Time is Money – How Much Money is Time? Interest and Inflation in Competition Law Actions for Damages

60 Pages Posted: 30 Jan 2014

See all articles by Eckart Bueren

Eckart Bueren

Max Planck Institute for Comparative and International Private Law

Kai Hüschelrath

ZEW – Leibniz Centre for European Economic Research

Tobias Veith

ZEW – Leibniz Centre for European Economic Research

Date Written: January 15, 2014

Abstract

Public and private action against cartels is an internationally recognized cornerstone of antitrust enforcement. Effective private enforcement requires that cartel victims can receive (at least) full compensation for the harm suffered. Academics and competition authorities support this goal with guidance for the calculation of cartel damages. However, they usually neglect that the prosecution of competition law infringements can be very time-consuming, so that it often takes several years until cartel victims obtain damages. Interest and inflation are thus two key drivers of adequate compensation. This paper is the first to provide a comparative law and economics perspective on this topic: We investigate how various legal systems treat interest and inflation as part of competition law actions for damages, and, using real-world data from the lysine cartel, simulate the economic differences, which turn out to be substantial. By comparing and evaluating the regulatory techniques, our paper provides important insights for regulators, litigation practitioners and the ongoing reform discussions in the EU and the US. At the same time, our approach is a first step towards a quantitative comparative law and economics analysis of the law on interest in the field of tort law.

Keywords: Antitrust policy, cartels, private enforcement, damages, interest, inflation

JEL Classification: K21, L41, L61

Suggested Citation

Bueren, Eckart and Hüschelrath, Kai and Veith, Tobias, Time is Money – How Much Money is Time? Interest and Inflation in Competition Law Actions for Damages (January 15, 2014). ZEW - Centre for European Economic Research Discussion Paper No. 14-008. Available at SSRN: https://ssrn.com/abstract=2387499 or http://dx.doi.org/10.2139/ssrn.2387499

Eckart Bueren

Max Planck Institute for Comparative and International Private Law ( email )

Mittelweg 187
Hamburg, D-20148
Germany

Kai Hüschelrath (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Tobias Veith

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

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