Separation of Powers: The Case of Antitrust

25 Pages Posted: 19 Jan 2012

See all articles by Bernhard Ganglmair

Bernhard Ganglmair

ZEW – Leibniz Centre for European Economic Research - Junior Research Group Competition and Innovation; Mannheim Centre for Competition and Innovation (MaCCI); University of Mannheim - Department of Economics

Andrea Günster

ZHAW School of Management and Law; Maastricht University - Department of Organization & Strategy

Date Written: May 15, 2011

Abstract

We present a simple game-theoretic model that captures the differences in antitrust enforcement in the U.S. and Europe. The European system is characterized by a combination of investigation, prosecution and adjudication within the European Commission as antitrust authority. This has raised concerns about the impartiality of the system. We provide conditions under which the two systems differ and the European Commission is more likely to issue antitrust infringement decisions than the Department of Justice or the Federal Trade Commission are to bring a case to trial. Assuming otherwise identical systems (with respect to fines and cost allocation), we show that for strictly positive litigation costs the lack of separation of power (rather than an a priori prosecutorial bias) increases the likelihood of a rm in Europe being convicted of an antitrust violation.

Keywords: antitrust, competition policy, Federal Trade Commission, Department of Justice, European Commission, separation of powers

JEL Classification: D02, L40, K21, K40

Suggested Citation

Ganglmair, Bernhard and Günster, Andrea, Separation of Powers: The Case of Antitrust (May 15, 2011). Available at SSRN: https://ssrn.com/abstract=1987741 or http://dx.doi.org/10.2139/ssrn.1987741

Bernhard Ganglmair (Contact Author)

ZEW – Leibniz Centre for European Economic Research - Junior Research Group Competition and Innovation ( email )

L7,1
Mannheim, 68161
Germany

Mannheim Centre for Competition and Innovation (MaCCI) ( email )

L 7, 1
Mannheim, 68131
Germany

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany

Andrea Günster

ZHAW School of Management and Law ( email )

St.-Georgen-Platz 2
Winterthur, 8401
Switzerland
+41589347946 (Phone)

HOME PAGE: http://https://www.zhaw.ch/en/about-us/person/gues/

Maastricht University - Department of Organization & Strategy ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

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