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Defying Conventional Wisdom: The Case for Private Antitrust Enforcement
TL;DR: In this article, the authors show that private enforcement provides important and beneficial compensation and deterrence, although the level of both is likely suboptimal, and that it is highly unlikely private enforcement produces excessive compensation or deterrence.
Abstract: The conventional wisdom is that private antitrust enforcement lacks any value. Indeed, skepticism of private enforcement has been so great that its critics make contradictory claims. The first major line of criticism is that private enforcement achieves too little — it does not even minimally compensate the actual victims of antitrust violations and does not significantly deter those violations. A second line of criticism contends that private enforcement achieves too much — providing excessive compensation, often to the wrong parties, and producing overdeterrence. This article undertakes the first ever systematic evaluation of these claims. Building upon original empirical work and theoretical inquiry by the authors, and an assessment of the specific factual bases of the criticisms, the article demonstrates that private enforcement provides important and beneficial compensation and deterrence, although the level of both is likely suboptimal. Moreover, the article shows it is highly unlikely that private enforcement produces excessive compensation or deterrence. The article concludes that private enforcement should be strengthened and explores some implications of this conclusion.
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01 Jan 2016
TL;DR: The United States Corporate Leniency Policy Incarnate (CLPLP) was created by the American Chamber of Commerce of Commerce and the United States Chamber of Deputies (CDPP).
Abstract: ................................................................................................................ i THESIS CERTIFICATION ..................................................................................... iii ACKNOWLEDGEMENTS ...................................................................................... iv TABLE OF CONTENTS .......................................................................................... vi LIST OF TABLES ..................................................................................................... x I The ACCC Immunity Policy for Cartel Conduct An Introduction ........ 1 A Summary of Main findings in Relation to Immunity ....................................... 5 1 Threat of Severe Sanctions ........................................................................... 7 2 High Risk of Detection ................................................................................. 7 3 Transparency and Predictability in Enforcement ......................................... 8 B Theoretical Approach and Aims of Thesis ..................................................... 13 C Significance of Research ................................................................................ 14 D Methodology .................................................................................................. 15 E Outline of Chapters ........................................................................................ 19 II The Historical and Theoretical Underpinnings of the Immunity Policy 23 A The Birth of the Immunity Policy .................................................................. 24 1 The United States Corporate Leniency Policy Incarnate ........................... 26 B The Influence of Economics on Cartel Enforcement ..................................... 29 1 The United States Culture of Enforcement ................................................ 33 C A Theoretical Breakdown of the Immunity Policy ........................................ 37 III The Impact of Rationality on Immunity Policy Development ................. 44 A An Exploration of the Development of the Rational Actor Model ................ 45 1 The Economic Approach to Law Competition Law and Economics: An Introduction ........................................................................................................ 48 B The Evolving Concept of Rationality and the Behavioural Law and Economics Approach – A Limited Theoretical Approach to Regulatory Policy and Design ...............................................................................52 1 Behavioural Economics Research – Key Findings .................................... 57 2 Implications Of BE Research Findings ...................................................... 66 3 Criticisms of the Behavioural Economics Approach ................................. 68 C A New Approach to Assessing Cartel Immunity ........................................... 73 vii 1 Threat of Severe Sanctions ......................................................................... 74 2 High Risk of Detection ............................................................................... 74 3 Transparency and Predictability in Enforcement ....................................... 75 4 Transparency .............................................................................................. 79 5 Accountability ............................................................................................ 82 6 Consistency ................................................................................................ 83 7 Proportionality ............................................................................................ 85 IV Research Design ........................................................................................... 91 A The Interviews ................................................................................................ 94 B The Logistics of the Project ........................................................................... 94 1 Recruitment ................................................................................................ 94 2 Sample Selection ........................................................................................ 95 3 Setting ........................................................................................................ 97 4 Outline of the Interview ............................................................................. 97 5 Informed Participants ................................................................................. 98 C Method ..............................................................................101 1 The Process .............................................................................................. 102 V Empirical Insight into the Immunity Policy: Key Findings ................... 109 A Perceptions of & Attitudes Towards the Immunity Policy for Cartel Conduct ..........................................................................................109 1 The Concept of ‘Effectiveness’ ................................................................ 109 2 General Opinions about the Current Operation of the Policy .................. 114 B Eligibility & Cooperation ............................................................................. 125 1 Cartel Recidivism ..................................................................................... 125 2 Ringleader Exclusion ............................................................................... 129 3 Relationship between the ACCC and the CDPP ...................................... 132 4 Revocation of Immunity .......................................................................... 136 C The Tension between Public and Private Enforcement – Confidentiality and Third Parties ..............................................................................138 1 Confidentiality .......................................................................................... 138 2 Restitution to Third Parties ...................................................................... 144 3 Derivative Immunity for Employees ........................................................ 146 D Alternatives to the Immunity Policy ............................................................ 150
27 citations
TL;DR: For nearly two decades, public enforcement through the Indonesian Competition Authority has been the fulcrum of Indonesia's competition law enforcement as discussed by the authors, however, they fail to provide effect and are ineffective.
Abstract: For nearly two decades, public enforcement through the Indonesian Competition Authority has been the fulcrum of Indonesia’s competition law enforcement. However, they fail to provide effect...
7 citations
TL;DR: In this article, the authors examine the new class action procedure for competition cases established by the Consumer Rights Act 2015 and examine whether the legislation and the procedural rules for the Competition Appeal Tribunal address the failures of previous procedures, focusing on three issues in particular i) the treatment of conflicting interests amongst class members ii) the rules on certifying collective proceedings; and iii) rules on funding.
Abstract: This paper examines the new class action procedure for competition cases established by the Consumer Rights Act 2015. It examines whether the legislation and the procedural rules for the Competition Appeal Tribunal address the failures of previous procedures, focusing on three issues in particular i) the treatment of conflicting interests amongst class members ii) the rules on certifying collective proceedings; and iii) rules on funding. It argues that while the Act is a considerable improvement on what preceded it, the safeguards adopted will act as a drag on meritorious and unmeritorious claims alike, and as such there is likely to be continued under-enforcement of competition law.
6 citations
01 Jan 2017
TL;DR: In this paper, the main issues and arguments presented in the general debate on the binding effect of national competition law decisions, and provides a closer look on this topic with regard to specific CEE countries.
Abstract: One of the main objectives of the so-called Damages Directive (2014/104/EU) was to make antitrust enforcement more effective. Although in most EU countries private antitrust enforcement has been possible subject to general rules of civil law; the number of private antitrust litigations has remained relatively low. It is presumed that the complementary roles of public and private enforcement, as well as the synergy between them, will take effect if formal decisions taken during public enforcement will have binding effect with regard to follow-on private litigations. According to the Damages Directive, final national decisions on competition infringements shall have binding effect in follow-on litigations. What is to be understood under ‘binding effect’, and the potential effects thereof, has been subject to a lively debate among academics and practitioners. It has been questioned if decisions of an executive body can bind the judiciary, and if so, to what extent. What is the evidentiary value of a formal decision of a NCA regarding national courts, but also on the court of another Member State. The article deals with the main issues and arguments presented in the general debate on the binding effect of national competition law decisions, and provides a closer look on this topic with regard to specific CEE countries.
5 citations
Cites background from "Defying Conventional Wisdom: The Ca..."
...Other commentators disagreed and appraised the systems as it seems to be the only way to compensate the victims for their losses (Crane, 2010; Davis and Lande, 2013)....
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...Some commentators even stated that private enforcement does more than anti-cartel programmes of governmental agencies (Davis and Lande, 2013)....
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01 Jan 2019
3 citations
References
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TL;DR: In this article, the first 13 cartel decisions of the European Commission under its 2006 revised fining guidelines are analyzed and it is shown that the severity of the cartel fines is more than five times higher than those figured under the previous 1998 Guidelines.
Abstract: This paper analyzes the first 13 cartel decisions of the European Commission under its 2006 revised fining guidelines. I find that the severity of the cartel fines is more than five times higher than those figured under the previous 1998 Guidelines. For the first time in antitrust history, I believe we are observing fines that regularly disgorge the monopoly profits accumulated by cartelists. Indeed, three firms’ fines ranged as high as 500% to 650% of affected sales – possible (but rare) examples of supra-deterrence. Nearly all recent cartel decisions reward one or more participant with full or partial leniency, a much higher share than previously. There is no evidence that leniency discounts have led to larger percentage reductions in cartel-wide fines. Moreover, despite more severe fines, the share of defendants requiring reductions under the Commission’s 10% cap or ability-to-pay considerations has not risen. The frequency and size of recidivism discounts has gone up markedly under the new guidelines. There is ample evidence that the Commission has been inconsistent in applying recidivism penalties in the manner promised it its 2006 Guidelines. In particular, it has been lenient by failing to account for numerous previous violations.
28 citations
01 Jan 2016
TL;DR: The United States Corporate Leniency Policy Incarnate (CLPLP) was created by the American Chamber of Commerce of Commerce and the United States Chamber of Deputies (CDPP).
Abstract: ................................................................................................................ i THESIS CERTIFICATION ..................................................................................... iii ACKNOWLEDGEMENTS ...................................................................................... iv TABLE OF CONTENTS .......................................................................................... vi LIST OF TABLES ..................................................................................................... x I The ACCC Immunity Policy for Cartel Conduct An Introduction ........ 1 A Summary of Main findings in Relation to Immunity ....................................... 5 1 Threat of Severe Sanctions ........................................................................... 7 2 High Risk of Detection ................................................................................. 7 3 Transparency and Predictability in Enforcement ......................................... 8 B Theoretical Approach and Aims of Thesis ..................................................... 13 C Significance of Research ................................................................................ 14 D Methodology .................................................................................................. 15 E Outline of Chapters ........................................................................................ 19 II The Historical and Theoretical Underpinnings of the Immunity Policy 23 A The Birth of the Immunity Policy .................................................................. 24 1 The United States Corporate Leniency Policy Incarnate ........................... 26 B The Influence of Economics on Cartel Enforcement ..................................... 29 1 The United States Culture of Enforcement ................................................ 33 C A Theoretical Breakdown of the Immunity Policy ........................................ 37 III The Impact of Rationality on Immunity Policy Development ................. 44 A An Exploration of the Development of the Rational Actor Model ................ 45 1 The Economic Approach to Law Competition Law and Economics: An Introduction ........................................................................................................ 48 B The Evolving Concept of Rationality and the Behavioural Law and Economics Approach – A Limited Theoretical Approach to Regulatory Policy and Design ...............................................................................52 1 Behavioural Economics Research – Key Findings .................................... 57 2 Implications Of BE Research Findings ...................................................... 66 3 Criticisms of the Behavioural Economics Approach ................................. 68 C A New Approach to Assessing Cartel Immunity ........................................... 73 vii 1 Threat of Severe Sanctions ......................................................................... 74 2 High Risk of Detection ............................................................................... 74 3 Transparency and Predictability in Enforcement ....................................... 75 4 Transparency .............................................................................................. 79 5 Accountability ............................................................................................ 82 6 Consistency ................................................................................................ 83 7 Proportionality ............................................................................................ 85 IV Research Design ........................................................................................... 91 A The Interviews ................................................................................................ 94 B The Logistics of the Project ........................................................................... 94 1 Recruitment ................................................................................................ 94 2 Sample Selection ........................................................................................ 95 3 Setting ........................................................................................................ 97 4 Outline of the Interview ............................................................................. 97 5 Informed Participants ................................................................................. 98 C Method ..............................................................................101 1 The Process .............................................................................................. 102 V Empirical Insight into the Immunity Policy: Key Findings ................... 109 A Perceptions of & Attitudes Towards the Immunity Policy for Cartel Conduct ..........................................................................................109 1 The Concept of ‘Effectiveness’ ................................................................ 109 2 General Opinions about the Current Operation of the Policy .................. 114 B Eligibility & Cooperation ............................................................................. 125 1 Cartel Recidivism ..................................................................................... 125 2 Ringleader Exclusion ............................................................................... 129 3 Relationship between the ACCC and the CDPP ...................................... 132 4 Revocation of Immunity .......................................................................... 136 C The Tension between Public and Private Enforcement – Confidentiality and Third Parties ..............................................................................138 1 Confidentiality .......................................................................................... 138 2 Restitution to Third Parties ...................................................................... 144 3 Derivative Immunity for Employees ........................................................ 146 D Alternatives to the Immunity Policy ............................................................ 150
27 citations
9 citations
01 Jan 2011
9 citations
TL;DR: For nearly two decades, public enforcement through the Indonesian Competition Authority has been the fulcrum of Indonesia's competition law enforcement as discussed by the authors, however, they fail to provide effect and are ineffective.
Abstract: For nearly two decades, public enforcement through the Indonesian Competition Authority has been the fulcrum of Indonesia’s competition law enforcement. However, they fail to provide effect...
7 citations