Is the French Mobile Phone Cartel Really a Cartel?

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Executive Summary

France Telecom (FT), SFR and Bouygues Telecom (BT) have been fined by France's Conseil de la Concurrence (CC) for organizing a mobile phone cartel with stable market shares and for directly exchanging commercial information. While not contesting the legal decision, it is argued here that the economic reasoning is flawed. As the CC made much of the firms' stable market shares, the authors followed this line of reasoning by considering that the market shares are quotas under uniform costs. They then considered that the non-uniform market shares are explained by the costs in Cournot competition which can be deduced from the observed market shares by assuming that the costs are kept the same when switching from Cournot competition to any form of cartel.

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