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Economics, Business and Management.
Damage actions may reduce leniency programs’ attractiveness for cartel participants if their cooperation with the competition authority increases the chance that the cartel’s victims will sue them. This apparent conflict between public and private antitrust enforcement led to calls for a legal compromise. We show that the conflict is due to the legislation and a compromise is not required: limiting the victims’ ability to recover their loss is not necessary to preserve the effectiveness of leniency programs and may be counterproductive. We show that damage actions will actually improve its effectiveness, if the civil liability of the immunity recipient is minimized and full access to all evidence collected by the competition authority, is granted to claimants. Our results help compare the EU and US damage systems and directly question the 2014 EU Directive which tries to protect leniency programs’ effectiveness by restricting access to leniency statements in subsequent damage actions.
Paolo Buccirossi, Catarina Marvão, and Giancarlo Spagnolo, Leniency and Damages: Where Is the Conflict?, The Journal of Legal Studies 2020 49:2, 335-379