EU ANTITRUST: HOT TOPICS & NEXT STEPS

Prague, Czechia

EU ANTITRUST: HOT TOPICS & NEXT STEPS 2022

Finally, the probability of detection plays an important role in deterrence. Even draconian punishments will have a limited deterrent effect if the potential offenders know that the probability of their detection and the imposition of a penalty is close to zero. Again, this parameter is unknown because most cartels stay unrevealed. Therefore, we have to estimate it. There are several empirical studies that developed stochastic detection models. For example, Combe and Monnier (Combe, Monnier, Legal, 2008, p. 17) found out from the European sample of cartels that the annual probability of detection is approximately 13%. Ormosi, using a capture-recapture analysis, finds the annual probability of detection between 10% – 20% (Ormosi, 2012, p. 566). Therefore, I set the probability of detection in this paper at 15 %. 2.2.1 Bid rigging In case of bid rigging, I have argued elsewhere (Nováková, 2017, p. 53) that the baseline for fines should be the value of the manipulated public procurement rather than turnover of the cartelist which can be reached lawfully. The current practice of the Office respects that and it really takes the value of the respective procurement as a baseline. The question, however, is, what value of the public procurement should be taken into account – the value stated in the tender documentation, or the price offered by the winner? This question was hotly debated even at the Svatomartinská competition law conference in Brno held on 10 and 11 November 2021 where approximately half of the participants voted for the value stated in the tender documentation and the other half for the price offered by the winner. I suggest the second. I assume that the price offered by the winner is the one manipulated by the cartel members and therefore this price includes the cartel profit which must be taken away as a deterrent. The optimal fine for bid rigging cases can be then mathematically expressed as follows: DF* = 0,2xV/ α where V is the value of the procurement (the price offered by the winner). I have calculated with 20% of overcharge of the procurement since the Office repeatedly estimates such an increase in the value of procurements as a result of bid rigging (Annual report of the Office, 2015). 3. Are the current fines optimal? The Office imposes the fines for anticompetitive conduct on the basis of sec. 22a subs. 2 of the law 143/2001 Sb, on the Protection of Competition. The fine imposed shall not exceed 10% of the total net turnover of a competitor reached in the last completed accounting period before the I. instance decision was issued (Supreme Administrative Court, 24 June 2014, no. 7 Afs 57/2011-1234).

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