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Lewisch, Peter --- "Enforcement of Antitrust Law: The Way from Criminal Individual Punishment to Semi-Penal Sanctions in Austria" [2006] ELECD 462; in Cseres, J. Katalin; Schinkel, Pieter Maarten; Vogelaar, O.W. Floris (eds), "Criminalization of Competition Law Enforcement" (Edward Elgar Publishing, 2006)

Book Title: Criminalization of Competition Law Enforcement

Editor(s): Cseres, J. Katalin; Schinkel, Pieter Maarten; Vogelaar, O.W. Floris

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781845426088

Section: Chapter 16

Section Title: Enforcement of Antitrust Law: The Way from Criminal Individual Punishment to Semi-Penal Sanctions in Austria

Author(s): Lewisch, Peter

Number of pages: 17

Extract:

16. Enforcement of antitrust law:
the way from criminal individual
punishment to semi-penal
sanctions in Austria
Peter Lewisch

1 INTRODUCTION

This chapter is about the institutional comparison of alternative enforcement
regimes of antitrust law. The chapter analyses the incentives for enforcement
of cartel violations in abstracto in Section 2. It discusses the Austrian case
as an illustration for a replacement of individual criminal sanctions by
`neutral' fines in Section 3, and ends with a normative discussion of the
merits of (re-)criminalization in Section 4.


2 THE ECONOMICS OF ENFORCEMENT OF
ANTITRUST LAW

2.1 The Nature of Cartels

Antitrust enforcement aims at combating cartels. Its scope can, therefore,
best be derived from the underlying incentives to establish and maintain
cartels. A cartel is an arrangement by which its members agree to constrain
supply and thereby to increase prices above their competitive level. Benefits
from such an arrangement focus on the cartel members, while harm is
dispersed among the consumers.1 Despite the existence of these focussed
benefits, cartels are inherently unstable due to their underlying `prisoner's
dilemma structure': For each member of the cartel, defection on the cartel
agreement constitutes the dominant choice (if the others break the cartel, it
is better to violate oneself; if the others respect the agreement, it is better to
be the only cheater). Therefore, cartels are doomed to ultimate breakdown.

290
 Enforcement of antitrust law 291

Still, depending on the market structure, and in particular on the monitoring
and enforcement costs ...