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European Journal of Law and Economics

, Volume 33, Issue 1, pp 1–22 | Cite as

Preventing innovative cooperations: the legal exemptions unintended side effect

  • Christian Growitsch
  • Nicole Nulsch
  • Margarethe Rammerstorfer
Article

Abstract

In 2004, European competition law had been considerable changed by the introduction of the new Council Regulation No. 1/2003. One of the major renewals was the replacement of the centralized notification system for inter-company cooperations in favor of a so-called legal exemption system. We analyze the implications of this reform and its arising uncertainty on the agreements firms implement, especially on innovative agreements like vertical R&D agreements. By means of a decision theoretic approach, we show that the law’s intention to reduce the incentive to establish illegal cartels will be reached but innovating cooperations might be prevented. To avoid this unintended side effect, fines but not the monitoring activities should be increased.

Keywords

Competition policy Competition law enforcement Legal exemption system 

JEL-classification

K42 L40 

Notes

Acknowledgments

We thank an anonymous reviewer for very helpful comments and suggestions.

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Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  • Christian Growitsch
    • 1
  • Nicole Nulsch
    • 2
  • Margarethe Rammerstorfer
    • 3
  1. 1.University of Cologne and Martin Luther University Halle-WittenbergCologneGermany
  2. 2.Halle Institute for Economic ResearchHalle/SaaleGermany
  3. 3.Institute for Finance, Banking and InsuranceVienna University of Economics and BusinessWienAustria

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