Incentivizing Private Antitrust Enforcement to Promote Leniency Applications: A Case Study of the United Kingdom [Article]

Abstract

Many jurisdictions around the world are promoting private antitrust enforcement. However, currently, the dominant view is that private actions discourage leniency application, an important source for antitrust authorities to detect and combat cartels. Such a view hinders the development of private enforcement. In a separate theoretical work, based on a game theory model created by Professor Joseph E. Harrington, I discovered that private enforcement does not always have a negative impact on leniency application. Further, I argue that, instead, private enforcement, when used “properly,” could serve as a tool to promote leniency application. The current article offers a case study to support the theoretical work. To do so, I studied the 2014 Consumer Rights Bill in the U.K. which partly aimed at promoting private actions. Using Germany as the control group, I have conducted a difference-in-difference analysis and found around a 50% rise in leniency application in the U.K. following the introduction of said bill.