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Corporate criminals in a market context: enforcement and optimal sanctions

Author

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  • Emmanuelle Auriol

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Erling Hjelmeng

    (UiO - University of Oslo, Norwegian School of Economics and Business Administration - Norwegian School of Economics and Business Administration)

  • Tina Søreide

    (Norwegian School of Economics and Business Administration - Norwegian School of Economics and Business Administration)

Abstract

By combining approaches from the economic theory of crime and of industrial organization, this paper analyzes optimal enforcement for three different forms of corporate misconduct that harm competition. The analysis shows why corporate crime is more harmful in large markets, why governments have a disinclination to sanction firms whose crime materializes abroad, and why leniency for those who self-report their crime is a complement, and not a substitute, to independent investigation and enforcement. As public authorities rely increasingly on self-reporting by companies to detect cartels, the number of leniency applications is likely to decline, and this is borne out by data. Upon a review of 50 cases of corporate liability from five European countries, competition law enforcement, governed by a unified legal regime, is more efficient than enforcement in bribery and money laundering cases, governed by disparate criminal law regimes. Sanction predictability and transparency are higher when governments cooperate closely with each other in law enforcement, when there are elements of supra-national authority, and when the offense is regulated by a separate legal instrument. Given our results, Europe would benefit from stronger supra-national cooperation in regulation and enforcement of transnational corporate crime, especially for the sake of deterrent penalties against crime committed abroad.

Suggested Citation

  • Emmanuelle Auriol & Erling Hjelmeng & Tina Søreide, 2023. "Corporate criminals in a market context: enforcement and optimal sanctions," Post-Print hal-04498703, HAL.
  • Handle: RePEc:hal:journl:hal-04498703
    DOI: 10.1007/s10657-023-09773-w
    Note: View the original document on HAL open archive server: https://hal.science/hal-04498703
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    References listed on IDEAS

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    More about this item

    Keywords

    Corporate liability; Corruption; Collusion; Antitrust; Money Laundering; Deterrence; Sanctions; Litigation;
    All these keywords.

    JEL classification:

    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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