Public v. Private Enforcement: Why Competition Litigation Won’t Solve the Public Enforcement Defecit
The stated goals of private enforcement of competition law (including through collective redress) include deterring infringements, thereby promoting competition. However, the evidence that private enforcement actually deters is sketchy at best. What is clear is that increasing litigation risks greatly decreases infringers’ incentives to cooperate with enforcement authorities, potentially leading to reduced enforcement. Does the risk cancel out the (uncertain) benefit?
The other main goal of private enforcement of competition law is to compensate victims. However, there is plenty to suggest that there are faster, cheaper and less risky ways to achieve this than through litigation, particularly through mass litigation.
So while the new Antitrust Damages Directive and Recommendation on Collective Redress are lauded by the EU and will certainly lead to more competition litigation, will they also lead to more compliance? And are there not more efficient ways to deliver compensation?
Reproduced with permission from Law Business Research Ltd. This article was first published in The Public Competition Enforcement Review - Edition 7 (published in April 2015 – editor Aidan Synnott).