Technological advancements and digitalisation have a dual impact on cartels: they facilitate both the formation and the detection of cartel activities. On one hand, technology has made it easier for firms to communicate and coordinate their actions, potentially leading to more sophisticated and concealed forms of collusion. Digital platforms can enable real-time monitoring of market conditions and rapid adjustments to cartel agreements. On the other hand, these same technological advancements provide regulators with more powerful tools for detection and analysis. Sophisticated algorithms and data analytics can help identify patterns of collusion that would be difficult to detect manually. The increased digital footprint left by electronic communications also provides a trail that regulatory authorities can follow. As a result, while technology might aid in the formation of cartels, it also enhances the capabilities of regulatory bodies to uncover and dismantle them.

Cartels are inherently unstable and often short-lived due to several intrinsic and extrinsic factors. Internally, the individual interests of member firms can conflict with the collective interests of the cartel. Each firm has an incentive to cheat by secretly undercutting the cartel price or exceeding the agreed-upon production quotas to gain a larger market share. This temptation is particularly strong when there's a potential for significant short-term gains. Externally, changes in market conditions such as shifts in demand or supply can disrupt the delicate balance on which the cartel operates. Additionally, the constant threat of legal action and regulatory intervention in many jurisdictions creates a precarious environment for cartels. The combination of these factors makes maintaining a cartel agreement challenging, leading to their eventual breakdown.

International cooperation is crucial in combating global cartels, which operate across national borders and hence require a coordinated response from multiple countries. Such cooperation can take various forms, including sharing information and intelligence about suspected cartel activities, harmonising legal and regulatory frameworks to close loopholes exploited by cartels, and conducting joint investigations and enforcement actions. By collaborating, countries can pool resources and expertise, making it more difficult for cartels to evade detection by operating in jurisdictions with weaker antitrust enforcement. International cooperation also sends a strong signal to firms that cartel behaviour will not be tolerated anywhere, thereby increasing the deterrent effect. Key international organisations, such as the OECD and the International Competition Network, play a significant role in facilitating this cooperation and providing a platform for dialogue and best practice sharing among member countries.

While cartels are generally viewed negatively due to their anti-competitive nature, there are arguments suggesting they can have certain positive effects under specific circumstances. For instance, in industries with high fixed costs and significant risks, such as the pharmaceutical or aerospace industry, cartels can stabilise markets, allowing firms to survive in a highly competitive environment. This stability can, in theory, ensure continuous production and potentially prevent market failures. In some cases, cartels have been argued to facilitate the rationalisation of production and distribution, reducing wasteful competition. However, these potential benefits are often overshadowed by the negative impacts, such as reduced competition, higher prices for consumers, and stifled innovation. It's also important to note that these positive aspects do not justify the formation of cartels, as they still contravene free-market principles and can lead to long-term economic inefficiencies.

Cartels typically have a negative impact on innovation within their respective industries. When firms form a cartel, they often focus on maintaining the status quo to maximise joint profits, which significantly reduces the incentive to innovate. In a competitive market, firms are driven to innovate to gain an edge over their competitors, either by reducing costs, improving product quality, or introducing new products. However, in a cartelised market, since the firms have an agreed-upon strategy for price and output, the urgency to innovate diminishes. This lack of competition leads to a slower rate of technological advancement and can result in stagnation within the industry. Over time, this can harm the global competitiveness of the firms and the industry as a whole. Furthermore, consumers face the double disadvantage of higher prices and a lack of innovative products or services, leading to decreased consumer welfare.