The Role of Economics in Cartel Detection in Europe

Abstract

In the wake of the successful implementation of leniency programs in and across the EU other instruments of cartel detection have become less prominent. In the period from 2002 to the end of 2005, the Commission adopted 30 statements of objections, a necessary procedural step before taking a decision in cartel cases, roughly 213 of which were based on leniency applications. While accepting the contribution of leniency in pursuing the overarching objective of antitrust policy in the context of cartels - deterrence and desistance of collusive agreements - the following article argues in favour of a more balanced tool set for cartel detection including economic methods.

The paper is structured in the following way. Section 2 provides an introduction to the nature of collusion and the role of economics. Section 3 discusses the legal basis and the enforcement instruments available to the Commission for Fighting Cartels. Section 4 discusses the interdependency and the individual advantages of leniency and ex officio cartel detection. Section 5 puts forward the main challenges any economic methodology to trigger ex officio inspections has to deal with. Section 6 discusses the two main methods for cartel detection - top down and bottom up approaches. Section 7 concludes.