New article: “Optimal Enforcement of Competition Policy: The Commitments Procedure Under Uncertainty”

Abstract :

Since the introduction of a formal commitments procedure in EU antitrust policy (Article 9 of Council Regulation 1/2003), the European Commission has extensively settled cases of alleged anticompetitive practices.

In this paper, we use a formal model of law enforcement (Bebchuk, 1984; Shavell, 1988) to identify the optimal procedure to resolve cases in a context of uncertainty related to the law (L-uncertainty) and to the facts (F-uncertainty).

We show that commitments are suboptimal when there L-uncertainty is important. Furthermore, the generalized use of commitments creates an additional risk of under-enforcement when F-uncertainty is significant.

Authors: Axel Gautier, Nicolas Petit