Preventing innovative cooperations: the legal exemptions unintended side effect
AbstractIn 2004, European competition law had been faced with considerable changes due to 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 on the agreements firms implement. In contrast to previous research we focus on the reformâs impact on especially welfare enhancing, namely innovative agreements. We show that the lawâs intention to reduce the incentive to establish illegal cartels will be reached. However, by the same mechanism, also highly innovative cooperations might be prevented. To avoid this unintended effect, we conclude that only fines but not the monitoring activities should be increased in order to deter illegal but not innovative agreements.
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Bibliographic InfoArticle provided by Springer in its journal European Journal of Law and Economics.
Volume (Year): 33 (2012)
Issue (Month): 1 (February)
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Web page: http://www.springerlink.com/link.asp?id=100264
Competition policy; Competition law enforcement; Legal exemption system; K42; L40;
Other versions of this item:
- Christian Growitsch & Nicole Nulsch & Margarethe Rammerstorfer, 2008. "Preventing Innovative Cooperations: The Legal Exemptions Unintended Side Effect," IWH Discussion Papers 6, Halle Institute for Economic Research.
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
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