Impact of Vertical Exclusionary Contracts on Prices and Welfare: Theory and Empirical Evidence

This paper represents an analysis of the impact of the Norwegian fish cartel in Russia that existed from 2011 to 2013 – a series of vertical restrictive agreements between importers and producers of Atlantic Salmon (Federal Antimonopoly Service case №1 11/109-12) on the consumer prices of salmonids on the Russian market in the appropriate period. Methodologies like event studies, before-and-after and difference-in-differences were used to set up a timeline of events relating to cartel activity and develop models to estimate the economic damages incurred by consumers. Furthermore, the decision made by FAS against the defending companies that was later overturned in court was examined in the context of the conducted analysis. At present, the results indicate no significant positive correlation between the activity of the Norwegian fish cartel and consumer prices, which points to the possibility of the FAS decision being a false positive and, thus, shows several gaps in current antitrust enforcement. The results and conclusions presented in this paper could serve as implications for potential improvement of the current investigative processes of FAS.