Advantages And Disadvantages Of Cartels

712 Words3 Pages
To a certain extent, we live in a free country. Especially economically there is a lot of freedom to enjoy. The Netherlands is not the only country which allows freedom on this scale, there are a lot of countries in which great economic freedom is very common. That there are certain rules to follow, may sound quite logic. There are limits called laws, which may not be crossed. This paper will inform the reader about one particular aspect of these limitations: forming cartels. A cartel is an illegal cooperation between different companies, which is profitable for these particular companies and only for these companies. Though, why is teamwork suddenly illegal and what is done against it? Firstly, this paper will give some more information about why cartels are not allowed. Secondly, it will inform the reader about what the government does to punish the companies involved. Thirdly and finally, it will give some examples of this phenomena. The formation of a cartel causes a lot of problems on the market. Cartels are based on agreements between different companies. The companies work together, in order to gain more profit for themselves. The formation of a cartel is harmful for other companies on the market as well as for the consumers and that is why forming a cartel is illegal. Most of the time other companies, which are genuinely playing by the rules, are getting overwhelmed and side-lined, because they cannot compete against such a strong cooperating unit. Also, for
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