Fining cartels: Over-enforcement by the EC Commission?

Based on a sample of 64 cartels convicted by the European Commission from 1975 to 2009, we estimate from easily computable microeconomic variables a range of restitution fines, which amount to the illicit gain, and a range of dissuasive fines, which take into account the probability of detection. We compare these two ranges to the fines actually inflicted to cartels in each case. Our results show that the fines imposed against cartels by the European Commission fall often below the illicit gain captured by the firms and remain very far from dissuasive levels. This article is inspired by an book of research PRISM-Sorbonne: " Fines against hard core cartels in Europe : the myth of over enforcement " (38 p., June, 2009). The tables are available in the PDF version of this article. The opinions expressed here are personal to their author and should not be considered as the one of their institution.

*This article is an automatic translation of the original article in French, provided here for your convenience. Read the original article. 1. With regard to the fight against cartels, the annual amount of fines imposed by the European Commission has increased considerably in recent years, reaching more than 10 billion euros in the period from 2004 to September 2009 alone. It is true that this increase is partly due to a volume effect: after 1996, when the first leniency programme was introduced, an average of 6.25 cartels were convicted per year, compared with 1.4 before. However, this effect does not explain everything, as the fine per cartel has also risen sharply (Figure 1). Figure 1: Fines imposed by cartel (1965-2009) [1] 2. A size effect could certainly be invoked, with

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Emmanuel Combe, Constance Monnier-Schlumberger, Fining cartels: Over-enforcement by the EC Commission?, December 2009, Concurrences N° 4-2009, Art. N° 28831, pp. 41-50

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