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The Appeals Process in the European Commission's Cartel Cases: An Empirical Assessment

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  • Kai Hüschelrath
  • Florian Smuda

Abstract

The appeals process is an important mechanism to correct legal errors and to improve existing laws and regulations. We use the data of 467 firm groups that participated in 88 cartels convicted by the European Commission between 2000 and 2012 to study both the characteristics of firm groups filing an appeal and the factors that determine their successfulness in terms of fine reduction. Applying a discrete choice and a two‐stage hurdle model, we find that while some characteristics—particularly the reform of the fine guidelines—only affect the probability of filing an appeal, other factors, such as the size of the fine imposed, in connection with characteristics such as ringleader, repeat offender, or leniency applicant, influence both the probability and the success of an appeal. We build on these results to derive conclusions for both firms and public policymakers.

Suggested Citation

  • Kai Hüschelrath & Florian Smuda, 2016. "The Appeals Process in the European Commission's Cartel Cases: An Empirical Assessment," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 13(2), pages 330-357, June.
    • Handle: RePEc:wly:empleg:v:13:y:2016:i:2:p:330-357
    DOI: 10.1111/jels.12117
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    References listed on IDEAS

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    1. Steven Shavell, 2010. "On the Design of the Appeals Process: The Optimal Use of Discretionary Review versus Direct Appeal," The Journal of Legal Studies, University of Chicago Press, vol. 39(1), pages 63-108, January.
    2. Theodore Eisenberg & Henry S. Farber, 2013. "Why Do Plaintiffs Lose Appeals? Biased Trial Courts, Litigious Losers, or Low Trial Win Rates?," American Law and Economics Review, American Law and Economics Association, vol. 15(1), pages 73-109.
    3. Theodore Eisenberg & Thomas Eisenberg & Martin T. Wells & Min Zhang, 2015. "Addressing the Zeros Problem: Regression Models for Outcomes with a Large Proportion of Zeros, with an Application to Trial Outcomes," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 12(1), pages 161-186, March.
    4. Shavell, Steven, 1995. "The Appeals Process as a Means of Error Correction," The Journal of Legal Studies, University of Chicago Press, vol. 24(2), pages 379-426, June.
    5. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    6. 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.
    7. Santolino, Miguel, 2010. "Determinants of the decision to appeal against motor bodily injury judgements made by Spanish trial courts," International Review of Law and Economics, Elsevier, vol. 30(1), pages 37-45, March.
    8. Bueren, Eckart & Hüschelrath, Kai & Veith, Tobias, 2014. "Time is money - how much money is time? Interest and inflation in competition law actions for damages," ZEW Discussion Papers 14-008, ZEW - Leibniz Centre for European Economic Research.
    9. Steven Shavell, 2006. "The Appeals Process and Adjudicator Incentives," The Journal of Legal Studies, University of Chicago Press, vol. 35(1), pages 1-29, January.
    10. William J. Burke, 2009. "Fitting and interpreting Cragg's tobit alternative using Stata," Stata Journal, StataCorp LP, vol. 9(4), pages 584-592, December.
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    Cited by:

    1. Juan Luis Jiménez & Manuel Ojeda-Cabral & José Manuel Ordóñez-de-Haro, 2023. "Who Blows the Whistle on Cartels? Finding the Leniency Applicant at the European Commission," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 63(2), pages 123-153, September.

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