By Yannis Katsoulacos, Evgenia Motchenkova & David Ulph
In this article we discuss recent theoretical literature pointing to the ineffectiveness, in terms of welfare impact, of currently applied sanctioning regimes for cartels by Competition Authorities (CAs). We then, for the first time, provide a comparison of different regimes taking also into account criteria other than welfare, related to ease of implementation and transparency. We argue the case for switching to a penalty regime, in which the penalty base continues to be the currently dominant penalty base of cartel revenue but in which, in contrast to current practice, the penalty rate is based on the cartel overcharge – which is commonly estimated in order to calculate damages in private damage claims.
