The Settlement Procedure in EC Cartel Cases: An Empirical Assessment

Hüschelrath, Kai; Laitenberger, Ulrich

doi:10.2139/ssrn.2663461

Cited by 5 publications

(7 citation statements)

References 30 publications

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“…As it is further revealed that the first stage of the respective settled cases does not show a substantial duration increase compared to their non-settled counterparts in the pre-settlement era -i.e., the respective post-SO activities are not simply shifted to the pre-SO stage 32 -it can be said that our quantitative evidence supports the conclusion that the introduction of the settlement notice reached its main aim of reducing the overall duration of the EC cartel enforcement process (see Hüschelrath and Laitenberger (2015) for an econometric approach confirming this key result).…”

Section: Settlement Proceduressupporting

confidence: 77%

Cartel Cases and the Cartel Enforcement Process in the European Union 2001 2015: A Quantitative Assessment

Hellwig

Hüschelrath

2016

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. CARTEL CASES AND AbstractWe provide a comprehensive quantitative assessment of cartels and the related cartel enforcement process in the European Union (EU) from 2001 to 2015. In a first step, we present a detailed characterization of all cartel cases decided by the European Commission (EC) with respect to various criteria such as the number of involved firm groups, cartel market shares and market share asymmetries, involved industries, affected countries, types of infringement, types of cartel breakdown as well as cartel duration. In a second step, we complement this cartel-based analysis with a quantitative assessment of the public cartel enforcement process in the European Union -subdivided further into its duration, types of cartel detection, the leniency program, the settlement procedure, overall fines imposed, and the conclusive appeals process with the General Court (GC) and the European Court of Justice (ECJ). JEL Class K21, L41

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Section: Settlement Proceduressupporting

confidence: 77%

Cartel Cases and the Cartel Enforcement Process in the European Union 2001 2015: A Quantitative Assessment

Hellwig

Hüschelrath

2016

SSRN Journal

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“…Before we turn to a discussion of our empirical analysis of the determinants and success of appeals in European cartel cases, it is important to point to a key difference between the European and U.S. enforcement systems. While the latter provides the possibility to agree on a settlement before a final court decision is reached, the settlement procedure in the European Union—introduced in 2008—can be applied only at the investigation stage of the EC and offers a 10 percent fine reduction in case the firms admit liability and waive certain procedural rights (for an overview, see Hüschelrath & Laitenberger ). However, once the EC has decided on a certain cartel case, the respective convicted firms only have the possibility of accepting (and paying) the fine or filing an appeal with the GC or the ECJ.…”

Section: The Appeals Process In the European Commission's Cartel Casesmentioning

confidence: 99%

The Appeals Process in the European Commission's Cartel Cases: An Empirical Assessment

Hüschelrath

Smuda

2016

J Empirical Legal Studies

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The appeals process is an important mechanism to correct legal errors and to improve existing laws and regulations. We use the data of 467 firm groups that participated in 88 cartels convicted by the European Commission between 2000 and 2012 to study both the characteristics of firm groups filing an appeal and the factors that determine their successfulness in terms of fine reduction. Applying a discrete choice and a two‐stage hurdle model, we find that while some characteristics—particularly the reform of the fine guidelines—only affect the probability of filing an appeal, other factors, such as the size of the fine imposed, in connection with characteristics such as ringleader, repeat offender, or leniency applicant, influence both the probability and the success of an appeal. We build on these results to derive conclusions for both firms and public policymakers.

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“…However, as already indicated above, the respective procedural efficiencies are expected to be realized especially by eliminating or reducing procedural steps required under the standard procedure such as full access to file 12 , drafting and translations as well as oral hearing and interpretation. Although parts of these procedures already take place before finalizing the statement of objections, the lion part is scheduled to take place after the SO under the standard procedure and the settlement procedure is therefore expected to reduce the overall duration of EC cartel investigations substantially (see Hüschelrath and Laitenberger (2015) for supporting empirical evidence).…”

Section: Characterization Of the Eu Settlement Proceduresmentioning

confidence: 99%

“…Without wanting to play down the relevance of any of these potential effects (see Hüschelrath and Laitenberger (2015) for a more detailed description), in the following, we limit our further assessment to the impact of the settlement procedure on the appeals process.…”

Section: The Impact Of the Settlement Procedures On The Appeals Processmentioning

confidence: 99%

“…However, before we turn to a sophisticated empirical analysis of this relationship, it appears important to study the interrelation between settlements and appeals qualitatively a little further (see Hüschelrath and Laitenberger (2015)). Generally, from an economic perspective, the decision of companies to either settle or appeal depends on the expected returns generated by the two options.…”

Section: The Impact Of the Settlement Procedures On The Appeals Processmentioning

confidence: 99%

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Settlements and Appeals in the European Commission's Cartel Cases: An Empirical Assessment

2016

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. SETTLEMENTS AND APPEALS IN THE EUROPEAN COMMISSION'S CARTEL CASES: AN EMPIRICAL ASSESSMENT AbstractThe introduction of the European Union (EU) Settlement Procedure in 2008 aimed at promoting the procedural efficiency of cartel investigations by the European Commission (EC). We use a data set consisting of 579 firms groups convicted by the EC for cartelization from 2000 to 2015 to investigate the impact of the settlement procedure on the probability to file an appeal. Based on the estimation of a model of the firm's decision to appeal in the presettlement era, we subsequently run out-of-sample predictions to estimate the number of hypothetical appeals cases in the settlement era absent the settlement procedure. Our findings of a settlement-induced reduction in the number of appeals of up to 55 percent allow the conclusion that the introduction of the settlement procedure generated substantial additional benefits to society beyond its undisputed key contribution of a faster and more efficient handling of cartel investigations by the EC.

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The Settlement Procedure in EC Cartel Cases: An Empirical Assessment

Cited by 5 publications

References 30 publications

Cartel Cases and the Cartel Enforcement Process in the European Union 2001 2015: A Quantitative Assessment

Cartel Cases and the Cartel Enforcement Process in the European Union 2001 2015: A Quantitative Assessment

The Appeals Process in the European Commission's Cartel Cases: An Empirical Assessment

Settlements and Appeals in the European Commission's Cartel Cases: An Empirical Assessment

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