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 in the business community using panel data for as much as 59 countries and 14-year span. We use the dynamics of the gradual diffusion of leniency programs across countries and over time to evaluate the impact of the program, taking care of the bias caused by self-selection into the program. We find that leniency programs increase the perception of effectiveness by an order of magnitude ranging from 10% to 21%. 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.JEL Codes: D7; K2; L4; O4.

The effects of competition policy, regulatory quality and trust on inward FDI in host countries

“…The CP literature has demonstrated that leniency programs were effective in general and their introduction represented a critical juncture that allowed NCAs to better enforce the law (Dasgupta & Žaldokas, 2019;Dong, Massa & Žaldokas, 2019;Ordóñez-De-Haro, Borrell & Jiménez, 2018). More important, Borrell, Jiménez, & García (2014) show that the adoption of leniency programs significantly increases the 'perception' of CP effectiveness (not only with reference to collusion), thus acting as "a weapon of mass dissuasion in the hands of antitrust enforcers" (Borrell et al, 2014: 107). This evidence definitely supports our choice of the staggered passage of those programs as a proxy for a general positive change in the perceived status of CP enforcement.…”

Review of collusion and bid rigging detection methods in the construction industry

“…It may lead to the decrease of their variety and to the selective application of only those most cost-efficient. Leniency programmes have recently become the most preferable method [21,[28][29][30]. Their beginnings extend to the 1970s, when the first leniency programme was implemented in the USA.…”

The difficult road to a better competition policy: How do competition authorities reforms affect antitrust effectiveness?

“…There is an empirical literature that evaluates, through survey-based indicators, the perception of the effectiveness of competition policy in a country. The main references are those of Nicholson (2008), Borrell and Jiménez (2008), Voigt (2009), Ma (2010Ma ( , 2012Ma ( , 2013, Gutmann andVoigt (2014), andBorrell et al (2014). All of them use two main sources: those elaborated by the World Economic Forum and those collected annually by the International Institute for Management Development (IMD).…”