Monday, November 13, 2017
Félix E Mezzanotte, Hong Kong Polytechnic University - School of Accounting and Finance offers Comments on Argentina's New Leniency Program.
ABSTRACT: Argentina has embarked in the process of passing a new competition law that will introduce, for the very first time, a leniency program (ALP). This article outlines the key characteristics of the proposed ALP. It also offers a critical analysis of the ALP through comparisons with US and EC leniency policy, and by reference to findings from economic research investigating the effectiveness of leniency programs. The analysis indicates that while the ALP has aligned with international practices in most respects, there is also room for improvement. In particular, runner-up applicants are offered a penalty reduction package that is overly attractive, a policy which contrasts with findings from economic research. Too benevolent a treatment of runner-up applicants may fuel cartel detection yet at the onerous price of curtailing cartel deterrence. Mechanisms that reduce the chances of diminished cartel deterrence are also accounted for in the analysis such as the key role of hefty sanctions and the need for a competition authority to avert the crowding-out effects arising from mounting numbers of leniency investigations. Importantly, the rules governing the liability of physical persons for breaches of competition law and the eligibility of these persons to apply for leniency merit further clarification.