Rebating Antitrust Fines to Encourage Private Damages Negotiations
Publisher DOI
Abstract
To encourage private negotiations for damages in antitrust cases some jurisdictions subtract a fraction of the redress from the fine. We analyze the effectiveness of this policy. Such a rebate does not encourage settlement negotiations that would otherwise not occur. If, however,
the parties settle without the rebate, the introduction of the reduction may increase the settlement amount. Yet deterrence for those wrongdoers who are actually fined always goes down. Under a leniency program the rebate does not affect the leniency applicant: she doesn’t
pay a fine that can be reduced. The overall effect of a fine reduction on deterrence is, therefore, negative.
the parties settle without the rebate, the introduction of the reduction may increase the settlement amount. Yet deterrence for those wrongdoers who are actually fined always goes down. Under a leniency program the rebate does not affect the leniency applicant: she doesn’t
pay a fine that can be reduced. The overall effect of a fine reduction on deterrence is, therefore, negative.
Date Issued
2023-03
Publication Type
Article
Language(s)
en
Journal
American law and economic review
Publisher
Oxford University Press
ISSN
1465-7260
Access(Rights)
Unknown