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An Empirical Assessment of the 1996 Leniency Notice


Andreas Stephan


University of East Anglia (UEA) - Centre for Competition Policy

September 2005

CCP Working Paper No. 05-10

Abstract:     
Although the 1996 "Notice on the Non-imposition or Reduction of Fines in Cartel Cases" has been criticised by academics as lacking clarity and certainty, it has been described in European Commission literature as an "indisputable success" and as having played an "instrumental role" in uncovering and punishing secret cartels. This paper makes an empirical assessment of horizontal cartel cases in the EC opened as a result of leniency applications under the 1996 notice. Nearly three quarters of the cartels apparently uncovered by this notice were subject to equivalent prior or simultaneous investigations in the U.S. In addition, most of the cartels that were revealed operated in the Chemical industry were all connected to each other by virtue of the same firms' involvement in more than one cartel, and all failed or ceased to operate before being revealed to the Commission by a cartel member. These two findings would suggest that the 1996 leniency notice was only of limited success in inducing firms to reveal cartels and that most applications for immunity were as a natural consequence of cartels failing and firms looking once more to their own interests rather than those of the cartel. The leniency notice largely succeeded in uncovering failed cartels, not active ones.

Number of Pages in PDF File: 18

Keywords: EU, cartel policy, leniency notice, chemicals industry

JEL Classification: L13, L41, K21, K40

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Date posted: June 28, 2006  

Suggested Citation

Stephan, Andreas, An Empirical Assessment of the 1996 Leniency Notice (September 2005). CCP Working Paper No. 05-10. Available at SSRN: http://ssrn.com/abstract=911592 or http://dx.doi.org/10.2139/ssrn.911592

Contact Information

Andreas Stephan (Contact Author)
University of East Anglia (UEA) - Centre for Competition Policy ( email )
UEA
Norwich, Norfolk NR4 7TJ
United Kingdom
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