Criminalization of Competition Law Enforcement
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Criminalization of Competition Law Enforcement

Economic and Legal Implications for the EU Member States

Edited by Katalin J. Cseres, Maarten Pieter Schinkel and Floris O.W. Vogelaar

This timely book brings together contributions from prominent scholars and practitioners to the ongoing debate on the criminalization of competition law enforcement. Recognizing that existing remedies and sanctions may be insufficient to deter breaches of competition law, several EU Member States have followed the US example and introduced pecuniary penalties for executives, professional disqualification orders, and even jail sentences. Addressing issues such as unsolved legal puzzles, standard of proof, leniency programs and internal cartel stability, this book is a marker for future policy debate.
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Chapter 10: The Negative Interplay between National Custodial Sanctions and Leniency

Michael J. Frese


Michael J. Frese 1 INTRODUCTION By institutionalizing its policy to grant lenient treatment1 and its method of setting fines,2 the European Commission has considerably curtailed its discretionary powers – delegated by Regulation 1/20033 – to sanction infringements of Article 81 EC. Moreover, it has given undertakings the possibility to calculate the costs of collusion and the benefits of applying for leniency when the Commission enforces against a cartel. If the costs of possibly being fined are sufficiently high and transparent, and the benefits of leniency are considerable and certain, early whistleblowing will be stimulated.4 The Commission’s leniency policy has already proven to be an effective tool for the destabilization of cartels.5 However, in the Community’s current decentralized enforcement system, cartels will be increasingly pursued by National Competition Authorities (‘NCAs’) pursuant to national procedures, which may differ greatly. As different sanctioning procedures imply different leniency policies, several national leniency schemes are operative parallel to the Commission’s Leniency Notice.6 It is questionable whether these diverging sanctioning procedures can effectively contribute to the destabilization of cartels. When the Commission does not enforce against a cartel, for example, due to lack of competence or prioritization,7 colluding undertakings could be prosecuted and sanctioned by NCAs under their respective national sanctioning schemes.8 Collaborating undertakings will then be ‘forced’ to file multiple leniency applications. Multiple leniency schemes consist of different, possibly conflicting criteria that will inevitably hamper transparency and certainty and therefore might endanger applications for leniency altogether. Furthermore, the fact that some Member...

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