Competition Law Review

Volume 7 - Issue 2

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Whole Issue

Competition Law Review - Volume 7 Issue 2 CompLRev Vol 7 Issue 2 (594 KB)


Antitrust Leniency Programmes

Christopher R Leslie Editorial - Leslie (116 KB)


The Interaction of Leniency Programmes and Actions for Damages
Caroline Cauffman Vol 7 Issue 1 Article 2 - Cauffman (394 KB)

Although leniency programmes and damages actions, at least to a certain extent, serve the same purpose of increasing compliance with the competition rules, an increasing number of damages actions risk undermining national and EU leniency programmes, because the risk of follow-on damages actions may discourage potential leniency applicants from coming forward. To increase the successful co-existence of leniency programmes and damages actions, the law can interfere at two stages: it can prevent disclosure of leniency applications and it can decrease the risk or the amount of damages to be paid by leniency recipients. This contribution will explain the current rules on these matters and analyse a number of proposals for reform. The analysis will result in a suggestion to introduce at EU level a regime to improve the procedural position of the leniency recipient in proceedings for cartel damages based on the Hungarian model.

Leniency and Individual Liability: Opening the Black Box of the Cartel
Florence Thépot Vol 7 Issue 2 Article 2 - Thepot (239 KB)

The purpose of this article is to examine the interplay between two competition policy enforcement instruments - leniency policy and individual liability, by opening the ‘black box’ of the cartel, with the analysis of interactions both among the cartel members and within each company. The interplay of these instruments translates into a two-dimensional system: the horizontal dimension is formed by the cartel members; the vertical one by the interactions within each cartel member. We base our analysis on the theory of the firm, advocating the separation of ownership and control, and on the theory of agency that states the principles of inherent moral hazard problems between the principal (owner) and the agent (manager). The reasoning is carried out along economic and legal literature on collusive agreements, leniency programmes and individual liability. The economic literature also gives key insights on corporate governance issues that are relevant in cartels, through game theoretical approaches. Theoretical insights will help us to understand why cartel activity is a matter of agency and governance issues. The subsequent section will be dedicated to the examination of individual liability and corporate leniency policy, in the light of agency issues. Individual leniency policy will be assessed in the last section. Individual leniency programmes are in practice never used by individuals of companies of a cartel. Nonetheless, such programmes are efficient in the way they undermine both the relations between cartel members and those inside the companies. We show how opening the ‘black box’ of the cartel is of primary importance when assessing the efficiency of leniency and individual liability. Agency issues shape the interactions between actors operating in both dimensions of the system under consideration, which are the principals and the agents of the firms of the cartel.