Leniency Theory and Complex Realities

Andreas Stephan and Ali Nikpay
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Andreas Stephan: Centre for Competition Policy and School of Law, University of East Anglia
Ali Nikpay: Partner, Global Antitrust and Competition, Gibson, Dunn and Crutcher

No 2014-08, Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK.

Abstract: This paper seeks to assess the robustness of the assumptions made by much of the theoretical literature on leniency programs, giving a glimpse of the uncertainties and complexities that apply in practice. First, sanctions are hard to estimate and the decision to form a cartel is not generally made by the firm as a rational monolith. Second, empirical evidence from the EU suggests an over-reliance on leniency, with only a weak threat of detection through investigations alone. Most leniency reporting may be occurring where a cartel has already ceased to operate or is very likely to be caught. Finally, the decision to come forward is not one that is taken lightly by the firm; it is fraught with uncertainties and dangers, including the challenges of ensuring cooperation from employees. The paper concludes with three recommendations for the strengthening of leniency policies.

Keywords: Leniency; Cartels; Deterrence; Competition Law; Compliance; Corporate Governance (search for similar items in EconPapers)
Date: 2014-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:uea:ueaccp:2014_08

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