Wednesday, November 26, 2008
Free Movement of Judgments: Increasing Deterrence of International Cartels Though Jurisdictional Reliance
Posted by D. Daniel Sokol
Michal Gal of the University of Haifa Law School writes on Free Movement of Judgments: Increasing Deterrence of International Cartels Though Jurisdictional Reliance.
ABSTRACT: This article challenges the conventional wisdom that not much can be done under the existing atomistic system of antitrust enforcement to solve the problem of sub-optimal deterrence of international cartels. Low deterrence results from the fact that international cartels are generally prosecuted by only a fraction of the jurisdictions harmed by them and that monetary sanctions in those jurisdictions are generally based on harm to their domestic markets only. To solve this problem, this article proposes a novel legal tool which enables countries to adopt and rely upon foreign findings of international hard-core cartels, provided that the foreign decisions meet criteria that ensure that such reliance is reasonable and fair. As elaborated, this free movement of judgments holds potential to overcome the main obstacles to efficient deterrence and to significantly increase both domestic as well as global welfare. Its costs can also be largely overcome by designing appropriate solutions. The political implications are also not prohibitive. As shown, jurisdictions already rely on foreign judgments that do not significantly differ from the decisions at hand.