The Impact of Dawn Raids, Cartel Decisions and Appeals on Stock Prices

Seppe Maes (), Caroline Buts () and Marc Jegers ()
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Seppe Maes: Brussels Centre for Competition Policy of the Vrije Universiteit Brussel
Caroline Buts: Brussels Centre for Competition Policy of the Vrije Universiteit Brussel
Marc Jegers: Brussels Centre for Competition Policy of the Vrije Universiteit Brussel

Journal of Industry, Competition and Trade, 2025, vol. 25, issue 1, No 2, 25 pages

Abstract: Abstract Do antitrust investigations by the European Commission have a significant impact on the market value of affected companies? This paper examines the effects of 700 antitrust observations regarding dawn raids, Commission decisions and appeals to the General Court or the Court of Justice on the stock prices of the companies involved using an event study methodology. A dawn raid creates an abnormal return of − 1.72% and a Commission decision generates a long-lasting drop of 2.23%. An appeal has no effect if litigated in front of the General Court and a short-lived dip of 1.38% in case of a judgment by the Court of Justice. Longer cartel participation leads to a more substantial negative abnormal return. An important observation is that firms that were granted immunity from the fine do not record any notable effects in stock price, despite the relatively low explanatory power of the monetary value of the fine in the overall market capitalisation decline. We suggest that this could be explained by the signalling effect of the fine to the market, in that sense being more important than initially expected.

Keywords: Antitrust; Cartel; Competition policy; Event study (search for similar items in EconPapers)
JEL-codes: G14 K21 L40 L41 L44 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10842-024-00432-7

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