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What is a cartel?

In its simplest terms, a cartel is an agreement between businesses not to compete with each other. The agreement is usually secret, verbal and often informal.

Typically, cartel members may agree on:

  • prices
  • output levels
  • discounts
  • credit terms
  • which customers they will supply
  • which areas they will supply
  • who should win a contract (bid rigging).

These agreements are prohibited by the Competition Act and Article 101 TFEU of the EC Treaty. In addition, the Enterprise Act makes it a criminal offence for individuals to dishonestly take part in certain specified cartels, essentially those that involve price fixing, market sharing, limitation of production or supply or bid rigging.

Cartels can occur in almost any industry and can involve goods or services at the manufacturing, distribution or retail level.

Where are cartels?

Some sectors are more susceptible to cartels than others because of the structure or the way in which they operate. For example, where:

  • there are few competitors
  • the products have similar characteristics, leaving little scope for competition on quality or service
  • communication channels between competitors are already established
  • the industry is suffering from excess capacity or there is general recession.

More information

You can download more information on cartels and the OFT's powers of investigation and enforcement below:

Leniency and no-action (pdf 1.2Mb)

Cartels and the Competition Act 1998 (pdf 106kb)

Powers of investigation (pdf 96kb)

Covert surveillance in cartel investigations (pdf 178kb)

Covert human intelligence in cartel investigations (pdf 158kb) 

OFT's guidance as to the appropriate amount of a penalty (146kb)

The cartel offence: guidance on the issue of no-action letters for individuals (125kb) 

Powers for investigating criminal cartels (119kb) 

International Competition Network anti-cartel enforcement template (350kb)

Back to: Cartels

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