Why Antitrust Damage Levels Should Be Raised
17 Pages Posted: 10 Apr 2008 Last revised: 17 Nov 2008
Abstract
The conventional wisdom is that current antitrust damage levels are too high, lead to overdeterrence, and should be cut back. Although most agree that threefold damages are fine for cartels, the combination of treble damages to direct purchasers and another treble damages to indirect purchasers typically is denounced as duplicative, a mess, or the equivalent of the use of cluster bombs on defendants.
This article, however, demonstrates the opposite. It shows that, if the current antitrust damage levels are examined carefully, they are the equivalent of approximately single damages, not treble damages. Moreover, defendants' theoretical nightmare scenarios of sixfold damages have never occurred in the real world. Yet, antitrust damages should be significantly higher than single damages to deter antitrust violations optimally. For these reasons, antitrust damage levels should be raised significantly. Prejudgment interest would be a good way to do this.
Keywords: antitrust, damages, deterrence, compensation, treble damages, private enforcement, antitrust damages
JEL Classification: K21, L40
Suggested Citation: Suggested Citation