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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal European Journal of Law and Economics.
Volume (Year): 33 (2012)
Issue (Month): 1 (February)
Contact details of provider:
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
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Barros, Pedro Pita, 2003. "Looking behind the curtain--effects from modernization of European Union competition policy," European Economic Review, Elsevier, vol. 47(4), pages 613-624, August.
- A. Mitchell Polinsky, 2004.
"Optimal Fines and Auditing When Wealth is Costly to Observe,"
NBER Working Papers
10760, National Bureau of Economic Research, Inc.
- Polinsky, A. Mitchell, 2006. "Optimal fines and auditing when wealth is costly to observe," International Review of Law and Economics, Elsevier, vol. 26(3), pages 323-335, September.
- A. Mitchell Polinsky, 2004. "Optimal Fines and Auditing When Wealth is Costly to Observe," Discussion Papers 03-038, Stanford Institute for Economic Policy Research.
- Shavell, Steven, 1993. "The Optimal Structure of Law Enforcement," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 255-87, April.
- Frédéric Loss & Estelle Malavolti-Grimal & Thibaud Vergé & Fabian Bergès-Sennou, 2005.
"European Competition Policy Modernization : From Notifications to Legal Exception,"
2005-38, Centre de Recherche en Economie et Statistique.
- Loss, Frederic & Malavolti-Grimal, Estelle & Verge, Thibaud & Berges-Sennou, Fabian, 2008. "European competition policy modernization: From notifications to legal exception," European Economic Review, Elsevier, vol. 52(1), pages 77-98, January.
- Bergès, Fabian & Loss, Frédéric & Malavolti, Estelle & Vergé, Thibaud, 2008. "European Competition Policy Modernization: From Notification to Legal Exception," Open Access publications from University of Toulouse 1 Capitole http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
- Neven, Damien J & Röller, Lars-Hendrik, 1990.
"European Integration and Trade Flows,"
CEPR Discussion Papers
367, C.E.P.R. Discussion Papers.
- A. Mitchell Polinsky & Steven Shavell, 1999.
"The Economic Theory of Public Enforcement of Law,"
NBER Working Papers
6993, National Bureau of Economic Research, Inc.
- Gary S. Becker, 1974.
"Crime and Punishment: An Economic Approach,"
in: Essays in the Economics of Crime and Punishment, pages 1-54
National Bureau of Economic Research, Inc.
- Ulrich Blum & Nicole Steinat & Michael Veltins, 2008. "On the rationale of leniency programs: a game-theoretical analysis," European Journal of Law and Economics, Springer, vol. 25(3), pages 209-229, June.
- Polinsky, Mitchell & Shavell, Steven, 1979. "The Optimal Tradeoff between the Probability and Magnitude of Fines," American Economic Review, American Economic Association, vol. 69(5), pages 880-91, December.
- Garoupa, Nuno, 1997. " The Theory of Optimal Law Enforcement," Journal of Economic Surveys, Wiley Blackwell, vol. 11(3), pages 267-95, September.
- Buccirossi, Paolo & Spagnolo, Giancarlo, 2006. "Optimal Fines in the Era of Whistleblowers," CEPR Discussion Papers 5465, C.E.P.R. Discussion Papers.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.