Leniency Inflation, Cartel Damages and Criminalization

33 Pages Posted: 4 Jun 2018 Last revised: 8 Apr 2022

See all articles by Catarina M. P. Marvão

Catarina M. P. Marvão

Technological University Dublin; Stockholm School of Economics - Stockholm Institute of Transition Economics (SITE)

Giancarlo Spagnolo

Stockholm School of Economics (SITE); Centre for Economic Policy Research (CEPR); University of Rome 'Tor Vergata'; EIEF

Date Written: May 18, 2018

Abstract

We revisit the pros and cons of cartel criminalization with focus on its possible introduction in the EU. We document a recent phenomenon that we name EU ``leniency inflation", whereby leniency has been increasingly awarded to many, and sometimes all members of a cartel. We argue that, coupled with the non-disclosure of leniency statements and the insufficient protection of leniency applicants from damage claims introduced by the 2014 Damages Directive, it may have led to a decrease in cartel convictions. Together with evidence on the current level of fines, this points at the need to introduce criminalization. We then explore data on US criminal enforcement (1990-2015) to highlight potential areas of concern for policymakers, if criminal sanctions will be implemented in the EU. Among other things, we find that individuals in cartels where multiple offending firms are involved, are less likely to obtain a prison sentence.

Keywords: antitrust, cartels, deterrence, leniency, damages

JEL Classification: C72, C73, D43, D81, H11, K14, K20, K21, K42, L13, L44, L51

Suggested Citation

Marvão, Catarina Moura Pinto and Spagnolo, Giancarlo, Leniency Inflation, Cartel Damages and Criminalization (May 18, 2018). Available at SSRN: https://ssrn.com/abstract=3180685 or http://dx.doi.org/10.2139/ssrn.3180685

Catarina Moura Pinto Marvão (Contact Author)

Technological University Dublin ( email )

Dublin
Ireland

Stockholm School of Economics - Stockholm Institute of Transition Economics (SITE) ( email )

P.O. Box 6501
S-113 83 Stockholm, 11383
Sweden

Giancarlo Spagnolo

Stockholm School of Economics (SITE) ( email )

P.O. Box 6501
Stockholm
Sweden

HOME PAGE: http://https://sites.google.com/site/giancarlospagnoloshomepage/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

University of Rome 'Tor Vergata' ( email )

Faculty of Economics - DEI
Via Columbia 2
Rome, RM 00133
Italy

EIEF ( email )

Via Due Macelli, 73
Rome, 00187
Italy

HOME PAGE: http://WWW.EIEF.IT

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