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Cartel Fine Severity and the European Commission: 2007-2011

John M. Connor

Purdue University; American Antitrust Institute (AAI)

October 24, 2012

European Competition Law Review 34 (2013): 58-77

This article analyzes the first 22 cartel decisions of the European Commission under its 2006 revised fining Guidelines. I find that the severity of the cartel fines relative to affected sales is about double that of the fines decided under the previous 1998 Guidelines. Severity varies only modestly across companies in the same cartel. A large minority of EC fines now disgorge the monopoly profits accumulated by cartelists. Yet, the new fine guidelines are no more severe than contemporaneous U.S. DOJ criminal fines.

Nearly all recent cartel decisions reward one or more participants with full or partial leniency. There is no evidence that leniency discounts have led to larger percentage reductions in cartel-wide fines. Moreover, despite more severe fines, the share of defendants requiring reductions under the Commission’s 10% cap or ability-to-pay considerations has not risen.

Contrary to expectations, the size of the percentage discounts for recidivism has gone down under the new guidelines; moreover, severity during the Almunia Commissionership is much lower than his predecessor’s administration. There is evidence that the Commission has been inconsistent in applying recidivism penalties in the manner promised it its 2006 Guidelines. In particular, it has been overly lenient by failing to account for numerous previous hard-core cartel violations in the EU.

Number of Pages in PDF File: 43

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

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

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Date posted: April 13, 2013  

Suggested Citation

Connor, John M., Cartel Fine Severity and the European Commission: 2007-2011 (October 24, 2012). European Competition Law Review 34 (2013): 58-77. Available at SSRN: https://ssrn.com/abstract=2249010

Contact Information

John M. Connor (Contact Author)
Purdue University ( email )
610 Purdue Mall
West Lafayette, IN 47906
United States
+1 317-733-1938 (Phone)
American Antitrust Institute (AAI)
1730 Rhode Island Avenue, NW
Suite 1100
Washington, DC 20036
United States
202-536-3408 (Phone)
HOME PAGE: http://www.antitrustinstitute.com
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