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Time is money - how much money is time? Interest and inflation in competition law actions for damages

Author

Listed:
  • Bueren, Eckart
  • Hüschelrath, Kai
  • Veith, Tobias

Abstract

Public and private action against cartels is an internationally recognized cornerstone of antitrust enforcement. Effective private enforcement requires that cartel victims can receive (at least) full compensation for the harm suffered. Academics and competition authorities support this goal with guidance for the calculation of cartel damages. However, they usually neglect that the prosecution of competition law infringements can be very time-consuming, so that it often takes several years until cartel victims obtain damages. Interest and inflation are thus two key drivers of adequate compensation. This paper is the first to provide a comparative law and economics perspective on this topic: We investigate how various legal systems treat interest and inflation as part of competition law actions for damages, and, using real-world data from the lysine cartel, simulate the economic differences, which turn out to be substantial. By comparing and evaluating the regulatory techniques, our paper provides important insights for regulators, litigation practitioners and the ongoing reform discussions in the EU and the US. At the same time, our approach is a first step towards a quantitative comparative law and economics analysis of the law on interest in the field of tort law.

Suggested Citation

  • 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.
    • Handle: RePEc:zbw:zewdip:14008
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    Citations

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    Cited by:

    1. Hüschelrath, Kai & Smuda, Florian, 2014. "The appeals process: An empirical assessment," ZEW Discussion Papers 14-063, ZEW - Leibniz Centre for European Economic Research.
    2. 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.
    3. 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.

    More about this item

    Keywords

    Antitrust policy; cartels; private enforcement; damages; interest; inflation;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics

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