Clear It Up feature for a more in-depth analysis of the difference between the two.

CLEAR IT UP

Collusion versus cartels: How to differentiate
In the United States, as well as many other countries, it is illegal for firms to collude since collusion is anti-
competitive behavior, which is a violation of antitrust law. Both the Antitrust Division of the Justice Department and

the Federal Trade Commission have responsibilities for preventing collusion in the United States.

The problem of enforcement is finding hard evidence of collusion. Cartels are formal agreements to collude.

Because cartel agreements provide evidence of collusion, they are rare in the United States. Instead, most collusion

is tacit, where firms implicitly reach an understanding that competition is bad for profits.

Economists have understood for a long time the desire of businesses to avoid competing so that they can
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