Sleeping With the Enemy: Tales of Yankee Power, Globalization, and the Transformation of Economy by Cartel in the European Union

SLEEPING WITH THE ENEMY: TALES OF YANKEE POWER, GLOBALIZATION, AND THE TRANSFORMATION OF ECONOMY BY CARTEL IN THE EUROPEAN UNION Regulating Cartels in Europe: A Study of Legal Control of Corporate Delinquency. Christopher Harding and Julian Joshua. Oxford: Oxford University Press, 2003. Pp. 230, $74.00 (Hardcover). Christopher Harding and Julian Joshua's Regulating Cartels in Europe: A Study of Legal Control of Corporate Delinquency (Regulating Cartels) is a significant and well-written book that deserves to be widely read by scholars, practitioners, and students in the United States as well as in Europe and other jurisdictions with antitrust laws. For those readers to whom European Community (E.G.) competition law remains largely a mystery,1 this book also serves as a good introduction to the European system because of its detailed description in the cartel context of the development of the European Community's substantive and procedural rules for handling enforcement of several varieties of competition law offenses, including judicial review and what Europeans call "rights of the defence."2 One attribute of the book that is particularly valuable to 'an American or other non-European audience is its comparative treatment3 of the historical, cultural, and philosophic underpinnings of the "cartel offence" in Europe and the United States. The "cartel offence" is a general reference to antitrust offenses generally regarded as the most serious of those engaged in by cartels. They include violations such as price-fixing, market-sharing, limiting supply or production, or bid-rigging. In the United States, at least, these activities would all be considered per se violations of the Sherman Antitrust Act, and defenses based on any alleged reasonableness of the conduct would not be heard. These offenses are consistently and widely condemned on an international basis.4 Harding and Joshua present an interesting etymology5 of the term "cartel," which is known to traditional international lawyers (and a few others)6 as the negotiated truce in wartime conventionally used for the exchange during hostilities of prisoners of war. Historically, the cartel was an agreement to suspend hostilities, and this definition echoes in the "modern pejorative meaning of 'cartel' as an arrangement of truce, whereby natural rivals come together in uneasy alliance."7 This connotation follows from an earlier meaning on the European continent of the "cartel of chivalry," originally referring to "the terms of a combat" and later "simply the challenge" to engage in combat8 Harding and Joshua refer to cartel participants as "sleeping with the enemy"9 to capture the ambiguous relationship of intimacy and hostility reflected when competitors become bedfellows for economic gain at the expense of the public. On both sides of the Atlantic, "cartel" now refers to business competitors engaged in the most egregious forms of antitrust violations, such as price-fixing, market allocation, and bid-rigging. Under U.S. antitrust law, these are per se offenses, in that business or economic justifications for the conduct are so unlikely to suffice that they seldom will be considered by courts.10 The U.S. Supreme Court long ago announced that the federal courts will not determine whether prices fixed by conspiracy or agreement in lieu of market forces were reasonable prices; such prices were per se unreasonable not because of their level but because they were fixed.11 Harding and Joshua trace the development of cartel regulation in Europe, drawing on a comparative analysis of their treatment of cartels in the United States. The contrast helps to highlight the economic, cultural, philosophical, and legal differences in the perception of the desirability of condemning cartels. In the United States public outrage over the rapacious Standard oil Trust and others in the late 188Os led to the passage of the Sherman Antitrust Act of 1890.12 In Europe cartels were viewed favorably as engines of industrial development driving the economic growth of Europe, especially in Germany. …