The cement cartel and the overcharge CADE prevented

Abstract

This study estimates the overcharge stemming from cartelization in Brazil’s cement market (1994 – 2007). A Difference-in-Differences model compares cement price paths, drawn from SINAPI-IBGE, to those of comparable construction inputs (lime and steel), using the searches and seizures carried out by CADE in February 2007 as an exogenous shock. The June 2006–August 2007 window captures the cartel’s immediate breakdown, yielding an average overcharge of 2.02%. Applied to participating firms’ sales volumes and updated to current values, this overcharge represents a transfer of roughly R$ 6.94 billion to cartel members. Antitrust intervention, by dismantling the cartel, generated an estimated R$ 11.8 billion in consumer savings between February 2007 and December 2022. The evidence underscores the effectiveness of CADE’s actions and reinforces the need for stringent sanctions to deter anticompetitive practices that impose substantial costs on society.