Antitrust Sanctions

Competition Policy International, Vol. 6, No. 2, pp. 3-39, Autumn 2010

George Mason Law & Economics Research Paper No. 10-60

39 Pages Posted: 8 Nov 2010 Last revised: 19 Nov 2010

Douglas H. Ginsburg

U.S. Court of Appeals for the District of Columbia Circuit; George Mason University - Antonin Scalia Law School, Faculty

Joshua D. Wright

George Mason University - Antonin Scalia Law School, Faculty

Date Written: November 8, 2010

Abstract

In this article, we first discuss traditional deterrence theory as applied to optimal criminal antitrust penalties. Then we evaluate both the U.S. and EU experience with ever-increasing corporate fines and the available empirical evidence on the deterrent value of cartel sanctions. In the next part we turn to our claim that the conventional wisdom of ever-increasing corporate fines to solve the problem of under-deterrence is misguided. The determination of the optimal sanction for price-fixing should be guided by two principles: (1) the total sanction must be great enough, but no greater than necessary, to take the profit out of price-fixing; and (2) the individuals responsible for the price-fixing should be given a sufficient disincentive to discourage them from engaging in the activity. We propose altering the distribution of criminal sanctions for corporations and the individuals who fix prices on their behalf, and introducing sanctions for negligent officers and directors consistent with our two fundamental principles. Finally, we discuss the experience with debarment as a sanction in other contexts, and how it might operate in the context of U.S. antitrust enforcement.

Keywords: accountability, Asia, Australia, bid-rigging, commission, compliance, European Union, horizontal price-fixing, incentive, inefficient, Latin America, leniency policies, market, non-collusive vertical restraints, recidivism, South Africa, Sweden, U.K. Office of Fair Trading, white collar crime

JEL Classification: K21, K23, K42, L40, L51

Suggested Citation

Ginsburg, Douglas H. and Wright, Joshua D., Antitrust Sanctions (November 8, 2010). Competition Policy International, Vol. 6, No. 2, pp. 3-39, Autumn 2010; George Mason Law & Economics Research Paper No. 10-60. Available at SSRN: https://ssrn.com/abstract=1705701

Douglas H. Ginsburg

U.S. Court of Appeals for the District of Columbia Circuit ( email )

333 Constitution Ave NW
Room 5523
Washington, DC 20001
United States

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

Joshua D. Wright (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States

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