Berkeley Program in Law and Economics

The Brazilian competition law establishes that every kind of economic power abuse is against the economic order, hence, anticompetitive. The classic example of anticompetitive conduct is price fixing or cartel. The main challenge regarding the implementation of a public policy against such horizontal collusions is to adequately show that an agreement among competitors exists, especially in oligopolistic markets. Our hypothesis is the following: if the administrative competition law does not require an agreement in order to label a conduct abusive, it should be legally possible to reach unwanted coordinated market behavior even in the absence of an agreement. However, as tacit collusion results exclusively from converging individual interests (spontaneous cooperation), there is no reasonable conduct order available to courts to remedy such evil in case of conviction. The Unified Theory of Collusion is proposed as a means to partially overcome the referred practical limitation, by offering a possibility of restricted, but uniform legal treatment. At the end, a step-by-step guideline for analysis of cartel and tacit collusion cases is provided.