The Effectiveness of Private Enforcement and Class Actions to Secure Antitrust Enforcement

Abstract

The U.S. system has relied heavily on antitrust class actions as a means of ensuring compensation and deterrence. Although this tool seems sensible in theory, the reality is that it remains highly controversial. On the one hand, commentators argue that class actions force defendants to settle cases lacking merit. Even if a settlement agreement is assumed to have a merit, class actions are accused of doing a poor job in compensating victims and deterring wrongdoers. On the other hand, the proponents of class actions claim that there is no reliable empirical evidence proving that class action schemes caused negative effects on antitrust litigation. The public debate about the effectiveness of class actions illustrate the controversial nature of American class actions fairly well. Therefore, using comparative insights from the predominant controversies, this study will determine how well antitrust class actions fulfill compensation objectives and to what extent they can facilitate deterrence.