Slow down investigations to self-report

Emilie Dargaud () and Armel Jacques ()
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Emilie Dargaud: GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - EM - EMLyon Business School - CNRS - Centre National de la Recherche Scientifique
Armel Jacques: CEMOI - Centre d'Économie et de Management de l'Océan Indien - UR - Université de La Réunion

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Abstract: The introduction of a leniency program may encourage multi-product firms involved in price cartels on several markets to adopt a decentralized organization. This slows down antitrust investigations. The discovery of another cartel in the course of an investigation into a first cartel is thus postponed. This delay gives firms more time to apply for leniency for other cartels not yet discovered. A decentralized organization thus enables a greater reduction in fines to be obtained when firms wish to benefit from the leniency program. It does, however, have the disadvantage of introducing intra-firm competition and reducing collusion prices. A leniency program can therefore have a marginal deterrent effect by modifying firms' internal organization, thereby reducing collusion prices. A larger fine reduction can reinforce this marginal deterrent effect. However, it can also produce an anti-competitive effect by enabling the formation of new cartels.

Keywords: Collusion antitrust policy leniency programs multimarket contact organizational form JEL codes: K42 L22 L41 Collusion antitrust policy leniency programs multimarket contact organizational form. JEL: K42 L22 L41; Collusion; antitrust policy; leniency programs; multimarket contact; organizational form JEL codes: K42; L22; L41 Collusion; organizational form. JEL: K42; L41 (search for similar items in EconPapers)
Date: 2024-11-21
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