Effective Cartel Enforcement in Europe

Abstract

The European Commission has made transparent in a number of recent publications that undertakings that colluded to fix prices or share markets can expect fines based on affected commerce as well as private antitrust damage claims. Research on discovered cartels characterizes modern international cartels in terms of illegal gains, duration of the infringement and success on appeal. This paper offers a back-of-the-envelope calculation into the net effective (expected) liability of a representative modern international cartel. The exercise reveals that the Commission's recent commitments to punish cartels are likely to remain insufficient to deter collusion, unless European cartel enforcement produces a high (perceived) probability of discovery across the board. This calls for broad, unbiased, random and active cartel detection.

Keywords: cartels, enforcement, Europe, fines, antitrust damages

JEL Classification: K42, L41, D43