What are hub and spoke cartels?

Hub-and-spoke arrangements are horizontal restrictions on the supplier or retailer level (the “spokes”), which are implemented through vertically related players that serve as a common “hub” (e.g., a common manufacturer, retailer or service provider).

What is likely to be at the hub of a hub and spoke cartel?

Most cartels are composed exclusively of firms that would otherwise be in competition, but in a hub-and-spoke cartel, those competitors (“spokes”) conspire with the assistance of an upstream supplier or a downstream buyer (“hub”).

How the hub and spokes cartel can be regulated?

In India, a Hub and Spoke cartel can be punished through indirect application of provisions under Section 3(3) and 3(4), by proving horizontal and vertical arrangements. The jurisprudence of the Hub and Spoke cartel in India has not developed fully, unlike the case in the US and Europe antitrust jurisdictions.

What is a cartel in competition law?

A cartel is a group of similar, independent companies which agree (expressly or tacitly) together to fix prices, to limit production or development, to share markets or customers between them or other similar type of restriction of competition. Action against cartels is a specific type of antitrust enforcement.

Who breaks monopolies?

3. William Howard Taft: Break up all illegal monopolies by bringing lawsuits against them under the Sherman Act.

How are cartels formed?

A cartel is a grouping of producers that work together to protect their interests. Cartels are created when a few large producers decide to co-operate with respect to aspects of their market. Once formed, cartels can fix prices for members, so that competition on price is avoided.

What ended monopolies?

Approved July 2, 1890, The Sherman Anti-Trust Act was the first Federal act that outlawed monopolistic business practices. The Sherman Anti-trust Act of 1890 was the first measure passed by the U.S. Congress to prohibit trusts.

How does a cartel work?

A cartel is a collection of independent businesses or organizations that collude in order to manipulate the price of a product or service. Cartels are competitors in the same industry and seek to reduce that competition by controlling the price in agreement with one another.

What is cartel example?

What is an Example of a Cartel? Some examples of a cartel include: The Organization of the Petroleum Exporting Countries (OPEC), an oil cartel whose members control 44% of global oil production and 81.5% of the world’s oil reserves.

What is a cartel?

Why is it called a cartel?

In English, a cartel was originally a letter of defiance. Later the word came to be used for a written agreement between warring nations to regulate such matters as the treatment and exchange of prisoners. Another type of agreement, a combination of commercial enterprises, is now called a cartel.

How were monopolies broken up?

The last great American monopolies were created a century apart, and one lasted over a century. The Sherman Antitrust Act banned trusts and monopolistic combinations that placed “unreasonable” restrictions on the interstate and international trade markets.

What common goal did trusts and cartels share?

Cartels, monopolies, trusts, and horizontal and vertical integration all share the goal of what? Increasing profits.

What is cartel and types of cartel?

Types of Cartels Price Cartels – They fix the minimum prices per their demand-supply ratio. Members cannot sell products below those prices. Term Cartels – They agree on business terms on a routine basis. Each member is obliged to follow the terms of trade.

What is the purpose of cartel?

The purpose of a cartel is to establish greater control over a market and eliminate competition through collusion, thereby making it easier for the member firms to earn more profit.

Who ended monopolies?

What is a hub-and-spoke cartel?

The first comprehensive economic and legal analysis of hub-and-spoke cartels, with detailed case studies. A cartel forms when competitors conspire to limit competition through coordinated actions.

Are hub and spoke cartels a violation of competition law?

Although not every information exchange during this interaction is considered as a violation of Competition Law by cartelization, there are some criteria taken into account in order to conclude that a Hub and Spoke Cartels have been formed.

What is a hub and spoke conspiracy?

From Wikipedia, the free encyclopedia A hub-and-spoke conspiracy (or hub-and-spokes conspiracy) is a legal construct or doctrine of United States antitrust and criminal law. In such a conspiracy, several parties (“spokes”) enter into an unlawful agreement with a leading party (“hub”).

Is hub required to collude or stabilise Cartel?

• Hub is not required to collude, nor stabilises cartel (Van Cayseele) • Interests of supplier and retailer are rarely aligned, except in the unusual cases (which do not justify per se approach) • This suggests that mixed horizontal/vertical cases are rarely suitable