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Transcript of Arthouse Cartel
both firms held this much because they absorbed other art auction firms by buying them out
so, there was no need to make an agreement about this 1990s Challenge 3 Sotheby's & Christie's Arthouse Cartel Why should we study this cartel? A tale of two auction houses 1. Challenge Challenge 2: Monitoring Each Other Implications 1744 1950s 1766 1960s 1970s 1980s November 1993
Collusion between Sotheby's and Christie's Public Announcement of Rates
Shared Internal Memos of Instruction
Shared Client Lists Pre-Agreement Stories of Defection Announcement
Loeb Account Challenge 3 Collusion Agreement Coordinating Pricing Decisions 1. No negotiating with clients
2. No “charity donations”
3. No concessions to sellers
4. No more cash advances to sellers
5. No more poaching employees Both Buyers and Sellers were affected by the Cartel Resolution Verdict Cartel Formation
Suspicions of the US Department of Justice led to a subpoena in 1999
They demanded 600 pages of information from Christie's about the collusive activities Christie's Cartel falls apart
The UK Office of Fair Trading started investigating this cartel in 1996.
In 1997, the US Department of Justice demanded to see communications between these firms dating back to 1992. The Justice Department decided not to prosecute Christie's in return for its cooperation on the case.
Christopher Davidge resigned his position as CEO
Christie's paid $256 million in civil suits. Sobethy's Pleads guilty to conspiring with Christie's in return for its cooperation in the case.
Agreed to pay a fine of $256 million in fines
Dede Brooks, former president and CEO
Alfred Taubman, former Chairman Deterring Non-members from Entry Both firms held 90% of the market
They absorbed other firms through buying out other firms Rebecca, Rahima, Meghan, Ana, Kristen, Carson, Khyrria, Stella 1990s Sobethy's Christie's Sold for $1.26 million