Evaluating Antitrust Leniency Programs

Posted by D. Daniel Sokol

Joan-Ramon Borrell Arqué, University of Barcelona, Juan Luis Jimenez, University of Las Palmas de Gran Canaria and Carmen Garcia are Evaluating Antitrust Leniency Programs.

ABSTRACT: This paper identifies and then quantifies econometrically the impact of leniency programs on the perception of the effectiveness of antitrust policies using country level panel data for a 10-year span. Leniency programs have been introduced gradually in antitrust legislation across the globe to fight more effectively against cartels. We use the dynamics of the diffusion of such policy innovation across countries and over time to evaluate the impact of the program. We find that leniency programs have had a significant impact on the perception among the business community of the effectiveness of each country's antitrust policy. Leniency programs have become weapons of mass dissuasion in the hands of antitrust enforcers against the more damaging forms of explicit collusion among rival firms in the market place.