cartel

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cartel

Organization of a few independent producers for the purpose of improving the profitability of the firms involved (see oligopoly). This usually involves some restriction of output, control of price, and allocation of market shares. Members of a cartel generally maintain their separate identities and financial independence while engaging in cooperative policies. Cartels can either be domestic (e.g., the historical example of the German IG Farben) or international (e.g., OPEC). Because cartels restrict competition and result in higher prices for consumers, they are outlawed in some countries. The only industry operating in the U.S. with a blanket exemption from the antitrust laws is major league baseball, but several U.S. firms have been given permission to participate in international cartels.

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