It is not collusion unless you get caught: the case of ‘Operation Car Wash’ and unearthing of a Cartel

Article

Signor, Regis, Love, Peter E. D., Vallim, Joao Jose B., Raupp, Alexandre B. and Olatunji, Oluwole. 2019. "It is not collusion unless you get caught: the case of ‘Operation Car Wash’ and unearthing of a Cartel." Journal of Antitrust Enforcement. 7 (2), pp. 177-202. https://doi.org/10.1093/jaenfo/jnz009
Article Title

It is not collusion unless you get caught: the case of ‘Operation Car Wash’ and unearthing of a Cartel

ERA Journal ID210785
Article CategoryArticle
AuthorsSignor, Regis (Author), Love, Peter E. D. (Author), Vallim, Joao Jose B. (Author), Raupp, Alexandre B. (Author) and Olatunji, Oluwole (Author)
Journal TitleJournal of Antitrust Enforcement
Journal Citation7 (2), pp. 177-202
Number of Pages26
Year2019
Place of PublicationUnited Kingdom
ISSN2050-0688
2050-0696
Digital Object Identifier (DOI)https://doi.org/10.1093/jaenfo/jnz009
Web Address (URL)https://academic.oup.com/antitrust/article/7/2/177/5480786
Abstract

In this article, we present findings from the Brazilian Federal Police's ongoing investigation referred to as 'Operation Car Wash', which led to an accusation of collusive bidding being presented to a cartel that comprised 16 construction contractors. While plea bargains from several contractors within the cartel have materialized, additional evidence needs to be provided by the investigations officials to ensure the adequate application of justice. In this article, we provide scientific evidence that can be used by the Brazilian criminal courts to demonstrate the presence of collusive bidding. The contributions of this article are two-fold: (i) a robust and reliable econometric model to prove the presence of collusive bidding is implemented, which meets the basic criteria defined by the judicial system for scientific evidence; and (ii) the negative economic impact of collusive bid rigging is quantified, which was much higher than the percentage admitted by those involved in their leniency agreements.

KeywordsCartel; Econometric model; Economic harm; Price fixing
ANZSRC Field of Research 2020330299. Building not elsewhere classified
330207. Quantity surveying
330203. Building industry studies
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Byline AffiliationsFederal Police of Brazil
Curtin University
Institution of OriginUniversity of Southern Queensland
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