Optimal Enforcement of Competition Policy: The Commitments Procedure Under Uncertainty

36 Pages Posted: 14 Oct 2014 Last revised: 29 Apr 2015

See all articles by Axel Gautier

Axel Gautier

University of Liege - Research Center on Public and Population Economics; Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE)

Nicolas Petit

University of Liege - School of Law; Hoover Institution; University of South Australia - School of Law

Date Written: April 24, 2015

Abstract

Since the introduction of a formal commitments procedure in EU antitrust policy (Article 9 of Council Regulation 1/2003), the European Commission has extensively settled cases of alleged anticompetitive practices. In this paper, we use a formal model of law enforcement (Bebchuk, 1984; Shavell, 1988) to identify the optimal procedure to resolve cases in a context of uncertainty related to the law (L-uncertainty) and to the facts (F-uncertainty). We show that commitments are suboptimal when there L-uncertainty is important. Furthermore, the generalized use of commitments creates an additional risk of under-enforcement when F-uncertainty is significant.

Keywords: Competition Policy; European Commission; Settlements; Commitments; Law Enforcement.

JEL Classification: K00, K20, K21, K40, K41, K42, L4, L40

Suggested Citation

Gautier, Axel and Petit, Nicolas, Optimal Enforcement of Competition Policy: The Commitments Procedure Under Uncertainty (April 24, 2015). Available at SSRN: https://ssrn.com/abstract=2509729 or http://dx.doi.org/10.2139/ssrn.2509729

Axel Gautier

University of Liege - Research Center on Public and Population Economics ( email )

Boulevard du Rectorat, 7, Batiment 31
Sart-Tilman
B-4000 Liege, 4000
Belgium

Catholic University of Louvain (UCL) - Center for Operations Research and Econometrics (CORE) ( email )

34 Voie du Roman Pays
B-1348 Louvain-la-Neuve, b-1348
Belgium
+32-10-47.43.01 (Fax)

Nicolas Petit (Contact Author)

University of Liege - School of Law ( email )

B-4000 Liege
Belgium

Hoover Institution ( email )

Stanford, CA 94305
United States

University of South Australia - School of Law ( email )

GPO Box 2471
Adelaide SA 5001
Australia

Register to save articles to
your library

Register

Paper statistics

Downloads
317
rank
90,209
Abstract Views
2,034
PlumX Metrics