Miriam C. Buiten, Peter van Wijck and Jan Kees Winters ‘Does the European Damages Directive Make Consumers Better Off’ (2018) Journal of Competition Law & Economics, 14(1) 91

The paper seeks to uncover what are the implications of private enforcement for deterrence, leniency, and consumer welfare. To address this question, the authors develop a dynamic model that considers two opposing effects on deterrence that arise from allowing partial compensation of victims. First, competition damages may reduce incentives to apply for leniency. Second, liability for damages may lead firms to refrain from engaging in a cartel in the first place by increasing potential participation costs. The authors find that these effects act in opposite directions, so there is a balance to be struck between promoting compensation and leniency applications. The paper is organized as follows. Section II discusses the legal position of competition victims under the EU Damages Directive, and remaining obstacles to obtaining compensation. The Directive aims to remove the main obstacles that victims of competition law infringements face when trying to obtain compensation for their loss. The Directive specifies that “any natural or legal person who has…

Murillo Campello (Cornell), Daniel Ferrés  (Montevideo) and Gaizka Ormazabal  (IESE)  ‘Whistle-Blowers on the Board? The Role of Independent Directors in Cartel Prosecutions’ (2017) The Journal of Law and Economics 60(20 241

The goal of this paper – which can be found here – is to examine ‘whether market-based penalties for nonexecutive officials [more specifically, independent board members] in firms involved in price-fixing are significant in shaping their behaviours.’ The reason to focus on independent board members is that they ‘are highly sensitive to market sanctions (for example, in the form of reputational losses). Importantly, directors have powers not only to order internal investigations but also to require officers and employees to cooperate with prosecutors. In some cases, boards also establish special committees and appoint outside counsel to consider applications for leniency. As a result, they constitute a set of corporate insiders whom antitrust policies can exploit in designing prosecution policies.’ The paper is structured as follows: Second 2 begins by providing an overview of US and EU regimes for cartel prosecution and leniency. It also describes the role of corporate boards in cartel investigations. In the US: ‘Once the corporation learns…

Giancarlo Spagnolo and Catarina Marvão ‘Cartels and Leniency: Taking stock of what we learnt’

This paper, available at https://ideas.repec.org/p/hhs/hasite/0039.html, reviews the literature on the incentives of leniency applicants.  It is a really useful piece for anyone doing leniency work, and extremely thorough. It is not possible to  provide a summary of the paper: it reviews too many papers and possible scenarios (the first section looks at economic models, the second at empirical evidence). If there is a basic argument underpinning all of this, it seems to be that incentives to increase cartel enforcement results may not be well-aligned with maximising welfare /  may lead to excessively generous leniency conditions; and that leniency reduces collusion but that the EU is too nice to cartelists and extends leniency to far too many companies.

Wouter Wils ‘The Use of Leniency in EU Cartel Enforcement: An Assessment After Twenty Years’

This paper by Wouter Wils – available at https://www.concurrences.com/en/review/numeros/no-1-2017/articles/the-use-of-leniency-in-eu-cartel-enforcement-an-assessment-after-twenty-years – describes  20 years of leniency in Europe. In addition to some interesting statistics, it contains an overview of arguments for and against the use of leniency. It is useful for anyone doing bid-rigging / promoting the virtues of competition, but putting at risk the job of thousands of trainee lawyers who will no longer have a job searching for examples of the practical application of  leniency by the European Commission.