A new OECD recommendation calls for concerted action against price fixing and other anti-competitive agreements among competitors that amount to "hard-core" cartels. Such cartels are the most flagrant violations of competition laws. They hurt consumers by raising prices and restricting supply. As a result, goods and services are unavailable to buyers or unnecessarily expensive. It is important to take effective action against hard-core cartels because they distort world trade and create waste and inefficiency in countries where markets would otherwise be competitive. Member countries should ensure that their own competition laws are effective and include powerful investigative tools. There should be sanctions against those who engage in hard-core cartels, and for those who fail to comply with investigators' demands. In addition, countries should review their laws periodically to ensure that exemptions are not broader than necessary to achieve their overriding policy objective. This is consistent with the OECD Ministers' agreement last May to work towards regulatory reform by eliminating unwarranted gaps in competition law.

It is in the interest of member countries to combat hard-core cartels and to cooperate with each other in doing so. The Recommendation explains that cooperation is particularly important because the cartels operate in secret. Necessary evidence may exist in a number of different countries. Members should make every effort to enforce their own anti-cartel laws, taking into account other countries' national interests, and increase cooperation as long as it is consistent with their laws and regulations. The Recommendation calls attention to particular forms of cooperation. One example is the principle of "positive comity" relating to anti-competitive conduct in one country's borders that is harmful to consumers in another country. Another type of cooperation suggested by the Recommendation is to share documents or information that one country has in its possession and to comply with requests to gather information from relevant authorities.

Currently, most competition authorities are not authorized to share such investigatory information with foreign authorities. Such international information-sharing is used effectively in enforcing other laws (such as securities law) and has been very effective when used in competition cases. Member countries are encouraged to review all obstacles to effective cooperation against hard-core cartels and to consider eliminating them through legislation or by other means. The Recommendation recognizes that sharing confidential information would require satisfactory protection of that information and may require resolution of other issues.

With this Recommendation, the OECD will have defined and condemned a particular kind of anti-competitive conduct. The Recommendation is directed specifically to OECD members. Nonmember countries are invited to associate themselves with it.

For further information please contact the OECD Communications Division or Mr. Terry Winslow, Principal Administrator, Competition Law and Policy Division, Directorate for Financial, Fiscal and Enterprise Affairs, OECD; tel. 33 (0)1 45 24 19 72 -- fax. 33 (0)1 45 24 96 95. Other relevant information is available on the division's Internet site at: http://www.oecd.org/daf/clp.