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Dawn Raids and Their Effect on the Stock Market Journal Artikel

Seppe Maes, Caroline Buts, Marc Jegers

European Competition and Regulatory Law Review, Jahrgang 7 (2023), Ausgabe 3, Seite 145 - 153

Cartel investigations and subsequent Commission decisions can negatively impact a company’s reputation and stock market value. Using an event study methodology, this paper quantifies the effect of a Commission decision on the market value of companies involved and investigates whether the fact that a dawn raid took place has an additional effect on the impact of the subsequent decision. The findings are based on an exhaustive recent sample of 373 observations of listed firms involved in cartel cases between 2001 and 2022. We conclude that a dawn raid has a clear negative effect of -2.04% on a firm’s stock price in the anticipation period prior to a decision. We attribute this to the fact that a dawn raid generates media coverage, bringing more attention to the case and making it widely known to investors. An anticipation effect is absent in cartels where no dawn raid took place, suggesting that a dawn raid entails a more prolonged and more negative effect on stock prices. Keywords: antitrust; cartel; dawn raid; European Commission; event study



Determining the End of an Infringement of Article 101(1) TFEU in Bid-Rigging Cartel Cases (C-450/19 Kilpailu- ja kuluttajavirasto) Journal Artikel

Justin Lindeboom

European Competition and Regulatory Law Review, Jahrgang 6 (2022), Ausgabe 1, Seite 92 - 97

Case C-450/19 Kilpailu- ja kuluttajavirasto, Judgment of the Court of Justice (Second Chamber) of 14 January 2021 The Court of Justice held that a bid-rigging cartel ceases to infringe Article 101(1) TFEU once the contracting authority and the undertaking that was involved in the cartel and that subsequently won the contract sign that contract. Once the essential characteristics of the relevant contract and, in particular, the total price to be paid for the work, have been definitively determined, the bid-rigging cartel ceases to infringe Article 101(1) TFEU because the contracting authority is no longer able to obtain the goods, works or services in question under normal market conditions.


Bpost and Nordzucker AG: The End of Competition Law Enforcement Exceptionalism Concerning the Principle of Ne bis In Idem Journal Artikel

Francesco Rizzuto

European Competition and Regulatory Law Review, Jahrgang 6 (2022), Ausgabe 2, Seite 154 - 166

Case C-117/20 bpost SA and Case C-151/20 Nordzucker AG, Zudzucker AG, Agrana Zucker GmbH, Judgments of the Court of Justice (Grand Chamber) of 22 March 2022 The Court of Justice of the European Union in two Grand Chamber rulings has overturned its established case law on the conditions that must be satisfied in order for the protection against double jeopardy provided by Article 50 of the EU Charter of Fundamental rights to be applicable. The controversial and doctrinally weak third condition concerning the identity of the legal interest , in addition to the identity of the facts and persons, has now been abandoned. It has been replaced by the legal exception rule provided for in Article 52 of the Charter. In essence, this means that the double jeopardy rule will not be infringed by enforcers of EU Competition Law in parallel or subsequent enforcement proceedings including complementary proceedings and penalties based on distinct legal grounds as long as the requirements of Article 52, as clarified by the Court are respected. The rulings thus ends EU Competition law enforcement exceptionalism compared two other areas of EU law regarding the conditions that must be met in order for the protection against ‘criminal’ proceedings and penalties to be satisfied.


Multi-Jurisdictional Leniency Applications and the Deterring Effect on Leniency Journal Artikel

Ruben Korsten

European Competition and Regulatory Law Review, Jahrgang 6 (2022), Ausgabe 3, Seite 195 - 206

Since pioneering work of Choi Gerlach in 2012, not much game theoretical literature has followed to address issues of global cartel formation and international antitrust enforcement. This article addresses this gap, especially with regards to multi-jurisdictional leniency applications. It is found that multi-jurisdictional leniency applications expose international cartel leniency applicants to various risks and have high transaction costs. Therefore, the effectiveness of domestic programmes depends on the possibility of obtaining leniency in other jurisdictions. If an applicant can simultaneously count with leniency in all relevant jurisdictions, the attractiveness of leniency should increase, as the overall benefits for the applicant will be greater. However, if applying for leniency leads to leniency in some jurisdictions but certain penalties in others, this will disincentivise the use of leniency, which would make international cartels more stable. This article thus demonstrates the need for international cooperation in order for leniency policies to be effective. Keywords: antitrust enforcement; cartels; information sharing; international cooperation; leniency


Antitrust Decisions as a Sledgehammer? Journal Artikel

A Descriptive Study on the Impact of Cartel Investigations on Stock Prices

Seppe Maes, Caroline Buts

European Competition and Regulatory Law Review, Jahrgang 6 (2022), Ausgabe 2, Seite 108 - 119

Companies under investigation for anticompetitive behaviour in breach of the competition rules face heavy fines, high legal costs, loss of future profits and reputational damage. In addition, listed companies also seem to (temporarily) experience negative shocks in their stock market value. This article provides a descriptive analysis of the impact of the European Commission’s press release, announcing an antitrust investigation, on the stock market performance of the companies involved. Furthermore, we discuss the influence of the press release covering the Commission’s decision and accompanying fine. Reviewing four cases for each of these two moments, we conclude that an antitrust investigation or fine can be linked to a substantial negative shock to the stock market value of the companies concerned. While the drop is sizeable and thus clearly visible for almost all companies, the effect also seems to be relatively short-lived. Interestingly, the effects mostly seem more pronounced for the announcement of the investigation than for the fine, with some cases barely showing an effect of the latter. This could indicate that the stock market already accounts for the full effects around the time of the initial announcement. Keywords: antitrust; cartel investigation; impact assessment; stock market performance




Parallel Enforcement of Global Cartels: Journal Artikel

Facts and Figures

Pieter J.F. Huizing

European Competition and Regulatory Law Review, Jahrgang 4 (2020), Ausgabe 2, Seite 96 - 107

The history of active enforcement of cartels having a worldwide scope does not go back much further than twenty-five years. But a remarkable development has taken place within this relatively short timeframe. This article aims to provide quantitative insight into the changing nature of global cartel enforcement. It identifies 41 global cartels which were subject to corporate fines and which were discovered between 1990 and 2018. An analysis of the sanctioning of these cartels shows that more and more authorities are pursuing global cartels, often in parallel. The Auto parts, Maritime car carriers and Air cargo cartels for example were each subject to fines in ten or more different jurisdictions. The proliferation of authorities pursuing global cartels has contributed to the dramatic rise of the overall level of fines imposed for global cartel conduct. There are now nine global cartels for which penalties exceeding $1 billion have been imposed. In view of the increasingly crowded enforcement community, one would expect to see greater levels of inter-agency coordination in respect of not just the investigation but also the punishment of global cartels. However, attempts to coordinate the outcome of proceedings in order to reach an overall proportionate fine still appear to be both ad hoc and rare. Keywords: global cartels; international cartel enforcement; cartel fines; parallel enforcement; inter-agency coordination