JLE Publishes Study of EU and US Anticollusion Enforcement by Analysis Group President Pierre Cremieux and Academic Affiliate Edward A. Snyder
July 6, 2017
The University of Chicago's Journal of Law and Economics (JLE) has published “Enforcement of Anticollusion Laws against Domestic and Foreign Firms,” coauthored by Analysis Group President Pierre Cremieux and academic affiliate Edward A. Snyder, the William S. Beinecke Professor of Economics and Management at the Yale School of Management.
The number of antitrust enforcement regimes has grown tremendously over the past 20 years, and individual antitrust authorities must decide with increasing frequency whether it makes political or economic sense to proceed with enforcement actions against foreign firms. To assess whether and how enforcement regimes take into account the national identities of the firms charged with violations of anticollusion laws, Dr. Cremieux and Dr. Snyder analyzed 938 fines imposed by the European Union and the United States over a 21-year period. Their analyses focused on differences in the likelihood of being fined and the size of the fines imposed on firms headquartered in either the EU, the US, or elsewhere, i.e., Rest-of-World (ROW).
Conditional on an enforcement action in one of the jurisdictions and overlapping sales of the relevant product, Dr. Cremieux and Professor Snyder found that both the EU and the US are more likely to impose fines on ROW firms. The US also imposes higher fines on ROW firms. In these respects, their findings support the hypothesis that EU and US enforcement target ROW firms implicated in violations.
By contrast, their nuanced findings concerning how the EU and the US treat firms headquartered in either the EU or US do not support the hypothesis that the two authorities target firms in the other jurisdiction. Dr. Cremieux and Professor Snyder suggest that three factors contribute to neutral enforcement by the EU and the US in this context: (1) the lack of major differences in legal standards in their anticollusion statutes; (2) the history of substantial trade between the two jurisdictions; and (3) the frequency of enforcement actions by each authority against firms in the other jurisdictions. Given that these factors are absent elsewhere, the authors caution against drawing broader inferences about the role of national identities in global antitrust enforcement.