sanctions in anti-trust cases – prof. john m. connor – purdue university, us – november 2016...
TRANSCRIPT
OECD’s 15th Global Forum on Competition: International
Cartels, 1990-2016
John M. Connor, Professor Emeritus, Purdue University
Paris, December 2, 2016
1. Cumulative Corporate Penalties, Regions or Jurisdictions, Semi-Decades
0.0
20.0
40.0
60.0
80.0
100.0
120.0
1990-94 1995-99 2000-04 2005-09 2010-15
ROW
EU NCAs
EC
USA &Canada
Total $107 billion
August 2016 2
2. Trend in Cumulative Penalties Projected to Reach $280 billion by 2022
R² = 0.9997
0.0
50.0
100.0
150.0
200.0
250.0
300.0
1995.0 2000.0 2005.0 2010.0 2015.0 2020.0
Mar 5, 2016 3 J M Connor, Purdue U.
3. Intl. Cartel Fines Imposed by NCAs (EU’s National Authorities) 1989-July 2016
0.0
1.0
2.0
3.0
4.0
5.0
1989 1992 1995 1998 2001 2004 2007 2010 2013 2016
Total $23.5 billion
Year of Decision
August 2016 4 J M Connor, Purdue U.
$ b
illio
ns
4. Total Fines in ROW Exploding
0.0
2.0
4.0
6.0
8.0
10.0
12.0
1990-1994 1995-1999 2000-2004 2005-2009 2010-2016
0.003 0.065
Year Cartel Penalized August 2016 5
$ b
illio
n
Total $17.5 billion
5. Number of Antitrust Jurisdictions Prosecuting International Cartels Is Climbing
0
10
20
30
40
50
60
70
1990 1995 2000 2005 2010 2015
Nu
mb
er o
f Ju
risd
icti
on
s
Year cartel was investigated August 2016 6 J M Connor, Purdue U.
6. Corporate Penalties Are Mostly Imposed on EU & U.S. Companies
0.4
2.1
0.7
1.4
26.3
48.5
71.1
Oceana
Lat. America
Other Europe
Africa
Asia
US & Canada
W. Europe
$ Billion
Location of headquarters of company or its ultimate parent group.
Mar 5, 2016 7 J M Connor, Purdue U.
7. Disposition of Executives Charged for International Price-Fixing
0 50 100 150 200 250 300
Other
Banned or Barred
Acquitted,…
Fugitives
Indicted, waiting
Guilty, waiting
Prison only
Fined only
Fined & Prison
August 2016 8 J M Connor, Purdue U.
8. Trend in U.S. Private Recoveries
R² = 0.3285
0
2
4
6
8
10
12
14
16
18
1990 1995 2000 2005 2010 2015 2020
2016-2020 Projected
Year First Company Settles (Zero Years Omitted)
Mar 5, 2016 J M Connor, Purdue U. 9
9. Mean Severity of Penalties on 662 International Cartels, 1990-2015
12
30
16 15 14 16
10
21
0
5
10
15
20
25
30
35
EC EU NCAs US Canada OtherNations
Private,No. Am.
Private,World
World
Pen
alti
es/A
ffec
ted
Sal
es (
%)
August 2016 10
10. U.S. Damages, Penalties, and the Optimal Penalty: The Lysine Cartel
0
100
200
300
400
500$2010 Million
Mar 5, 2016 11
Note: Optimal penalty assumes 30% detection, 80% conviction probability.
12. Why Over-Deterrence is Rare
• Attorney anecdotes do not give numbers
• Serial collusion and recidivism is high.
• Affected commerce is typically too low.
• Prejudgment interest is rarely rewarded, which longevity, slow decisions exacerbate.
• No compensation for dead-weight losses
• Anecdotes are ex post: fail to consider low probabilities of detection and conviction