Date of Award
Doctor of Law (SJD)
Professor Dr. Sompong Sucharitkul
Professor Dr. Christian Okeke
Professor Esq. Bart Selden
A free market system based on both freedom of contract and protection of property principles operates challenged by demand and supply. Under a free market system, demand by consumers and supply by producers determine the price and quantity of a product in a market. Competition policy leads suppliers to compete among themselves in sales terms or conditions. Competition toward attracting consumers through lower prices is an important principle for working a free market. Competition law is supposed to protect the functioning of the market.
However, it is against competition law principle for competitors to conspire to fix prices or to limit output. Price-fixing is the artificial setting or maintenance of prices at a certain level, usually higher than the level which would be normal without the price-fixing agreement. Sometimes, the competitors collude to maintain a level of production pre-arranged by themselves. Price-fixing and output restriction are typical to hard core cartels.
The hard core cartels cause diverse negative aspects to the economy. The hard core cartels take away consumers' benefits that competition among suppliers would have otherwise produced. Consumers in the normal markets purchase products by paying the price set by market mechanisms through the competition of suppliers. However, in a market where the sellers have agreed to set the price or the quantity of the product, consumers cannot avoid paying the higher price than in a market without the collusion.
In addition, cartels cause price-inflexibility regardless of a change in economic circumstances, thereby leading to malfunctions in a free market system. Such malfunction is due to restraining competition among suppliers as an essential element of the free market mechanism.
Lee, Sanghyun, "The Effective Approaches of International Law Regarding Cartels" (2008). Theses and Dissertations. 44.