A PYMNTS Company

Lobbying And Cartel Enforcement

 |  January 19, 2023

By Alexandre Girard, Jean-Yves Gnabo & Rodrigo Londoño van Rutten, University of Namur & UCLouvain Saint-Louis Brussels

This paper examines the effect of firms’ lobbying activities on penalties received from public competition authorities. We show that lobbying expenditures are negatively associated with the amount of the cartel sanction, within cartel. Our estimates also report that cartel sanctions are more responsive to lobbying expenditures when (1) the head of the antitrust authority is aligned with the president and (2) the lobbying firm qualifies for the leniency program. Overall, our results appear consistent with the regulatory capture and the informational lobbying theories, with a stronger effect for the latter.

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