Antitrust Enforcement and Economic Efficiency: The Uneasy Case for Treble Damages

Breit, William; Elzinga, Kenneth G.

doi:10.1086/466795

Cited by 21 publications

(8 citation statements)

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“…It is widely recognized in the antitrust literature that treble damages can create perverse incentives for private enforcers. Breit and Elzinga [1974] have argued that under a multiple damages remedy, private parties may even seek to increase the damage they suffer in anticipation that they may be multiply rewarded for the resulting increase in damages 3 . Multiple damages may, for that reason, induce plaintiffs to ‘get damaged.’ In addition, hostile takeover targets often initiate antitrust cases against the bidders, because this may create long delays and therefore allow the target firm to achieve some anti‐takeover strategies.…”

Section: Review Of the Literaturementioning

confidence: 99%

PRIVATE ANTITRUST ENFORCEMENT IN THE PRESENCE OF PRE‐TRIAL BARGAINING^*

Bourjade¹,

Rey²,

Seabright³

2009

The J Industrial Economics

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We study the effect of encouraging private actions for breaches of competition law. We develop a model of litigation and settlement with asymmetric information. We show that screening liable from non-liable defendants requires the Court to restrict the rules governing admissible evidence. We study how to design the rules so as to enhance the role of private litigation in antitrust enforcement and prove that increasing damages is better than reducing costs of initiating suits. We also find large benefits from introducing a system of compensation for defendants found non-liable, paid by unsuccessful plaintiffs.

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Section: Review Of the Literaturementioning

confidence: 99%

PRIVATE ANTITRUST ENFORCEMENT IN THE PRESENCE OF PRE‐TRIAL BARGAINING^*

Bourjade¹,

Rey²,

Seabright³

2009

The J Industrial Economics

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“…Ultimately, it is for the regulator to determine the level of optimal punishment, not for courts in tort proceedings. 208 The basic premise is that the lower the chance of detecting and punishing misbehaviour the higher the penalty must be, if the offence is to be prevented and sanctioned effectively. 209 In principle, optimal deterrence can be attained if the wrongdoer internalises ex ante the social costs of the infringement less the likelihood of being punished.…”

Section: Beyond Compensationmentioning

confidence: 99%

Defining the Competition Torts as Intentional Wrongs

Banfi

2011

C.L.J.

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Breaches of EC and UK competition laws (mainly anticompetitive agreements or concerted practices 1 and the abuse of market power) 2 are punishable by the competition authorities. 3 Individuals, who have suffered loss, particularly trade rivals, can claim damages flowing from antitrust practices, inter alia, through the "statutory competition torts". These torts do not seem to require the claimant to prove that the defendant intended to harm her whereas another potential route for claimants, the common-law economic torts, do. This fact may partly explain why commentators have paid little attention to the mental element in antitrust tort liability. This article argues that the competition torts trigger strict liability for the harm caused to victims but, like the economic torts, presuppose intentional conduct. Competition statutes can only be breached through deliberate acts which, although aimed at indeterminate consumers, often involve the agent's intention to injure identifiable adversaries. Thus, the competition torts neither entail absolute strict liability (i.e., for merely causing damage) nor are based on negligently occasioned harm. The problem can be stated simply. Business competitors owe no duty not to injure each other negligently or intentionally, but they are at liberty to defeat one another as a foreseeable and inexorable side-effect of legitimate commercial battle. However, trade opponents are constrained by the economic or competition torts. These will ordinarily prohibit wrongful means on the one hand and, on the other, acts accompanied by specific forms of intention, e.g., to cause the breach of the claimant's contract in inducing breach of contract, 4 or to harm the claimant in her trade interests, a requirement found in the

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“…Moreover the concerns raised about the perverse incentives for private plaintiffs that treble damages provide have not been supported by subsequent research. In response to Breit andElzinga (1974, 1985), Besanko and Spulber (1990) developed a game-theoretic model that demonstrates that under a couple of reasonable assumptions 15 the perverse incentives disappear and multiple damages result in welfare improvements. The EC's cartel decisions are explicit in mentioning deterrence as the main objective 16 of its determination of fine levels.…”

Section: Antementioning

confidence: 99%

“…Legal scholars often prefer that the maximization of consumer welfare be the sole goal of antitrust laws because of the messiness that attends dealing with multiple policy goals (Hovenkamp 1999:70-76). At worst, Breit and Elzinga (1974) present scenarios in which treble damages could promote frivolous law suits or other inefficient or perverse behavior by plaintiffs. Finally, Chicagoans take the view that if altering the distribution of wealth is a social goal, tax or other policies are instruments superior to compensatory suits.…”

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confidence: 99%

Optimal Deterrence and Private International Cartels

Connor

2006

SSRN Journal

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Antitrust Enforcement and Economic Efficiency: The Uneasy Case for Treble Damages

Cited by 21 publications

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PRIVATE ANTITRUST ENFORCEMENT IN THE PRESENCE OF PRE‐TRIAL BARGAINING^*

PRIVATE ANTITRUST ENFORCEMENT IN THE PRESENCE OF PRE‐TRIAL BARGAINING^*

Defining the Competition Torts as Intentional Wrongs

Optimal Deterrence and Private International Cartels

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Antitrust Enforcement and Economic Efficiency: The Uneasy Case for Treble Damages

Cited by 21 publications

References 0 publications

PRIVATE ANTITRUST ENFORCEMENT IN THE PRESENCE OF PRE‐TRIAL BARGAINING*

PRIVATE ANTITRUST ENFORCEMENT IN THE PRESENCE OF PRE‐TRIAL BARGAINING*

Defining the Competition Torts as Intentional Wrongs

Optimal Deterrence and Private International Cartels

Contact Info

Product

Resources

About

PRIVATE ANTITRUST ENFORCEMENT IN THE PRESENCE OF PRE‐TRIAL BARGAINING^*

PRIVATE ANTITRUST ENFORCEMENT IN THE PRESENCE OF PRE‐TRIAL BARGAINING^*