Bargaining in the Shadow of the European Settlement Procedure for Cartels
27 Pages Posted: 22 Dec 2010 Last revised: 4 Jan 2011
Date Written: December 22, 2010
Abstract
In its recently implemented settlement procedure for cartels, the European Commission pledges not to negotiate the appropriate sanction. The Commission offers a take-it-or-leave-it 10% reduction of the ultimate fine only in exchange for acknowledgment of the facts. Yet there are at least three dimensions open for bargaining in cartel cases. One is the determination of the fine base to which the 10% reduction is applied. A second is the additional percentages of fine reductions that are awarded to subsequent leniency applicants. A third is the phrasing that the Commission uses in its public communications about the case – including the eventually published formal decision. The Commission’s consistent negation of any negotiation space may well be part of its bargaining strategy. The door on fine discount discussions shut, talks are channeled to the other bargaining points, where the Commission has more leeway to find an agreement. By disabling the only hard bargaining point, however, the Commission may unintentionally have put itself in a weak bargaining position. To avoid detrimental effects on the overall deterrence of cartels in Europe, the European Commission should credibly commit itself to being a tough negotiator, if not by enabling individual percentage fine reductions after all, then by embedding a binding and full independent review of all settlement proposals in the procedure.
Keywords: Cartel, Settlement, Fines, Antitrust Damages
JEL Classification: C78, K21, K40, L40
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
When are Excessive Prices Unfair?
By Pinar Akman and Luke Garrod
-
When are Excessive Prices Unfair?
By Pinar Akman and Luke Garrod
-
Abusive Pricing in an IP Licensing Context: An EC Competition Law Analysis
-
Are Excessive Prices Really Self-Correcting?
By Ariel Ezrachi and David Gilo
-
Excessive Pricing, Entry, Assessment, and Investment: Lessons from the Mittal Litigation
By David Gilo and Ariel Ezrachi
-
Excessive Pricing and the Goals of Competition Law - An Enforcement Perspective