Tacit Collusion

Tacit collusion is a form of strategic coordination that produces cartel-like effects without direct communication between firms. It typically arises in oligopolistic markets where the strategic decisions of each undertaking are influenced by the conduct of its competitors. Despite strong economic foundations, EU and US antitrust authorities have been reluctant to recognize tacit collusion, focusing instead on evidence of communications, information exchanges, or other factors suggestive of conscious or intentional coordination. As a result, tacit collusion often escapes antitrust enforcement. More recently, similar concerns have emerged in digital markets, where pricing algorithms can autonomously coordinate without human input or communication. Various approaches have been proposed to address this enforcement gap. However, none of them had influenced the practice of EU and US competition authorities, which continue to apply the traditional and well-established ‘parallelism plus’ doctrine.