EU ANTITRUST: HOT TOPICS & NEXT STEPS

Prague, Czechia

EU ANTITRUST: HOT TOPICS & NEXT STEPS 2022

I. mistake meaning that competitors even avoid conduct which is in compliance with competition law for fear of a potential penalty. Wiliam Landes, however, building on Becker’s economic theory, interpreted the optimal antitrust fine to be the fine which equals the net harm caused to the persons other than the offender. (Landes, 1983, p. 656). This corresponds to the fact that even Becker did not intend to deter all crimes but only the inefficient ones. Only when the gain of crime for the offender was less than net harm for the rest of society, such crime was supposed to be deterred. Becker thus presumed a certain positive (efficient) level of criminality (Polinsky, Shavell, 1993, p. 2). According to Landes, the optimal fine for antitrust offences should therefore be derived from the amount of damage caused by anticompetitive conduct and if the anticompetitive conduct was held efficient (profit was higher than net damage), it should not be deterred. In this paper, I take a deterrent approach according to which all anticompetitive conduct (excluding the justified exceptions) should be deterred, not only the inefficient ones (Hylton, 2005, p. 5). This corresponds to the aim of antitrust law which is to eliminate the transfer of wealth from the consumers to competitors. Moreover, if we aim at the prevention of cartels, we have to limit incentives to enter into cartel contracts (Hylton, 2017, p. 23). And of course, a rational competitor who counts profits and costs of their behaviour will compare their expected cartel profit with the expected costs of such behaviour rather than the damage caused to consumers, other competitors or competition itself. Moreover, the damage caused by cartel is a broad concept not limited to a mere overcharge and thus the estimation of all damage caused by cartel is almost impossible (DG Comp, 2010). 2.2 Model of optimal fine The model of optimal fine developed by Buccirossi and Spagnolo distinguishes between optimal compensatory and deterrence fines. The first does not consider the probability of detection being lower than 1. Such an optimal compensatory fine aims only at taking all the cartel profit from the cartelists away so that the anticompetitive conduct does not pay off. The deterrence fine takes into account that in reality only a minor portion of cartels is detected and punished and that the potential cartelists are aware of that. Thus, the compensatory fine must be multiplied by a probability of detection which is lower than 1 to prevent anticompetitive conduct. Compensatory fine can be mathematically expressed as follows: CF* = △ π , Where △ π is the profit increase reached as a result of cartel, whereas the optimal deterrence fine can be expressed as follows: DF* = △ π / α

337