DP10682 Leniency and Damages
|Author(s):||Paolo Buccirossi, Catarina Marvão, Giancarlo Spagnolo|
|Publication Date:||June 2015|
|Keyword(s):||cartels, competition policy, Leniency Program, private and public enforcement|
|JEL(s):||C72, C73, D43, D81, H11, K21, K42, L13, L44, L51|
|Programme Areas:||Industrial Organization|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=10682|
Damage actions may reduce the attractiveness of leniency programs for cartel participants if their cooperation with the competition authority increases the chance that the cartel?s victims will bring a successful suit. A long legal debate culminated in an EU directive, adopted in November 2014, which seeks a balance between public and private enforcement. It protects the effectiveness of a leniency program by preventing the use of leniency statements in subsequent actions for damages. Our analysis shows such compromise is not required: limiting the cartel victims? ability to recover their loss is not necessary to preserve the effectiveness of a leniency program and may be counterproductive. We show that damage actions will actually improve its effectiveness, through a legal regime in which the civil liability of the immunity recipient is minimized and full access to all evidence collected by the competition authority, is granted to claimants, like in the US.