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Review of Industrial Organization

, Volume 48, Issue 1, pp 1–27 | Cite as

The EU Leniency Programme and Recidivism

  • Catarina MarvãoEmail author
Article

Abstract

The EU Leniency Programme aims to encourage the dissolution of existing cartels and the deterrence of future cartels, through self-reporting and/or significant cooperation by cartel members during an investigation. However, the European Commission guidelines are vague in terms of the factors that influence the granting and scale of leniency-related penalty reductions. In this paper, the empirical analysis of the penalty reductions that have been granted shows, as expected, that the first reporting or cooperating firms receive generous fine reductions. More importantly, there is some evidence that firms can “learn how to play the leniency game”, either learning how to cheat or how to report, as the reductions that are given to repeat (and multiple) offenders are substantially higher. These results have an ambiguous impact on firms’ incentives and major implications for policy making.

Keywords

Cartels Competition policy Leniency Programme  Self-reporting 

JEL Classification

K21 K42 L4 L51 

Notes

Acknowledgments

I thank Joseph Harrington, Michele Polo, Giancarlo Spagnolo, Francis O’Toole, Carol Newman, Cinzia Rovesti and Kai-Uwe Kuhn, for comments and suggestions. I also thank the audiences at Trinity College Dublin, ISNE 2011, EARIE 2011 and CRESSE 2012 for helpful comments.

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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.SITE - Stockholm School of EconomicsStockholmSweden

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