A breakfast cartel is colloquially a cartel that is introduced by the cartel participants "over breakfast", that is, in an informal form. In contrast to a normal cartel, no written contracts are negotiated here, but rather only agreements on joint procedures are made in informal meetings.
On April 1, 1899, the Association of German Electricity Companies was founded, which was the first to agree to increase the list price by 10%. This cartel went down in history as the Breakfast Cartel. It got its name because the order in which the central offices were assigned was determined by the seating arrangements at breakfast.
Advantages of the breakfast cartel
The biggest advantage of the breakfast cartel over other cartels is that it can practically not be proven. Because no incriminating material can be discovered during a raid by the antitrust authorities because it does not exist. The breakfast cartel has the advantage that it is relatively safe from detection. Since the leniency program came into force , companies that uncover a cartel in which they were themselves involved can expect less punishment or even complete impunity. The breakfast cartel is also comparatively safe from this type of exposure because it is not possible to present incriminating material. Disclosure of the agreements by the competition authorities cannot be ruled out.
Occurrence of the breakfast cartel
The breakfast cartel is mostly used in illegal cartels, as it usually has no advantage over a formal agreement in legal cartels. The attraction of the lack of verifiability is no longer applicable, at the same time it has the disadvantage that breaches of contract by the cartel partner are difficult to sanction, which is why the breakfast cartel is often considered unstable. As with all cartels, there is a high incentive for the participating companies to enrich themselves in the short term by breaking the agreements and offering a larger quantity at a lower price than the cartel on the affected market in order to achieve a higher market share .
Colloquially, one also speaks of breakfast cartels when spouses or partners simultaneously hold high positions in a popular political party, e.g. B. State managing director and member of the state parliament.