Hub and Spoke Cartels Among Various Industries

Abstract

Competition policy plays a crucial role on regulating, supervising, and monitoring the market. However, companies in hub and spoke cartel engage in collusive activities to control the market and its competitors. Effective cartel collusion requires a strict coordination between parties on the scheme, monitoring for compliance of the scheme, with added incentives to comply, while punishment for breaching compliance. Under US law, parallel price setting is illegal and along with other evidence like meetings with competitors, exchange of information, control of market and any other collusion with respect towards harming the consumer is considered a violation, while European commission competition law is based on “Article 101 of the Treaty, which prohibits an agreement among two or more operators towards restriction of competition”