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Why would an industry that was not colluding yesterday start colluding today? This article distills insights about cartel formation from 41 cases prosecuted by the European Commission between 2001 and 2010. The case studies examine the events occurring prior to the cartels’ set-up. Cartel formation is affected by changes in prices, demand and customer conduct, capacity utilization, increased imports and entry by competitors, as well as events in the legal and regulatory environment of the firms. Yet, none of these factors serves as a good marker of cartel formation when being regarded in isolation. It rather needs to be analyzed how changes in these factors interact and whether they raise the intensity of competition. In this context, factors that are commonly deemed to destabilize cartels, like entry of new competitors or buyer power, are found to actually foster cartel formation.

Aldi, the biggest discounter in Germany, started to systematically extend shopping hours of its stores in 2016. We interpret the decision to extend opening hours of a specific Aldi store as entry into a new market. By using a novel data set containing the opening hours of nearly all German grocery retailers, we find that consumer and firm learning influence that decision. The presence of a nearby Aldi already opened longer increases the probability that a given Aldi extends its opening hours. However, if a nearby competitors store is short opened, the probability that Aldi extends opening hours decreases. 1

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