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Public Communication and Collusion: New Screening Tools for Competition Authorities

Author

Listed:
  • Tomaso Duso
  • Joseph E., Jr. Harrington
  • Carl Kreuzberg
  • Geza Sapi
Abstract
Competition authorities increasingly rely on economic screening tools to identify markets where firms deviate from competitive norms. Traditional screening methods assume that collusion occurs through secret agreements. However, recent research highlights that firms can use public announcements to coordinate decisions, reducing competition while avoiding detection. We propose a novel approach to screening for collusion in public corporate statements. Using natural language processing, we analyze more than 300,000 earnings call transcripts issued worldwide between 2004 and 2022. By identifying expressions commonly associated with collusion, our method provides competition authorities with a tool to detect potentially anticompetitive behavior in public communications. Our approach can extend beyond earnings calls to other sources, such as news articles, trade press, and industry reports. Our method informed the European Commission’s 2024 unannounced inspections in the car tire sector, prompted by concerns over price coordination through public communication.

Suggested Citation

  • Tomaso Duso & Joseph E., Jr. Harrington & Carl Kreuzberg & Geza Sapi, 2025. "Public Communication and Collusion: New Screening Tools for Competition Authorities," CESifo Working Paper Series 12029, CESifo.
    • Handle: RePEc:ces:ceswps:_12029
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    File URL: https://www.ifo.de/DocDL/cesifo1_wp12029.pdf
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    Keywords

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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L64 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Machinery; Business Equipment; Armaments

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