SITE research examines EU Directive on antitrust damages actions
On November 26th of 2014, an EU Directive on antitrust damages actions has been signed into law. European Commission argues that “the Directive is designed to achieve a more effective enforcement of the EU antitrust rules: it will fine-tune the interplay between private damages claims and public enforcement, and preserve the attractiveness of tools used by European and national competition authorities, in particular leniency and settlement programmes”. But solutions incorporated in the Directive strikes a compromise between public and private enforcement by preventing the use of leniency statements in subsequent actions for damages and limiting the liability of the immunity recipient to its direct and indirect purchasers (unless the other cartelists are unable to fully compensate the victims).
Latest research paper by Buccirossi, Marvão and Spagnolo (2014) provides a rigorous theoretical analysis of the problem and compares different legal systems in the EU and US.
Research insights
The authors show that a compromise between private and public antitrust enforcement – or between the objective of cartel deterrence and the right of cartel victims’ to be compensated, was never actually needed.
The paper also shows that to maximize the attractiveness of the Leniency Programme and deterrence, it is optimal to: a) minimize the amount of damages the leniency applicant is liable for, and b) maximize the share of information collected by the competition authority and made accessible by the claimants, including leniency statements.
Read more about the solution and characteristics of optimal regime that researchers describe in their policy brief on Leniency, damages and deterrence on the Forum for Research on Eastern Europe and Emerging Economies or download the full working paper here.
