriction.