On Friday, February 21, 2020, Jelle Jaspers successfully defended his dissertation “Cooperation against the law: Criminological study of the social organization of business cartels” (can be read here). For the Rotterdam Criminology Blog, we asked him a couple questions about his research.

1. What did you research and why?

I looked into the question how business cartels are able to endure in illegality. Existing criminological and socio-legal studies focus mainly on motives and opportunities and less so towards understanding the nature and social organization of cartels. In the past 30 years or so, efforts to discourage and punish cartels have increased globally. However, recently detected cases demonstrate that cartels typically last 5 to 6 years and sometimes even decades, before they are uncovered. I wanted to know how cartels are able to continue in times of increased regulation and enforcement.

2. How did you go about gathering this information?

The project is based on case-file analysis and semi-structured interviews. I analysed 14 cartel cases from the Dutch Authority for Consumers and Markets (ACM). For these cases I also interviewed 14 project managers responsible for the cartel investigation. The case studies formed the starting point for my study. While these cases are highly informative, containing a wealth of interesting data, they also tend to provide a one-sided image. I decided to add an extra empirical component: I conducted 34 semi-structured interviews with specialised competition lawyers and some of their clients; cartel participants. I also analysed public enforcement reports published by the European Commission and the publicly available parliamentary investigative reports into cartel agreements in the construction industry in the Netherlands and Quebec (Canada).

Looking back, due to issues of confidentiality some doors regarding data sources remained closed. I therefore had to incorporate other sources. But in the end, it worked out really well for my study. The combination of data sources and research methods provide a more balanced picture of cartels.

3. Can you briefly summarize the main conclusions of your research?

Firstly, cartel participants act in an illegal network, therefore they do not have the possibility to form legally binding contracts or use formal arbitration in case of internal conflicts or violation of internal agreements. Because of this, you might expect cartels to be full of conflict due to opportunistic participants, inherently unstable and short-lived by effect. However, the results off my study show that cartels operate using sophisticated systems of communication and social control. The paradox is that agreements and social control sometimes become so pressing that, as dependencies between competitors grow, parties that want to distance themselves from the cartel find it is nearly impossible to do so.  

Secondly, as cartel participants need to hide their illegal agreements from outsiders, you would expect them to prioritise secrecy and concealment of their activities. In the literature on organized crime the trade-off between effective coordination on the one-hand and concealment on the other is a well-known concept. Therefore, you would expect cartel communication to be minimized, especially written communication. However, the results in my study demonstrate that cartel participants often prioritise effective communication over maximising concealment. This will often leave a paper trail; written communication that is later used to prove the existence of the cartel. This was also the true for the following example: in this case cartel participants used codes to refer to different municipalities; their clients. In their internal communication offers of certain clients caused confusion among the cartelists as to which codes belonged to which municipalities. Extensive communication was needed to clear up the confusion and this correspondence was later used in evidence to prove the existence of the cartel. In that respect, concealment often proves ineffective.

My study shows that it is not so much isolation from their social environment that explains cartel longevity, but rather their embeddedness in existing social and institutional networks. In that respect, cartels are hidden in plain sight.

4. How does your research bring the academic community a step further?

In terms of theoretical implications, we can learn a lot from three decades of successful research into organized crime and illegal networks and put these lessons to use in corporate and white-collar criminological studies. More research should be geared towards understanding the nature and structure of corporate crime networks and how they are embedded in society, instead of focusing on the rogue employee or one-man/woman fraud masterminds.

5. What does this mean for everyday life?

One of the lessons for cartels is to look at the facilitators and people in the periphery of cartel networks. They hold information or key positions for the cartel to be able to function. Regulators can target these people and get them to speak up or provide crucial information about possible infringements to help detect cartels. Also, if we look at responses to and measures to prevent corporate and economic crimes, existing models such as the barrier model for organised crime, could prove useful as well.

6. What motivated you in pursuing this research?

The topic of my study. I was working on this topic since my master thesis and I had the feeling that I wasn’t quite finished with the subject matter. When I applied for an NWO grant and my proposal got accepted, I accepted the challenge.

Dividing the PhD project into smaller parts and presenting these at several international conferences proved a very fruitful approach in hindsight. But also creating the opportunity to take up visiting researcher positions in Manchester and Montreal motivated and inspired me along the way. This is something I would recommend to all PhD candidates: working together with other (international) research groups and colleagues is really worthwhile. The academic world is a community of researchers with similar interests – go out and call them, write them, meet them!

7. What next?

I currently work as a sr. consultant in financial crime compliance advisory. I hope to make a contribution to smarter approaches tackling financial crime in order to prevent criminal proceeds from entering and travelling through the financial system. My ambition is to put my academic knowledge and experience to good use in practice while at the same time keeping close tabs on the relevant insights and developments in the academic field.

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