CPI Symposium featuring Ginsburg and Wright on Antitrust Sanctions
Competition Policy International’s newest issue has been released. The issue is focused on cartel sanctions and features a colloquium on a piece co-authored by Judge Douglas Ginsburg and me on Antitrust Sanctions, with comments from a fantastic lineup of antitrust economists and lawyers: Joseph Harrington (Johns Hopkins), Pieter Kalbfleisch (Netherlands Competition Authority), Mariana Tavares de Araujo (SDE, Brazil), and Donald Klawiter (Sheppard Mullin). The comments are interesting and agree and disagree with a variety of features of the Ginsburg & Wright proposal for even further (but not completely) shifting the focus of antitrust sanctions from the corporation toward responsible individuals, and adding debarment to the cartel enforcement toolkit.
The entire issue can be downloaded here, and also features an excellent symposium on cartel sanctions.
Here is our abstract:
In this article, we first discuss traditional deterrence theory as applied to optimal criminal antitrust penalties. Then we evaluate both the U.S. and EU experience with ever-increasing corporate fines and the available empirical evidence on the deterrent value of cartel sanctions. In the next part we turn to our claim that the conventional wisdom of ever-increasing corporate fines to solve the problem of under-deterrence is misguided. The determination of the optimal sanction for price-fixing should be guided by two principles: (1) the total sanction must be great enough, but no greater than necessary, to take the profit out of price-fixing; and (2) the individuals responsible for the price-fixing should be given a sufficient disincentive to discourage them from engaging in the activity. We propose altering the distribution of criminal sanctions for corporations and the individuals who fix prices on their behalf, and introducing sanctions for negligent officers and directors consistent with our two fundamental principles. Finally, we discuss the experience with debarment as a sanction in other contexts, and how it might operate in the context of U.S. antitrust enforcement.