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The Assessment of Agreements for which Temporary Antitrust Immunity is Sought: Competition Authority's Perspective

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  • Fatih Cemil Ozbugday

    (Tilburg Law and Economics Center (TILEC), Tilburg University)

Abstract

The present study provides an analysis of the conditions that led the Dutch competition authority (the NMa) to decide against a temporary antitrust immunity seeking agreement on antitrust grounds. First, a theoretical Bayesian decision framework, that is similar to that of Cooper et al. (2005), is presented to derive the optimal enforcement rule for agreements for which ex ante antitrust immunity is sought. The NMa's decisions are then investigated in an econometric background where those final decisions are linked to various industry characteristics, as the NMa took them into consideration when making its final decision. In doing so, a bivariate Probit model with sample selection is estimated to account for the fact that non-application by firms operating in a specific industry for an exemption might result in significant bias. The econometric results suggest it is more likely that concerted practices are seen as anti-competitive in more competitive and less concentrated industries. Finally, the narrative evidence on the legal and institutional background, and the econometric results are interpreted in light of the theoretical Bayesian decision framework.

Suggested Citation

  • Fatih Cemil Ozbugday, 2011. "The Assessment of Agreements for which Temporary Antitrust Immunity is Sought: Competition Authority's Perspective," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2011-15, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    • Handle: RePEc:uea:ueaccp:2011_15
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    References listed on IDEAS

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    1. Jan Boone, 2008. "A New Way to Measure Competition," Economic Journal, Royal Economic Society, vol. 118(531), pages 1245-1261, August.
    2. Erik Brouwer & Fatih Cemil Ozbugday, 2011. "What Determines Behavior Seeking Temporary Antitrust Immunity?: Dispensation Requests In The Netherlands," Journal of Competition Law and Economics, Oxford University Press, vol. 7(3), pages 671-694.
    3. Gual, Jordi & Mas, Nuria, 2010. "European Commission decisions on anti-competitive behavior," IESE Research Papers D/846, IESE Business School.
    4. Van de Ven, Wynand P. M. M. & Van Praag, Bernard M. S., 1981. "The demand for deductibles in private health insurance : A probit model with sample selection," Journal of Econometrics, Elsevier, vol. 17(2), pages 229-252, November.
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