The impact of the 2002 reform of the EU leniency program on cartel outcomes

The objective of this study is to empirically assess whether the 2002 reform of the EU leniency program, which brought the EU leniency policy much closer to the US policy, has increased the European Commission's capability to destabilize cartels while making prosecution more efficient. More specifically, relying on a difference-in-difference approach, we estimate the impact of the 2002 reform on cartel duration, fines before and after applying leniency reductions and duration of investigation. We find that the 2002 reform decreased cartel duration by about 87 percent, but did not significantly affect the other outcome variables. Thus, our findings seem to suggest that the 2002 reform has improved the cartel-destabilizing effect of the EU leniency program, without enhancing however its effectiveness in prosecuting cartels. (C) 2020 Elsevier B.V. All rights reserved.