I. Introduction 1. Since the turn of the millennium, governments have sharpened regulations regarding corporate misconduct, including bribery, money laundering, and violation of competition law. A common declaration in official references to such regulations is that enforcement must be effective, proportionate, and dissuasive. Although this statement has broad acceptance, it is not clear what it means [1]. With respect to sanctions, for example, it is unclear whether fines should be high enough to deter crime, kept within limits for the sake of protecting competition in markets, or structured to promote certain crime-preventive measures. An expansion in the use of leniency, that is, the practice of offering penalty reductions in return for certain corporate behaviors, such as
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LAW & ECONOMICS: CARTEL - PUBLIC PROCUREMENT - CORRUPTION - COMPENSATION
Deterring corruption and cartels: In search of a coherent approach
This article addresses how the rules intended to protect consumers and taxpayers from economic crime, namely leniency and cartel settlements in competition law, criminal sanctions and debarment of suppliers from participation in public tenders for bribery, work together. While the economic reasoning behind these rules makes sense when considering each one of them in isolation, their impact is weakened when they are opposing each other. Competition authorities are narrowly mandated to control competition, and they do not seek out corruption. For criminal law investigators problems are created if they interfere (because it would undermine the leniency program); conversely, there are problems if they stay away (because that would undermine enforcement of corruption and other economic crimes). We propose to strengthen the regulation of corporate misconduct through better collaboration and integration of the other law enforcement functions and institutions that exist. The first step is to maintain and share a centralized database on firms’ offenses and settlements with antitrust and procurement authorities. The second step is to expand the mandate and competence of competition authorities to search for, and react against, corruption.
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