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Leniency Theory and Complex Realities

Author

Listed:
  • Andreas Stephan

    (Centre for Competition Policy and School of Law, University of East Anglia)

  • Ali Nikpay

    (Partner, Global Antitrust and Competition, Gibson, Dunn and Crutcher)

Abstract

This paper seeks to assess the robustness of the assumptions made by much of the theoretical literature on leniency programs, giving a glimpse of the uncertainties and complexities that apply in practice. First, sanctions are hard to estimate and the decision to form a cartel is not generally made by the firm as a rational monolith. Second, empirical evidence from the EU suggests an over-reliance on leniency, with only a weak threat of detection through investigations alone. Most leniency reporting may be occurring where a cartel has already ceased to operate or is very likely to be caught. Finally, the decision to come forward is not one that is taken lightly by the firm; it is fraught with uncertainties and dangers, including the challenges of ensuring cooperation from employees. The paper concludes with three recommendations for the strengthening of leniency policies.

Suggested Citation

  • Andreas Stephan & Ali Nikpay, 2014. "Leniency Theory and Complex Realities," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2014-08, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    • Handle: RePEc:uea:ueaccp:2014_08
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