Abstract

http://ssrn.com/abstract=2095248
 
 

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Violations of Antitrust Provisions: The Optimal Level of Fines for Achieving Deterrence


Alberto Heimler


Government of the Italian Republic (Italy) - National School of Administration

Kirtikumar Mehta


University of Fribourg

2012

World Competition: Law and Economics Review, Vol. 35, No. 1, 2012

Abstract:     
While the general principle that fines for antitrust violations be set at deterrent levels is well established in prevailing Guidelines on Fines, how these principles are to be interpreted in specific cases is not even considered, or at most only non-operational indications are provided. This article attempts to fill this gap by elaborating some guidance on how deterrence could be achieved for specific categories of violations, by taking into account very simple parameters of demand and supply responses to price signals. In the first place, we argue that a measure of ‘ex ante’ extra profits provides the conceptually correct starting point and we suggest how this may be calculated. Second, general principles of determination of fines can and should be applied in distinct ways to cartel and to abuse of dominance violations, taking into account the different probability of detecting these violations. Furthermore, the determination of the deterrent level of fines would benefit both enforcement and compliance if appropriate account is taken of the interplay between fines, leniency, and private litigation. A simulation approach is developed in the article to provide competition authorities with ranges of percentages of fines that may become useful in practical applications.

Number of Pages in PDF File: 17

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Date posted: June 30, 2012  

Suggested Citation

Heimler, Alberto and Mehta, Kirtikumar, Violations of Antitrust Provisions: The Optimal Level of Fines for Achieving Deterrence (2012). World Competition: Law and Economics Review, Vol. 35, No. 1, 2012. Available at SSRN: http://ssrn.com/abstract=2095248

Contact Information

Alberto Heimler (Contact Author)
Government of the Italian Republic (Italy) - National School of Administration ( email )
Via dei Robilant
11 - 00135 Rome
Italy
+3906 33565348 (Phone)
Kirti Mehta
University of Fribourg ( email )
Avenue de l'Europe 20
CH-1700 Fribourg
Switzerland
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