Screening for Conspiracies : Applications for Litigation, Pre-Litigation, Regulation and Internal Monitoring

A screen is a statistical test designed to detect conspiracies aimed at illegally manipulating a market. Competition authorities, academics and consultants have designed a variety screens to detect competition problems, and the use of such screens is increasing. In this paper, we first describe screens designed to detect bid rigging, price fixing, market allocation schemes and commodity market manipulation. Next, we discuss the ways in which screens can be used by plaintiffs and defendants in antitrust cases. These include (i) class certification, (ii) disproving the existence of a cartel; (iii) establishing the immateriality of a cartel; (iv) estimating the effects and damages of collusion; (v) assisting companies in deciding when and whether to file a leniency application; and (vi) assisting managers in large companies to monitor for data manipulation (e.g. falsified reimbursement or accounting statements) and price fixing in purchasing