A presentation at the SSNED workshop last week highlighted that businesses are still playing the same tricks after 100 years of competition laws. These laws are known as ‘antitrust’ because of their US heritage. In the 1880s, Standard Oil used an old legal concept – a trust – to combine the decision making of a group of otherwise competitive companies. Under the trust structure they could cooperate rather than compete. These structures were outlawed in the US by the Sherman Act.
Professor Lino Briguglio from Malta presented a modern day version. His presentation is here. In summary, a group of competitors in road construction and asphalting formed a joint company to tender for government contracts. They did not individually tender and when their joint company won the tender the work was distributed internally. So competition gone and a cozy life for all!
The case highlights two points. First, as Professor Bill Kovacic noted at the workshop, the best place to start looking for collusion for countries introducing new competition laws is often government contracting. This is usually an area ripe with cartels.
And second, the more things change, the more they stay the same!