Competition Buzz: Leniency in Antitrust Enforcement – Theory and Practice

By: Wouter P.J. Wils
Kings College London

Leniency programs are one of the more recent tools to make it into the arsenal of Competition regulators in order to fight back against monopoies and collusion agreements. However, despite their usefulness, this has proven to be a controversial tool, and the source of much discussion. As a result, its widespread adoption throughout the world has been a slow, cautious process.

This paper discusses the theory and practice of leniency in antitrust enforcement, i.e. the granting of immunity from penalties or the reduction of penalties for antitrust violations in exchange for cooperation with the antitrust enforcement authorities. After a description of the practice of leniency in the US and in the EU, and of its history, the paper analyses the positive effects and the possible negative effects of leniency on optimal antitrust enforcement, and the extent to which these effects can be measured. Objections of principle and institutional problems that may constitute obstacles to the introduction of leniency policies are discussed, as well as some further issues, namely the impact on the effectiveness of leniency of criminal penalties on individuals, of follow-on private damages actions, and of penalties in other jurisdictions.

Read the Full Article at SSRN

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