What’s wrong with cartels?

Cartels have a significantly negative impact on economic welfare. Anti-cartelcompetition law- such as the provisions of pt IV div 1 of the Competition and ConsumerAct 2010 (Cth) -tries to tackle this negative impact through civil and criminal remedies.The prohibition of cartels is most commonly justified on economic grounds. However,reference is also often made to broader moral grounds for proscribing cartels-forexample, it is commonly stated that cartels are deceptive, unfair or engaged in a form ofcheating. This article advances a unified account of the moral status of cartels thatintegrates both economic and moral factors. It does so by emphasising the relationshipof cartel behaviour to the moral duty to promote the common good. Cartels are wrongbecause they undermine the role of open and competitive markets as a salient responseto an important social coordination problem in a way that leads to seriously harmfuleconomic outcomes. This combination of factors supplies a robust justification for bothcivil and criminal sanctions in appropriate cases, thereby affording a principledfoundation for the current framework of cartel regulation in Australia.