ETYM French, from Late Lat. cartellus a little paper, dim. from Latin charta. Related to Card.
1. An affiliation among businesses or organizations to regulate trade or prices.
2. An agreement between belligerents for the exchange of prisoners.
3. A letter of defiance or challenge; a challenge to single combat.
Association of business organizations, to limit competition and maintain prices; alliance of political parties.
Agreement among national or international firms to fix prices for their products. A cartel may restrict supply (output) to raise prices in order to increase member profits. It therefore represents a form of oligopoly. OPEC, for example, is an oil cartel.
National laws concerning cartels differ widely, and international agreement is difficult to achieve. Both the Treaty of Rome and the Stockholm Convention, governing respectively the European Union (EU) and the European Free Trade Association (EFTA), contain provisions for control. In Germany, cartels are the most common form of monopolistic organization. In the US, cartels are generally illegal. The Sherman Antitrust Act 1890 prohibited cartels, but legislation passed during the Great Depression permitted industries to enact “codes of fair competition”. These were declared unconstitutional 1935, and public cartels in coal mining, oil production, and agriculture largely ended after World War II.