The Assessment of Agreements for Which Temporary Antitrust Immunity is Sought: Competition Authority's Perspective

Abstract:     
The present study provides an analysis of the conditions that led the Dutch competition authority (the NMa) to decide against a temporary antitrust immunity seeking agreement on antitrust grounds. First, a theoretical Bayesian decision framework, that is similar to that of Cooper et al. (2005), is presented to derive the optimal enforcement rule for agreements for which ex ante antitrust immunity is sought. The NMa’s decisions are then investigated in an econometric background where those final decisions are linked to various industry characteristics, as the NMa took them into consideration when making its final decision. In doing so, a bivariate Probit model with sample selection is estimated to account for the fact that non-application by firms operating in a specific industry for an exemption might result in significant bias. The econometric results suggest it is more likely that concerted practices are seen as anti-competitive in more competitive and less concentrated industries. Finally, the narrative evidence on the legal and institutional background, and the econometric results are interpreted in light of the theoretical Bayesian decision framework.

Number of Pages in PDF File: 37

Keywords: agreements, antitrust immunity, competition law, probit model with sample selection, the Netherlands

working papers series