Cartel Laws Undermined: Corruption, Social Norms, and Collectivist Business Cultures

Stephan, Andreas

doi:10.1111/j.1467-6478.2010.00507.x

Cited by 35 publications

(11 citation statements)

References 15 publications

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“…Studies show that low legal consciousness towards competition law causes calculated interaction with leniency. The literature finds a paradox between cartel criminalization – enhanced enforcement, significantly high financial penalties – on the one hand, and fixed collectivistic sentiments and values in business cultures on the other (see Stephan, 2010). Within firms, the topic of competition law and cartel conduct is associated with moral ambiguity (Parker, 2012; Whelan, 2013).…”

Section: Theory: Assumptions Underpinning Leniency Arrangementsmentioning

confidence: 99%

Leniency in exchange for cartel confessions

Jaspers

2019

European Journal of Criminology

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Leniency offers corporations the possibility to come clean about their involvement in cartel conduct (for example, price-fixing, bid-rigging) in exchange for immunity or reduction of financial penalties. In Europe, nearly 60 percent of detected cartels are discovered through leniency. This makes leniency the most applied detection tool for uncovering cartel conduct violations. What are the considerations in applying for leniency or refraining from doing so? How do those considerations relate to private law enforcement through civil liability regarding business cartels? These questions are discussed based on semi-structured interviews ( n = 34) with cartelists, competition lawyers and in-house legal counsel to study theoretical assumptions underpinning leniency arrangements in the Netherlands. This study investigates four scenarios on the use of leniency suggested in the literature and finds empirical support for only two. Strategic use of leniency and false confessions occur in the Netherlands, but to a lesser extent than the existing literature suggests. Moreover, various disincentives, and especially the rise of private enforcement, make leniency an unattractive and uncertain option for cartelists.

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Section: Theory: Assumptions Underpinning Leniency Arrangementsmentioning

confidence: 99%

Leniency in exchange for cartel confessions

Jaspers

2019

European Journal of Criminology

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“…A social approach considers cartels in the context of mutual trust, focusing on the incentives of firms to act cooperatively in the informal setting of cartels. Trust may provide an important element in explaining how firms manage to operate their cartels for long periods (Stephan 2010;Leslie 2004), and better account for some of the recent empirical findings on cartel stability.…”

Section: The Social Perspective: Stability Through Mutual Trustmentioning

confidence: 99%

Managing Cartels: how Cartel Participants Create Stability in the Absence of law

Jaspers

2016

Eur J Crim Policy Res

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Firms enter cartels (e.g. price-fixing; bid-rigging) in order to control market uncertainties and gain collusive profits, but face challenges in controlling the cartel itself. A challenge for business cartels is how to organise collective illegal activities without the use of formal control, such as binding legal contracts or arbitration. While one might expect that a lack of formal legal control leads to mutual conflicts and opportunistic behaviour resulting in short-lived cartels, firms often manage to continue their illegal conduct for years. This raises questions as to how firms organise their cartels in the absence of legal means. This article addresses how informal coordinating mechanisms enable cartel stability outside the scope of formal legal control. Based on an in depth study of 14 Dutch cartels, this article shows the importance of informal social mechanisms to coordinate, monitor, enforce, and compensate for the longevity of business cartels. Furthermore, the results emphasise that in order to explain cartel stability, social mechanisms that induce trust need to be considered.

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“…Indeed, ‘[s]ocial norms opposing cartels have the potential … to complement sanctions and encourage desistence’. A disconnect between morally wrongful behaviour and the content of a cartel offence may therefore increase the probability of a negative outcome, such as nullification or a change of attitudes towards the nature and fairness of the criminal law. In fact, some believe that the success of a project of cartel criminalisation ‘depends on the emergence of a genuine sense of “hard core” delinquency, without which effective regulation by means of criminal law is unlikely to be achieved’.…”

Section: Critically Analysing the Reforms In Section 47 Erramentioning

confidence: 99%

Section 47 of theEnterprise andRegulatoryReformAct 2013: A FlawedReform of theUKCartel Offence

Whelan¹

2015

Modern Law Review

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entered into force, ensuring significant changes to the criminal UK Cartel Offence. That particular criminal offence, contained in section 188 of the Enterprise Act 2002, was enacted in order to secure the deterrence of cartel activity affecting the UK. Following almost ten years of its enforcement, the Cartel Offence had failed to live up to its expectations. Consequently, following a public consultation it was reformed in substance. As a result of section 47 ERRA, the (controversial) definitional element of 'dishonesty' has been removed from the offence, a number of 'carve outs' from the offence have been created, and three additional defences now exist. This article examines in detail the specific reforms of the Cartel Offence and argues that, although considerable improvement has been made, the UK authorities currently have at their disposal a criminal offence that is fundamentally flawed and unworkable in practice. Further reform is therefore advised.

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Cartel Laws Undermined: Corruption, Social Norms, and Collectivist Business Cultures

Cited by 35 publications

References 15 publications

Leniency in exchange for cartel confessions

Leniency in exchange for cartel confessions

Managing Cartels: how Cartel Participants Create Stability in the Absence of law

Section 47 of theEnterprise andRegulatoryReformAct 2013: A FlawedReform of theUKCartel Offence

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