Fines and reputational sanctions: The case of cartels

Mariuzzo, Franco; Ormosi, Peter L.; Majied, Zherou

doi:10.1016/j.ijindorg.2020.102584

Cited by 12 publications

(5 citation statements)

References 52 publications

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“…(2017) and Mariuzzo et al. (2020) addressed the issue of reputational responsibility associated with the criminalization of anticompetitive behavior and they found a negative impact on the market price of penalized banks. They concluded that reputational losses are nearly nine times the size of fines and are associated with misconduct harming customers or investors, but not third parties.…”

Section: Resultsmentioning

confidence: 99%

Mapping research on corporate misconduct in banking: Lessons from literature on preventive and punitive actions

Rodríguez‐Arrojo,

Luna,

Vázquez‐Ordás

et al. 2024

Global Policy

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Advanced societies are increasingly concerned about corporate misconduct. Citizens are more willing to penalize it, and regulators are punishing companies more significantly than ever before. In particular, while reputation is a key asset for any business, corporate conduct has proven to be especially relevant in the banking industry. The present paper explores the main research efforts carried out on this topic, aiming to learn lessons from a comparison of studies focused on preventive and punitive actions. To accomplish this, we selected relevant corporate misconduct papers from the Web of Science, conducted a comprehensive bibliometric analysis to understand the role of banking industry‐oriented research, and finally, performed a systematic review to distinguish between articles addressing impact measurement and those focusing on prevention. The results allowed us to respond to the unanswered questions regarding the particularities of the banking industry that make it require further and independent analysis and to the debate about whether the current regulation led to certain unwanted effects. Among those many lessons, one is strikingly important as most studies coincide in the conclusion that, instead of the current actions, more effort should be put into efficient prevention methods, such as education for more ethical corporate and individual behavior.

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Section: Resultsmentioning

confidence: 99%

Mapping research on corporate misconduct in banking: Lessons from literature on preventive and punitive actions

Rodríguez‐Arrojo,

Luna,

Vázquez‐Ordás

et al. 2024

Global Policy

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“…Most of the loss was due to the foregone profits from the "early" cessation of the firms' illegal activities. Mariuzzo, Ormosi, and Majied's 88 econometric study of 339 listed firms prosecuted by the Commission between 1992 and 2015 found that the Commission's enforcement actions depressed their share price by on average 2.1 percent with a positive effect on some share prices and substantially negative for others up to 17.9 percent. 89 These findings are consistent with earlier studies of national 90 and Commission cartel fines.…”

Section: E the Efficacy Of Finesmentioning

confidence: 99%

An Empirical Assessment of the European Commission’s Cartel Prosecutions, 2010–2019

Veljanovski

2023

The Antitrust Bulletin

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This is a quantitative analysis of the European Commission’s cartel decisions in the 2010–2019 decade. It assesses the way the Commission’s 2006 guidelines on fines were applied in practice and the operation of the leniency and settlement procedures. It also provides an overview of the types of cartels prosecuted, how they were detected, and how long the Commission took to investigate a cartel. It looks at rends in the Commission’s enforcement activity and assesses some frequently made claims such as whether recidivism is rife; whether the Commission’s leniency program is excessively generous and disproportionately benefits larger, more culpable firms; how much the settlements procedure reduces the length of the Commission’s investigations; and why the Commission takes so long to conclude its investigations.

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“…After the investigation, the Commision decides whether to conduct an in-depth investigation. This is the first point at which the factor of the investigation is publically announced (Mariuzzo, 2020). Furthermore, in Indonesia, this principle body is carried out by Bussiness Competition Supervisory Comission or KPPU.…”

Section: Literature Reviewmentioning

confidence: 99%

Optimal deterrence: Exploring business cartels in Indonesia and their impact on the economy

Asri

Murjiyanto

Hertanto

et al. 2020

Problems and Perspectives in Management

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A business cartel is a business that is carried out by business actors to obtain market power by regulating the market by fixing prices, for example, by limiting the availability of commodities on the market. This paper examines in detail business cartel practices in Indonesia, explores their impact on the economy, and analyzes KPPU as an unfair business eradication body. In so doing, this paper analyzes eight business cases in Indonesia to describe and evaluate the practices of economic cartels in the industry. Those cases were randomly chosen for different periods and different industrial sectors. Using a qualitative analysis method, it is found that business cartels, unfortunately, are still rather common practice in Indonesia. It is also found that business cartels harm economic development, citizens and customers, since they tend to be monopolistic practices so that the customers will have to pay high prices for limited commodities. In addition, KPPU needs to be reformed, and the amendment of current antitrust law also needs to be executed. Consequently, judges and lawmakers should understand the balance of business interest and public interest at the same time.

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Fines and reputational sanctions: The case of cartels

Cited by 12 publications

References 52 publications

Mapping research on corporate misconduct in banking: Lessons from literature on preventive and punitive actions

Mapping research on corporate misconduct in banking: Lessons from literature on preventive and punitive actions

An Empirical Assessment of the European Commission’s Cartel Prosecutions, 2010–2019

Optimal deterrence: Exploring business cartels in Indonesia and their impact on the economy

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