Leniency programs (or policies) reduce sanctions against cartel members that self-report to the Antitrust Authority We focus on their ability to directly deter cartels and analogous criminal organizations by undermining internal trust, increasing individual incentives to 'cheat' on partners Optimally designed 'courageous' leniency programs reward the first party that reports sufficient information with the fines paid by all other parties, and with finitely high fines achieve the first best 'Moderate' leniency programs that only reduce or cancel sanctions, as implemented in reality, may also destabilize and deter cartels by (a) protecting agents that defect (and report) from fines; (b) protecting them from other agents' punishment; and (c) increasing the riskiness of taking part to a cartel

Divide et Impera: Optimal Leniency Programs

The article presents a unique regression analysis of social-science estimates of the size of cartel overcharges. More than 800 overcharge rates were collected from a variety of published sources that have appeared in the literature during the last 125 years. A meta-analysis of overcharges from 395 cartel episodes finds that duration, legal environment, and organizational characteristics of cartels explain the variation on overcharge rates to a greater extent than the type of publication or the method of overcharge analysis. In particular, overcharges are significantly higher for durable international cartels and are declining as antitrust enforcement regimes have stiffened. Historical case studies and government reports calculate lower overcharges, whereas antitrust authorities arrive at relatively high rates.

Cartel Overcharges: Survey and Meta-Analysis

This paper aims to assess the influence that economic analysis has had on competition policy in the European Union over the last twenty years. Economists are increasingly used in antitrust cases; the annual turnover of the main economic consultancy firms has increased by a factor of 20 since the early 1990s and currently exceeds £20 million. This is about 15% of the aggregate fees earned on antitrust cases, a proportion close to that in the US. The economic resources mobilized by the EU Commission are, however, an order of magnitude smaller and this imbalance is a source of concern. The legal framework and the case decisions have also been influenced by economic analysis in important ways. For instance, the analysis of agreements between firms has increasingly focused on effects; the analysis of the factors that determine effective competition has become more sophisticated; the concept of collective dominance has been progressively developed in terms of the theory of collusion in repeated interactions, and quantitative methods have become more important. However, enforcement has sometimes appealed to economic reasoning in flawed or speculative ways; the paper discusses procedural reasons why this may have occurred. This paper assesses the system of evidence gathering implemented by the Commission in the light of the law and economics literature. It is concluded that while the reforms recently implemented by the Commission do address the main weaknesses of this system, they may still not allow for the most effective development of economic theory and evidence in actual cases.

— Damien J. Neven

/pdf/competition-economics-and-antitrust-in-europe-4tt4wvtx90.pdf

Competition economics and antitrust in Europe

Leniency programs contribute to destabilizing collusion but can also be abused and generate perverse effects. This paper develops a simple model capturing this trade-off, which we use to relate the optimal leniency policy (the carrot) to the effectiveness of investigations (the stick). We show that it is always desirable to offer some leniency before an investigation is launched; it is also optimal to offer some leniency once an investigation is underway when investigations are unlikely to succeed in uncovering cartels, absent self-reporting. Our analysis also confirms the usefulness of restricting leniency to the first informant only; in contrast, it does not support prohibiting leniency for repeat offenders.

/pdf/on-the-design-of-leniency-programs-51jpdh9l6h.pdf

On the Design of Leniency Programs

https://govinfo.library.unt.edu/amc/public_studies_fr28902/remedies_pdf/Connor050615.pdf

Cartel overcharges: survey and meta-analysis

This first roundtable of the “New frontiers of Antitrust” conference, Paris, 15 June 2015, was dedicated to the commitment decisions as « tool of choice or poison » for antitrust enforcement. After…

Commitment decisions: Tool of choice or poison for antitrust enforcement? (New Frontiers of Antitrust, 15 June 2015, Paris)

Procedural Rights and Obligations of Third Parties in Antitrust Investigations and Proceedings by the European Commission

Should the EU Competition Damages Directive Be Revised to Grant Companies that Have Received Immunity from Fines under the Competition Authorities’ Leniency Programmes also Immunity from Damages?

This Article provides a systematic overview of the procedural rights and obligations of third parties in investigations and proceedings conducted by the European Commission for the enforcement of Articles 101 and 102 TFEU. Third parties are all natural or legal persons, undertakings and associations of undertakings other than those under investigation. This article examines the possibilities for third parties to inform the European Commission about a suspected infringement and to trigger an investigation by the European Commission; the obligations and rights of third parties when responding to requests for information sent to them by the European Commission, when participating in interviews, and when submitting to inspections conducted by the European Commission; the possibilities for third parties to obtain information about pending proceedings and to express their views in them; the rules on the use of languages; and the protection of business secrets and other confidential information, and the restrictions on the use of information obtained by third parties through their participation in the European Commission’s proceedings.
Procedural rights and obligations, Third parties, Antitrust proceedings and investigations, European Commission, Enforcement of Articles 101 and 102 TFEU, Informants, Requests for information, Inspections, Use of languages, Protection of confidential information

Wouter P. J. Wils

Papers

Commitment decisions: Tool of choice or poison for antitrust enforcement? (New Frontiers of Antitrust, 15 June 2015, Paris)

Procedural Rights and Obligations of Third Parties in Antitrust Investigations and Proceedings by the European Commission

Should the EU Competition Damages Directive Be Revised to Grant Companies that Have Received Immunity from Fines under the Competition Authorities’ Leniency Programmes also Immunity from Damages?

Procedural Rights and Obligations of Third Parties in Antitrust Investigations and Proceedings by the European Commission