cartels

Cartels are formal or informal agreements between independent firms, organizations, or individuals to coordinate actions that would otherwise be competitive. The primary objectives are to influence market conditions, control prices, limit production, allocate territories, or share markets. While some cartels arise in legitimate contexts, such as trade associations that set industry standards, the term is most commonly associated with illegal practices that breach antitrust or competition laws.

The most widely recognized illegal cartels involve price fixing, where members agree to set uniform prices for goods or services, thereby eliminating price competition. Examples include the 1990s lysine cartel, which raised global prices for an animal feed additive, and the 2000s European truck manufacturers’ collusion on emission standards. Antitrust authorities in the United States, the European Union, and many other jurisdictions actively investigate and prosecute these violations, imposing substantial fines and, in some cases, criminal sanctions.

Cartels also exist in illicit economies, notably drug trafficking organizations that control the cultivation, production, and distribution of narcotics. These groups, often labeled "drug cartels," use violence and corruption to maintain monopolistic control over illicit markets, posing significant challenges to law enforcement and public health.

Historically, cartels emerged during the industrial revolution when firms sought to stabilize volatile markets. Over time, the rise of competition policy led to a legal framework that condemns coordinated anti‑competitive behavior. Nevertheless, cartels persist, exploiting loopholes, confidentiality, and complex supply chains. Their impact includes higher consumer prices, reduced innovation, market inefficiencies, and, in the case of criminal cartels, broader social harm. Ongoing monitoring, whistleblower programs, and international cooperation remain central to detecting and dismantling cartels.