Preventing Innovative Cooperations: The Legal Exemptions Unintended Side Effect
Christian Growitsch, Nicole Nulsch, Margarethe Rammerstorfer
European Journal of Law and Economics,
Nr. 1,
2012
Abstract
In 2004, European competition law had been considerable changed by the introduction of the new Council Regulation No. 1/2003. One of the major renewals was the replacement of the centralized notification system for inter-company cooperations in favor of a so-called legal exemption system. We analyze the implications of this reform and its arising uncertainty on the agreements firms implement, especially on innovative agreements like vertical R&D agreements. By means of a decision theoretic approach, we show that the law’s intention to reduce the incentive to establish illegal cartels will be reached but innovating cooperations might be prevented. To avoid this unintended side effect, fines but not the monitoring activities should be increased.
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Preventing Innovative Cooperations: The Legal Exemptions Unintended Side Effect
Christian Growitsch, Nicole Nulsch, Margarethe Rammerstorfer
IWH Discussion Papers,
Nr. 6,
2008
Abstract
In 2004, European competition law had been faced with considerable changes due to the introduction of the new Council Regulation No. 1/2003. One of the major renewals was the replacement of the centralized notification system for inter-company cooperations in favor of a so-called legal exemption system. We analyze the implications of this reform on the agreements firms implement. In contrast to previous research we focus on the reform’s impact on especially welfare enhancing, namely innovative agreements. We show that the law’s intention to reduce the incentive to establish illegal cartels will be reached. However, by the same mechanism, also highly innovative cooperations might be prevented. To avoid this unintended effect, we conclude that only fines but not the monitoring activities should be increased in order to deter illegal but not innovative agreements.
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Effectiveness of Competition Law: A Panel Data Analysis
Franz Kronthaler
IWH Discussion Papers,
Nr. 7,
2007
Abstract
The paper explores what macroeconomic factors can tell us about the effectiveness of recently enacted national competition laws. Qualitative evidence suggests that numerous countries fall short in implementing competition law. Furthermore, there seems to be significant differences between countries. To examine what factors might contribute to the explanation of effectiveness of competition law panel regression analysis is used. The results indicate that the level of economic development matters, however the institutional learning curve is also relevant. Furthermore, larger countries should be more concerned with competition advocacy activities than smaller countries and it seems to be the case that the problem of capture of competition law is serious in countries with high levels of corruption.
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Progressivity and Flexibility in Developing an Effective Competition Regime: Using Experiences of Poland, Ukraine, and South Africa for developing countries
Franz Kronthaler, Johannes Stephan
IWH Discussion Papers,
Nr. 6,
2006
Abstract
The paper discusses the role of the concept of special and differential treatment in the framework of regional trade agreements for the development of a competition regime. After a discussion of the main characteristics and possible shortfalls of those concepts, three case countries are assessed in terms of their experience with progressivity, flexibility, and technical and financial assistance: Poland was led to align its competition laws to match the model of the EU. The Ukraine opted voluntarily for the European model, this despite its intense integration mainly with Russia. South Africa, a developing country that emerged from a highly segregated social fabric and an economy dominated by large conglomerates with concentrated ownership. All three countries enacted (or comprehensively reformed) their competition laws in an attempt to face the challenges of economic integration and catch up development on the one hand and particular social problems on the other. Hence, their experience may be pivotal for a variety of different developing countries who are in negotiations to include competition issues in regional trade agreements. The results suggest that the design of such competition issues have to reflect country-particularities to achieve an efficient competition regime.
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