Reflections on Leniency Programs: In Search for Effectiveness

Abstract

Competition law’s main objective is to maximize consumer welfare by ensuring the competitive functioning of the markets. In particular, competition law has to address anticompetitive agreements between competitors or firms at different levels, abusive behaviour of dominant firms, mergers and public restrictions of competition. This paper will focus on hard-core cartels considering that they are the most serious violation of competition law. The instruments used to fight against this anticompetitive behaviour (leniency programs) have resulted to be fairly effective. Many modifications and developments have taken place since the leniency program was first established in the European Union in order to make it an optimal tool to fight hard-core cartels. However, it is submitted that a significant margin of improvement remains for several features of the program. Discussion throughout this paper about the pitfalls of this leniency system will remark the need for further changes enabling these programs to become the ultimate solution against hard-core cartels. The thesis concludes with a study case of the Spanish competition law that will reflect the strengths and weakness of the leniency programs in the practice.