Incentivizing Private Antitrust Enforcement to Promote Leniency Applications

Sinchit Lai

Journal of Competition Law and Economics, 2021, vol. 17, issue 3, 728-749

Abstract: Both leniency programs and private antitrust enforcement are essential in combating cartels. The literature demonstrates that society benefits from both increased private actions and leniency applications. However, the present view is that private enforcement discourages cartel members from seeking leniency. Proponents of this view blame follow-on civil actions in the wake of successful public antitrust enforcement cases. This concern hinders the development of private antitrust enforcement. Nevertheless, the literature that expresses such a concern fails to consider standalone civil actions’ impact. Building on a game theory model of leniency programs by Professor Joseph E. Harrington, this article reinvestigates the relationship between the two seemingly contradictory procedural devices of leniency programs and private enforcement. Considering a revised leniency game, this article reveals that incentivizing private antitrust enforcement does not necessarily discourage leniency applications. Accordingly, this article proposes ways for legislators to use private enforcement as a tool to promote leniency applications.

Date: 2021
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Journal of Competition Law and Economics is currently edited by Nicholas Economides, Amelia Fletcher, Michal Gal, Damien Geradin, Ioannis Lianos and Tommaso Valletti

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