EU Cartel Law and Economics, Cédric ARGENTON, Damien GERADIN and Andreas STEPHAN

Cedric Argenton, Damien Geradin, and Andreas Stephan

This section selects books on themes related to competition laws and economics. This compilation does not attempt to be exhaustive but rather a survey of themes important in the area. The survey usually covers publication over the last three months after publication of the latest issue of Concurrences. Publishers, authors and editors are welcome to send books to catherine.prieto@univ-paris1.fr for review in this section.

In the present book, Cédric Argenton, Damien Geradin and Andreas Stephan are conducting an extensive study on EU cartel law and economics, with a focus on horizontal “hardcore” cartelization. They are seeking to examine the impact of economics on the main aspects of EU cartel law enforcement and the interaction between them, in order to assess to what extent the law needs to be more consistent with economic theory and analysis.

The book is comprised of seven chapters, including the introduction (chapter 1) and the conclusion (chapter 7). Chapter 2 deals with why and how competitors cartelize based on economic theories. Chapters 3 to 5 analyze in depth the aspects of public enforcement of cartels, while chapter 6 deals with private enforcement.

Chapter 2 discusses the economic theories pertaining to cartel enforcement, to be used as the general premise for the analysis conducted in the following chapters. It identifies the different economic motives of the competitors to cartelize for each type of collusion and for each set of economic conditions. It also explores the different social costs of cartels, specifically their impact on efficiency and social welfare. In addition, the chapter demonstrates how cartels work, by discussing the modalities and the necessary prerequisites for setting a cartel and the mechanisms and challenges for operating and stabilizing it, including the use of new technologies such as algorithms.

Chapter 3 conducts an in-depth analysis of the substantive and procedural rules of cartel enforcement. First, it discusses all the facets of Article 101 TFEU in light of the decisional practice of the European Commission and the EU court precedents, in order to analyze to what extent these provisions have successfully aligned with the economic analysis on cartelization. Secondly, for the purpose of understanding why combining economic theory and law in some aspects of cartel enforcement can be problematic, the chapter explains the institutional and procedural rules of cartel enforcement, including the interaction between the European Commission and the national competition authorities and the national courts.

Chapter 4 explores cartel detection, which can be truly considered as one of the most challenging aspects of cartel law enforcement. The chapter analyzes the different methods for detecting cartels, which consist in market monitoring and screening, inspections and leniency. For market monitoring, it explores all the possible tools, with an emphasis on the proactive screening methods and economic tests, and their limitations. For both inspections and leniency, it explains in detail the applicable EU substantive and procedural rules, including the interaction and cooperation between the European Commission and national authorities. Regarding leniency specifically, the chapter conducts an analysis, based on economic theories, of all the strengths and the weaknesses of EU leniency rules, in order to put forward recommendations for reform. These recommendations consist mainly in: opting for a one-stop-shop model in the EU to ensure legal certainty for leniency applicants; limiting discounts to increase deterrence; and adopting a more comprehensive policy for whistleblowers to strengthen detection.

Chapter 5 explores all the procedural phases once the cartel is detected by the EU Commission, starting with the investigation, until the decision-making and the appeals. The most important aspects that this chapter is examining are cartel settlement procedures and sanctions. For the settlement, the main question that the chapter is exploring is to what extent the settlement mechanism can be appropriate and relevant for an effective cartel enforcement. In addition, the chapter puts forward a number of recommendations to improve the EU settlement procedure, which mainly aim at encouraging cartel members to settle by making it more attractive and by giving them more certainty. As for the sanctions, the chapter analyzes, evidently, how to determine the optimal corporate fines for cartels and what types of other sanctions the EU law can adopt in order to increase deterrence and ensure a more effective cartel enforcement.

Finally, chapter 6 discusses private enforcement and specifically civil damages. It discusses first the state of private enforcement before the EU Damages Directive at the national levels and for each of the EU Members States, then it explores the EU Damages Directive, and then finally it gives an explanation on damage calculation modalities, including the issue arising from the pass-on defense. In particular, the chapter is calling for a more robust and effective private enforcement in the EU, especially by pointing out the absence still of a class action system in the directive. More importantly, it explains plainly the damage calculation and the relevant and possible difficulties that judges may face in computation due to its complexity, and what the proposals to alleviate these issues are.

The present book is indeed the first comprehensive study that has been conducted on EU cartel law and economics. It can serve as guidance for scholars, practitioners and competition authorities from both economic and legal backgrounds. The authors succeeded at exploring all the economic and legal aspects of cartel enforcement while emphasizing in their analysis on the main and the most important issues that truly needed reform. Most importantly, they confirmed the fact that economic theory is crucial for the design and enforcement of an effective competition law, including cartel enforcement, which was demonstrated notably by the recommendations and proposals that they have put forward.

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Fatma El-Zahraa Adel, EU Cartel Law and Economics, Cédric ARGENTON, Damien GERADIN and Andreas STEPHAN, May 2021, Concurrences N° 2-2021, Art. N° 100235, pp. 263-264

Publisher Oxford University Press

Date 1 December 2020

Number of pages 336

ISBN 978-0-19-870209-2

Visites 392

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