Rebating Antitrust Fines to Encourage Private Damages Actions

14 Pages Posted: 25 Feb 2020

See all articles by Winand Emons

Winand Emons

University of Bern - Department of Economics; Centre for Economic Policy Research (CEPR)

Severin Lehnhard

University of Bern

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Date Written: January 29, 2020

Abstract

To encourage private actions for damages in antitrust cases some jurisdictions subtract a fraction of the redress from the fine. We analyze the effectiveness of this policy. Such a rebate does not encourage settlement negotiations that would otherwise not occur. If, however, the parties settle without the rebate, the introduction of the reduction increases the settlement amount, yet at the price of reduced deterrence for those wrongdoers who are actually fined. Under a leniency program the rebate has no effect on the leniency applicant: she doesn't pay a fine that can be reduced. The overall effect of a fine reduction on deterrence is, therefore, negative.

Keywords: antitrust, damages, deterrence, leniency

JEL Classification: D43, K21, K42, L40

Suggested Citation

Emons, Winand and Lehnhard, Severin, Rebating Antitrust Fines to Encourage Private Damages Actions (January 29, 2020). Available at SSRN: https://ssrn.com/abstract=3527422 or http://dx.doi.org/10.2139/ssrn.3527422

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Centre for Economic Policy Research (CEPR)

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Severin Lehnhard

University of Bern ( email )

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Bern, BERN 3001
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