Unilateral Practices, Antitrust Enforcement and Commitments

Michele Polo and Patrick Rey

No 17140, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper analyses the impact of commitments on antitrust enforcement. These tools, introduced in Europe by the Modernization reform of 2003, are now used intensively by the European Commission and by National Competition Agencies. We consider a setting where a firm can adopt a practice that is either pro- or anti-competitive; the firm knows the nature of the practice whereas the enforcer has only prior beliefs about it. If the firm adopts the practice, the enforcer then decides whether to open a case. When commitments are available, the firm can offer a commitment whenever a case is opened; the enforcer then decides whether to accept it or run a costly investigation that may or may not bring supporting evidence. We show that introducing commitments weakens enforcement when the practice is likely to be anti-competitive. The impact of commitments is however more nuanced when the practice is less likely to be anti-competitive.

Keywords: Antitrust enforcement; Commitment; Remedies; Deterrence (search for similar items in EconPapers)
JEL-codes: K21 K42 L40 (search for similar items in EconPapers)
Date: 2022-03
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Working Paper: Unilateral Practices, Antitrust Enforcement and Commitments (2024)
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