Determinants of EC Antitrust Fines for Members of Global Cartels

44 Pages Posted: 7 Mar 2013 Last revised: 9 Mar 2013

See all articles by John M. Connor

John M. Connor

Purdue University; American Antitrust Institute (AAI)

Douglas J. Miller

University of Missouri at Columbia - Department of Economics

Date Written: March 6, 2013


In this paper, we estimate quantitatively the determinants of variation in administrative fines imposed on companies by the European Commission for price-fixing violations. Estimates from our behavioral model provide the first direct test of the predictive power of the optimal deterrence theory of antitrust violations in the EU. In addition, they offer insights into other determinants of the EC’s leniency program for cartels and its effectiveness.

Regressions are fitted to a sample of 204 corporate participants of hard-core global cartels fined between 1990 and early 2010 to explain variation in the absolute Commission fine. Independent variables fall into four groups: the extent of the cartel’s antitrust injuries; factors that affect the probability of detection and conviction by antitrust authorities; the size of non-EC penalties on the cartel; and controls for time, for changes in EC guidelines, for nationality of the defendant, and for industry-specific characteristics. The predictive power of the final model is quite satisfactory. We find that EC corporate cartel fines generally follow the precepts of optimal deterrence theory and the EC’s Fining Guidelines. Fines are directly related to economic injuries from collusion and inversely related to proxies for factors that increase the probability of detection and conviction of clandestine cartels. The elasticity of expected fine with respect to harm is 0.32, hence ex post sub-optimal. Expected fines are directly related to recidivism and increase by roughly 80% under the 2006 revised Guidelines.

However, we also find evidence that the Commission either deviates from optimal deterrence principles or follows practices unmentioned in its Fining Guidelines. Expected fines increase as other penalties (including fines levied by other governments, private fines, and the number of executives charged or sanctioned) increase and are much higher for North American firms.

Keywords: antitrust, European Commission, EU, cartel, collusion, price-fixing, optimal deterrence, penalties, leniency, amnesty

JEL Classification: L41, L44, L65, L11, L13, N60, K21, K14

Suggested Citation

Connor, John M. and Connor, John M. and Miller, Douglas J., Determinants of EC Antitrust Fines for Members of Global Cartels (March 6, 2013). Available at SSRN: or

John M. Connor (Contact Author)

Purdue University ( email )

333 Massachusetts Ave.
UNIT 505
Indianapolis, IN 46204
United States
+1 463-221-1692 (Phone)

American Antitrust Institute (AAI) ( email )

1730 Rhode Island Avenue, NW
Suite 1100
Washington, DC 20036
United States
202-536-3408 (Phone)


Douglas J. Miller

University of Missouri at Columbia - Department of Economics ( email )

118 Professional Building
Columbia, MO 65211
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics