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Cartel Overcharges And The Deterrent Effect Of Eu Competition Law

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  • Florian Smuda

Abstract

This article examines cartel overcharges for the European market. Using a sample of 191 overcharge estimates and several parametric and semiparametric estimation procedures, the impact of different cartel characteristics and the market environment on the magnitude of overcharges is analyzed. The mean and median overcharge rates are found to be 20.70 percent and 18.37 percent of the selling price and the average cartel duration is 8.35 years. Certain cartel characteristics and the geographic region of cartel operation influence the level of overcharges considerably. Furthermore, empirical evidence reveals that from an ex-post perspective the currently existing fine level of the EU Guidelines is insufficient for optimal cartel deterrence, suggesting further adjustments.

Suggested Citation

  • Florian Smuda, 2014. "Cartel Overcharges And The Deterrent Effect Of Eu Competition Law," Journal of Competition Law and Economics, Oxford University Press, vol. 10(1), pages 63-86.
    • Handle: RePEc:oup:jcomle:v:10:y:2014:i:1:p:63-86.
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    File URL: http://hdl.handle.net/10.1093/joclec/nht012
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    References listed on IDEAS

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    1. Cento Veljanovski, 2011. "Deterrence, Recidivism, And European Cartel Fines," Journal of Competition Law and Economics, Oxford University Press, vol. 7(4), pages 871-915.
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    5. Bolotova, Yuliya V., 2009. "Cartel overcharges: An empirical analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 321-341, May.
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    7. Leonardo J. Basso & Thomas W. Ross, 2010. "Measuring The True Harm From Price‐Fixing To Both Direct And Indirect Purchasers," Journal of Industrial Economics, Wiley Blackwell, vol. 58(4), pages 895-927, December.
    8. Kenneth Y. Chay & James L. Powell, 2001. "Semiparametric Censored Regression Models," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 29-42, Fall.
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    Citations

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    Cited by:

    1. Arno Rasek & Florian Smuda, 2018. "Ex-Post Evaluation of Competition Law Enforcement Effects in the German Packaging Waste Compliance Scheme Market," De Economist, Springer, vol. 166(1), pages 89-109, March.
    2. Comisión Nacional de los Mercados y la Competencia (CNMC), 2023. "Guide. Competition against inflation: How competition and efficient regulation help protect the purchasing power of consumers," Colección Estudios de Mercado G-2022-02_ENG, Comisión Nacional de los Mercados y la Competencia (CNMC).
    3. Kai Huschelrath & Sebastian Peyer, 2013. "Public and Private Enforcement of Competition Law A Differentiated Approach," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2013-05, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    4. Piccolo, Salvatore & Pignataro, Aldo, 2018. "Consumer loss aversion, product experimentation and tacit collusion," International Journal of Industrial Organization, Elsevier, vol. 56(C), pages 49-77.
    5. Hüschelrath, Kai & Peyer, Sebastian, 2013. "Public and private enforcement of competition law: A differentiated approach," ZEW Discussion Papers 13-029, ZEW - Leibniz Centre for European Economic Research.
    6. Hoang, Cung Truong & Hüschelrath, Kai & Laitenberger, Ulrich & Smuda, Florian, 2014. "Determinants of self-reporting under the European corporate leniency program," International Review of Law and Economics, Elsevier, vol. 40(C), pages 15-23.
    7. Iwan Bos & Stephen Davies & Peter L. Ormosi, 2014. "The deterrent effect of anti-cartel enforcement: A tale of two tails," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2014-06v2, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    8. Harrington, Joseph E., 2014. "Penalties and the deterrence of unlawful collusion," Economics Letters, Elsevier, vol. 124(1), pages 33-36.
    9. Salvatore Piccolo & Giancarlo Spagnolo, 2014. "Debt, Managers and Cartels," CSEF Working Papers 365, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    10. Hüschelrath, Kai & Laitenberger, Ulrich, 2015. "The settlement procedure in EC cartel cases: An empirical assesment," ZEW Discussion Papers 15-064, ZEW - Leibniz Centre for European Economic Research.
    11. Moritz Birgit & Becker Martin & Schmidtchen Dieter, 2018. "Measuring the Deterrent Effect of European Cartel Law Enforcement," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 18(3), pages 1-27, July.

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    More about this item

    JEL classification:

    • 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
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations

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