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Optimal Reduction of Cartel Fines induced by the Settlement Procedure

Panagiotis Fotis () and Markos Tselekounis ()

MPRA Paper from University Library of Munich, Germany

Abstract: EC’s Notice on the conduct of settlement procedures mentions that if the EC decides to reward a firm for settlement in the framework of its Notice, a reduction of 10% on cartel fine will be granted to that firm. In this paper, we compare the cartel profits with the ones derived when the cartel members decide to settle with competition authority so as to find the optimal reduction on cartel fines that fulfills EC’s Notice goal of inducing all cartel firms to participate in the settlement procedure. We find that such reduction is negatively correlated with the likelihood that the cartel would be detected, meaning that a higher probability of cartel detection is required for a lower reduction to be effective.

Keywords: Antitrust policy; Competition policy; Cartel fines; Settlement Procedure (search for similar items in EconPapers)
JEL-codes: K21 L13 L41 (search for similar items in EconPapers)
Date: 2020-03-17
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind, nep-law, nep-mic and nep-reg
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