Compensation and deterrence in Antitrust – How realistic is the achievement of an optimal level of deterrence under a private enforcement regime?

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    Abstract

    An effective system of enforcement in the competition field is necessary for two main reasons. First, it provides corrective justice through compensation to victims, i.e. the ‘compensation effect’ and second, it ensures that prohibitions in the law are not violated, i.e. the ‘deterrent effect’. Compensation to victims of antitrust infringements appears to be the first and foremost guiding principle behind the Commission proposals. According to the EU Commission, as by-product deterrence is also increased and, by penalising infringements, an overall compliance with the rules could be achieved. The question is whether it is possible to provide compensation to antitrust victims while achieving an optimal level of deterrence under a private enforcement regime. Under a public enforcement system, it is possible to set a level of punishment that could adequately compensate victims without incentivising a race to damages. As private enforcement is less coordinated, setting an ideal amount of punishment that would compensate victims while delivering an optimal level of deterrence appears to be impossible. This chapter analyses these issues and concludes on the superiority of public enforcement over private enforcement.
    Original languageEnglish
    JournalMountbatten Journal of Legal Studies
    Issue number23
    Publication statusSubmitted - 2020

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