New working paper by Paolo Buccirossi and Giancarlo Spagnolo on the relationship between action for damages and leniency programs. Modern antitrust engenders a possible conflict between public and private enforcement due to the central role of Leniency Programs.
Damage actions may reduce the attractiveness of Leniency Programs for cartel participants if their cooperation with the competition authority increases the chance that the cartel’s victims will bring a successful suit. A long legal debate culminated in an EU directive, adopted in November 2014, which seeks a balance between public and private enforcement. It protects the effectiveness of a Leniency Program by preventing the use of leniency statements in subsequent actions for damages and by limiting the liability of the immunity recipient to its direct and indirect purchasers.
The working paper analysis shows such compromise is not required: limiting the cartel victims’ ability to recover their loss is not necessary to preserve the effectiveness of a Leniency Program and may be counter-productive.
The paper shows that damage actions will actually improve its effectiveness, through a legal regime in which the civil liability of the immunity recipient is minimized (as in Hungary) and full access to all evidence collected by the competition authority, including leniency statements, is granted to claimants (as in the US).
To see the publication here