The Science Of ...

How cartels control prices, hinder competition and make life more expensive

(Click here for more "The Science Of" articles.)

A cartel is an agreement between competing firms or entities to control prices or exclude entry of new competitors into a market.

It is a formal organisation of sellers - or buyers - that agrees to fix selling prices, purchase prices or reduce production using a variety of tactics.

The most well-known cartel is, probably, the Organisation of the Petroleum Exporting Countries (Opec).

The Money Show’s Bruce Whitfield interviewed Ros Lake, Director in Competition at Norton Rose Fulbright.

Scroll down for quotes from the audio below.

Cartel members have an understanding that they won’t compete with each other.

Ros Lake, Director in Competition at Norton Rose Fulbright

Cartels can, in limited circumstances, be beneficial.

Ros Lake, Director in Competition at Norton Rose Fulbright

The majority of cartels are designed to elevate pricing.

Ros Lake, Director in Competition at Norton Rose Fulbright

South African cartels aren’t very successful.

Ros Lake, Director in Competition at Norton Rose Fulbright

We have ‘leniency’ legislation in South Africa to incentivise cartel members to expose other members of the cartel.

Ros Lake, Director in Competition at Norton Rose Fulbright

The Competition Act provides for certain exemptions.

Ros Lake, Director in Competition at Norton Rose Fulbright

A monopoly is not necessarily a bad thing. There are some very dominant, very efficient firms.

Ros Lake, Director in Competition at Norton Rose Fulbright

In the last year there’s been four ‘dawn raids’ on suspected cartels.

Ros Lake, Director in Competition at Norton Rose Fulbright

The ‘leniency law’ is the best way to crack cartels.

Ros Lake, Director in Competition at Norton Rose Fulbright

Subscribe to our Business Wrap Newsletter


This article first appeared on 702 : How cartels control prices, hinder competition and make life more expensive


Recommended

by NEWSROOM AI

CapeTalk welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

  • Racism (including offensive comments based on ethnicity and nationality)
  • Sexism
  • Homophobia
  • Religious intolerance
  • Cyber bullying
  • Hate speech
  • Derogatory language
  • Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the CapeTalk community a safe and welcoming space for all.

CapeTalk reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

CapeTalk is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

Read More
It's (largely) out of sight, but our way of life is based on global shipping

It's (largely) out of sight, but our way of life is based on global shipping

About 90% of world trade is transported on water. We interview the Chairman of Maersk SA about the science of global shipping.

Kit Group supplies uniforms for Africa (with personality and soul, nogal!)

Kit Group supplies uniforms for Africa (with personality and soul, nogal!)

Bruce Whitfield interviews Southern Africa’s leading manufacturer of work attire about the science of the work uniform.

The world is awash in counterfeit money (1 in 30 British pounds are fake)

The world is awash in counterfeit money (1 in 30 British pounds are fake)

SA officials seized R18.5m worth of fake money between 2012 and 2015. It’s a global problem worse than you probably realise.

How online classified advertisers such as Gumtree and OLX work

How online classified advertisers such as Gumtree and OLX work

We interview the country manager for OLX about the science of online classified advertisements.

How Bitcoin may be the death of money (and central banking) as we know it

How Bitcoin may be the death of money (and central banking) as we know it

Money and central banking as we know is about to change radically. We explain the science behind cryptocurrencies…

The science of retail in nation that loves to shop ‘till it drops

The science of retail in nation that loves to shop ‘till it drops

A retail expert discusses the ins and outs of this massively important sector of the economy.

What makes SA’s largest independent insurer and one of our best employers tick?

What makes SA’s largest independent insurer and one of our best employers tick?

Well-known for developing prepaid insurance sold in “starter packs”; we interview Hollard’s CEO…

How South Africa fell hopelessly in love with Soccer Laduma

How South Africa fell hopelessly in love with Soccer Laduma

Millions of South Africans can’t wait for the next edition. The fascinating story of the wildly successful Soccer Laduma…

How small firms are taking on the Goliaths of the hotel sector

How small firms are taking on the Goliaths of the hotel sector

How a tiny hotel group is successfully taking on its much larger rivals....

How groups such as Isis obtain funding for terrorism

How groups such as Isis obtain funding for terrorism

Bernard Hotz, Head of Business Crime and Forensics at Werksmans Attorneys, discusses the science of terrorism funding.

Popular articles
More arrests are imminent in connection with the cash-in-transit heists - Hawks

More arrests are imminent in connection with the cash-in-transit heists - Hawks

Seven suspects were arrested in Limpopo in less than 24 hours after a cash-in-transit vehicle was blown up in the province.

Consumers beware of illegal, deadly weight-loss products

Consumers beware of illegal, deadly weight-loss products

Consumer journalist Wendy Knowler and a medical testing expert put several harmful weight-loss products under the microscope.

Madiba’s private secretary Zelda la Grange opens up about money (hers and his)

Madiba’s private secretary Zelda la Grange opens up about money (hers and his)

Bruce Whitfield interviews La Grange about her and Madiba's attitude to money (hopes and fears, successes and failures, etc.)

Criminals targeting homes with aluminium windows, warns neighborhood watch

Criminals targeting homes with aluminium windows, warns neighborhood watch

The Panorama, Welgelegen and Plattekloof Neighbourhood Watch has identified a new house break-in trend.

‘I started my thriving business with R5000 (and made a profit in the 1st month)’

‘I started my thriving business with R5000 (and made a profit in the 1st month)’

After 3 years there are 3 Nic Harry stores (incl online) that sell 100 000 pairs of socks in over 20 countries around the world.

5 contributing factors to the Western Cape's growing green economy

5 contributing factors to the Western Cape's growing green economy

GreenCape CEO Evan Rice unpacks why our province is seeing a great deal of success with sustainable energy projects.