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On the optimal use of commitment decisions under European competition law

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  • Choné, Philippe
  • Souam, Saïd
  • Vialfont, Arnold

Abstract

In Europe, competition authorities have the power to close antitrust cases with “commitment decisions” after the concerned firms have offered agreed remedies. We show that the optimal use of this instrument is governed by a tradeoff between deterrence of potentially anticompetitive practices and early restoration of effective competition. We relate the optimal policy to the distribution of firm profit and consumer harm among cases. We find, however, that the optimal policy is generally not enforceable when the authority cannot credibly announce its policy prior to the firms’ strategic decisions. The lack of authority credibility may translate into insufficient or excessive use of commitment decisions.

Suggested Citation

  • Choné, Philippe & Souam, Saïd & Vialfont, Arnold, 2014. "On the optimal use of commitment decisions under European competition law," International Review of Law and Economics, Elsevier, vol. 37(C), pages 169-179.
  • Handle: RePEc:eee:irlaec:v:37:y:2014:i:c:p:169-179
    DOI: 10.1016/j.irle.2013.10.003
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    References listed on IDEAS

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    Cited by:

    1. Tim Reuter, 2016. "Private antitrust enforcement and the role of harmed parties in public enforcement," European Journal of Law and Economics, Springer, vol. 41(3), pages 479-507, June.
    2. GAUTIER, Axel & PETIT, Nicolas, 2014. "Optimal enforcement of competition policy : the commitments procedure under uncertainty," CORE Discussion Papers 2014063, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. repec:kap:ejlwec:v:45:y:2018:i:2:d:10.1007_s10657-018-9578-7 is not listed on IDEAS

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