Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

IEJE Working Paper n°2/2009

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In line with many economists and legal observers, this Norman Neyrinck’s paper argues that a radicalization of the policies fighting cartels is justified, through an increase of the incentives to report and disincentives to collude.

First, harsher administrative sanctions are needed to deter cartel formation, both directly and indirectly as this would reduce many of the adverse effects generated by mild leniency programs. In this context, the Commission has obviously demonstrated a certain degree of commitment, with increasingly high fines being imposed on cartel infringers. Yet, there is still some way to go. In this regard, a close examination of the fines imposed in the car glass cartel – which have had a resounding impact on the antitrust community – reveals that the alleged elevation of the Commission’s fines policy is largely overestimated (they are partly the result of aggravating circumstances for repeated offenses).

Second, leniency schemes would be enhanced through the introduction of additional features such as rewards for firms, bounties for individuals and criminal sanctions. If well coordinated, those mechanisms can lead to a significant increase of leniency applications and, in turn, achieve an optimal degree of compliance with competition law.

Download: Granting Incentives, Deterring Collusion: The Leniency Policy (en)

The author is a LLM student in Liège University (www.ieje.net)

Written by Nicolas Petit

14 April 2009 at 4:42 pm

Posted in Working Papers

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