What is "decartelization"

Decartelization is the transition of a national economy from monopoly control by groups of large businesses, known as cartels, to a free market economy. This change rarely arises naturally, and is generally the result of regulation by a governing body with monopoly of power to decide what structures it likes.

A modern example of decartelization is the economic restructuring of Germany after the fall of the Third Reich in 1945.

To truly understand the term “decartelization” requires familiarity with the term “cartel”. A cartel is a formal (explicit) agreement among firms. Cartels usually occur in an oligopolistic industry ( oligopoly), where there are a small number of sellers and usually involve homogeneous products ( Homogeneity and heterogeneity). Cartel members may agree on such matters as price fixing, total industry output, market shares, allocation of customers, allocation of territories, bid rigging, establishment of common sales agencies ( sales agents), and the division of property or profits or combination of these. The aim of such collusion is to increase individual member's profits by reducing competition. Competition laws forbid cartels. Identifying and breaking up cartels is an important part of the competition policy in most countries, although proving the existence of a cartel is rarely easy, as firms are usually not so careless as to put agreements to collude on paper.