Latin America Cartel Control

International cartelists today face antitrust investigations and possible fines from a score of national and supranational antitrust authorities. This paper provides quantitative information about the size and impacts of international cartel activity in Latin America and uses a sample of modern private cartels to evaluate the relative effectiveness of the four most active Latin American antitrust authorities: Argentina, Brazil, Chile, and Mexico. The sample consists of legal and economic information on 433international cartels discovered in Latin America and the rest of the world during 1990-2007. The need for assertive anti-cartel enforcement in Latin America is demonstrated by the large affected commerce and economic injuries of known international cartels. Affected sales of the 16 Latin American-region cartels exceeded US$20 billion. In addition, at least 84 large global cartels also fixed prices in Latin America, but only four of them were investigated. Affected sales in Latin America from discovered cartels both types totals $150 to $200 billion. The overcharges Latin American consumers were at least $35 billion in 1990-2007. More than 4000 companies (56 headquartered in Latin America) have been convicted of international price-fixing violations, of which more than 200 are recidivists. While more than US$48 billion in penalties has been imposed world-wide, it is doubtful that such monetary sanctions can deter modern international cartels. The three with the most consistent legal responses to global cartels are the United States, Canada, and the EU, which accounted for 95% of worldwide penalties. Yet, optimal cartel deterrence is frustrated by the failure of compensatory private suits to take hold outside of North America and the low fines in Asian and Latin American jurisdictions. Of the three selected jurisdictions, the Brazilian antitrust authority has the best record of anti-cartel enforcement in Latin America, but even CADE's surcharges are recouping less than 10% of the prosecuted cartels' damages. Without significant increases in cartel detection, in the levels of expected fines or civil penalties, or expansion of the standing of buyers to seek compensation, international price fixing will remain rational business conduct.