Review of Industrial Organization 18: 23–31, 2001.
© 2001 Kluwer Academic Publishers. Printed in the Netherlands.
Lysine and Price Fixing: How Long? How Severe?
LAWRENCE J. WHITE
Stern School of Business, New York University, 44 West 4th Street, New York, NY 10012-1126,
Abstract. In October 1996 the Archer Daniels Midland Company (ADM) pleaded guilty to criminal
price ﬁxing with respect to sales of lysine and agreed to pay a $70 million ﬁne. Earlier, in August
1996 two Japanese producers and a Korean producer of lysine had agreed to plead guilty to criminal
price ﬁxing charges. And earlier still, in July 1996 ADM and the two Japanese companies settled the
civil suits ﬁled by some harmed buyers by agreeing to pay a sum of $45 million.
It is this last event that serves as the focus for this paper. The adequacy of the settlement amount
was a major area of dispute. Connor (1996, 1997, 1998) has claimed that the trebled damages to
lysine purchasers were an order of magnitude larger. Crucial to Connor’s conclusions are his as-
sumptions as to the time period during which the conspiracy had an effect on prices and the “but for”
price that otherwise would have prevailed in the absence of the conspiracy. This paper will argue that
Connor substantially over-estimated the period of the conspiracy and under-estimated the “but-for”
Key words: Antitrust, price-ﬁxing, treble damages.
Conspiratorial price ﬁxing is a serious federal offense in the U.S. legal system.
It is a felony, with convictions leading to jail terms and ﬁnes for individuals and
ﬁnes for their companies. In addition, price-ﬁxers are subject to federal civil suits
by harmed parties who, if they succeed in demonstrating direct-impact harm from
the price ﬁxing, can require the price-ﬁxers to pay them triple the amount of their
In October 1996 the Archer Daniels Midland Company (ADM) pleaded guilty
to criminal price ﬁxing with respect to sales of lysine and agreed to pay a $70
million ﬁne. Earlier, in August 1996 two Japanese producers and a Korean producer
of lysine had agreed to plead guilty to criminal price ﬁxing charges. And earlier
The author was an expert for Williams & Connolly, which was representing the Archer Daniels
Midland Co. (ADM), and contributed an afﬁdavit (White, 1996) to the July 1996 treble damages
proceeding discussed in the text. An earlier draft of this paper was presented at the Industrial Or-
ganization Society session on “Forensic Economics in Action: The Case of the Lysine Cartel” at the
ASSA meetings, January 5, 1999. The views expressed in this paper are solely those of the author
and do not necessarily represent the views of ADM or Williams & Connolly. Thanks are due to John
Connor and Steven Cuny for helpful comments on an earlier draft.