Diminishing Enforcement: Negative Effects for Deterrence of Mistaken Settlements and Misguided Competition Promotion and Advocacy

Posted by D. Daniel Sokol

Francisco Marcos (Instituto de Empresa Business School) addresses Diminishing Enforcement: Negative Effects for Deterrence of Mistaken Settlements and Misguided Competition Promotion and Advocacy.

ABSTRACT: Competition policy is conceived to preserve and promote free market competition. It is fleshed out through a mix of tools that are used to further consumer welfare by preserving and promoting the efficient functioning of markets. Courts, administrative authorities and governments play different roles in the execution of competition policy. However, relatively recent developments have increased the number of tools in the shed of competition law enforcement.

This paper criticizes certain uses, mistaken or misguided, of settlements, advocacy and promotion by competition authorities. These are two very different settings in which the deterrent feature of competition authorities’ enforcement actions may suffer a deathly blow. If wrongly used, both may endanger the deterrent principle upon which competition law is built. The basic point of departure is that the new tools might be diminishing the effectiveness of ‘regular’ competition law enforcement — which shall not be left in the shed to rust.