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The impact of the 2002 reform of the EU leniency program on cartel outcomes

Author

Listed:
  • Annabelle Jochem
  • Pierpaolo Parrotta

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

  • Giacomo Valletta
Abstract
The objective of this study is to empirically assess whether the 2002 reform of the EU leniency program, which brought the EU leniency policy much closer to the US policy, has increased the European Commission's capability to destabilize cartels while making prosecution more efficient. More specifically, relying on a difference-in-difference approach, we estimate the impact of the 2002 reform on cartel duration, fines before and after applying leniency reductions and duration of investigation. We find that the 2002 reform decreased cartel duration by about 87 percent, but did not significantly affect the other outcome variables. Thus, our findings seem to suggest that the 2002 reform has improved the cartel-destabilizing effect of the EU leniency program, without enhancing however its effectiveness in prosecuting cartels.

Suggested Citation

  • Annabelle Jochem & Pierpaolo Parrotta & Giacomo Valletta, 2020. "The impact of the 2002 reform of the EU leniency program on cartel outcomes," Post-Print hal-03131313, HAL.
    • Handle: RePEc:hal:journl:hal-03131313
    DOI: 10.1016/j.ijindorg.2020.102640
    Note: View the original document on HAL open archive server: https://hal.science/hal-03131313
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    References listed on IDEAS

    as
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    Cited by:

    1. Isogai, Shigeki & Shen, Chaohai, 2023. "Multiproduct firm’s reputation and leniency program in multimarket collusion," Economic Modelling, Elsevier, vol. 125(C).
    2. Peter T. Dijkstra & Jacob Seifert, 2023. "Cartel Leniency and Settlements: A Joint Perspective," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 63(2), pages 239-273, September.
    3. Jeroen Hinloopen & Sander Onderstal & Adriaan Soetevent, 2023. "Corporate Leniency Programs for Antitrust: Past, Present, and Future," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 63(2), pages 111-122, September.

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    More about this item

    Keywords

    Leniency policy; Cartels; Detection; Deterrence; Prosecution;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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