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An Empirical Assessment of the 1996 Leniency Notice

Author

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  • Andreas Stephan

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

Abstract

Although the 1996 'Notice on the non-imposition or reduction of fines in cartel cases' has been criticised by academics as lacking clarity and certainty, it has been described in European Commission literature as an 'indisputable success' and as having played an 'instrumental role' in uncovering and punishing secret cartels. This paper makes an empirical assessment of horizontal cartel cases in the EC opened as a result of leniency applications under the 1996 notice. Nearly three quarters of the cartels apparently uncovered by this notice were subject to equivalent prior or simultaneous investigations in the U.S. In addition, most of the cartels that were revealed operated in the Chemical industry, were all connected to each other by virtue of the same firms' involvement in more than one cartel, and all failed or ceased to operate before being revealed to the Commission by a cartel member. These two findings would suggest that the 1996 leniency notice was only of limited success in inducing firms to reveal cartels and that most applications for immunity were as a natural consequence of cartels failing and firms looking once more to their own interests rather than those of the cartel. The leniency notice largely succeeded in uncovering failed cartels, not active ones.

Suggested Citation

  • Andreas Stephan, 2005. "An Empirical Assessment of the 1996 Leniency Notice," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2005-10, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    • Handle: RePEc:uea:ueaccp:2005_10
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    References listed on IDEAS

    as
    1. John M. Connor, 2004. "Extraterritoriality Of The Sherman Act And Deterrence Of Private International Cartels," Working Papers 04-08, Purdue University, College of Agriculture, Department of Agricultural Economics.
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    More about this item

    Keywords

    EU; Cartel Policy; Leniency Notice; Chemicals Industry;
    All these keywords.

    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
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General

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