Cartels are collusive agreements—explicit or tacit—that seek to restrict or distort economic competition and, thereby, benefit cartel members at the expense of third parties (usually the consumer). As a form of noncompetitive behavior, they possess many of the same characteristics as monopolies, oligopolies, trusts, vertically integrated firms (consolidations of supply chains), and zaibatsus, which are financial and industrial groups that once dominated the Japanese economy. Due to their potential harmful effects on consumers, governments in many countries (e.g., the United States, Canada, and the European Union) have passed legislation to restrict their formation and potentially harmful activities.

Cartels are organized to obtain larger profits for their members, which raises a number of ethical issues related to efficiency, fairness, and income distribution. One commonality among cartels is ...

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