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Rebating Antitrust Fines to Encourage Private Damages Actions

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  • Emons, Winand
  • Lenhard, Severin

Abstract

To encourage private actions for damages in antitrust cases some jurisdictions subtract a fraction of the redress from the fine. We analyze the effectiveness of this policy. Such a rebate does not encourage settlement negotiations that would otherwise not occur. If, however, the parties settle without the rebate, the introduction of the reduction increases the settlement amount, yet at the price of reduced deterrence for those wrongdoers who are actually fined. Under a leniency program the rebate has no effect on the leniency applicant: she doesn't pay a fine that can be reduced. The overall effect of a fine reduction on deterrence is, therefore, negative.

Suggested Citation

  • Emons, Winand & Lenhard, Severin, 2020. "Rebating Antitrust Fines to Encourage Private Damages Actions," CEPR Discussion Papers 14369, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:14369
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    Cited by:

    1. Peter T. Dijkstra & Jacob Seifert, 2023. "Cartel Leniency and Settlements: A Joint Perspective," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 63(2), pages 239-273, September.

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    More about this item

    Keywords

    Antitrust; Damages; Deterrence; Leniency;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • 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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