Benefit of anti -competitive conduct - luke wainscoat - 31 august 2019
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Estimating the benefit of anti-
competitive conduct
How the maximum penalty for anti-
competitive conduct could be calculated
Dr Luke Wainscoat
31 August 2019
Competition and Consumer Workshop, Melbourne
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The maximum penalty
2
3x benefit
$10 million
vs
10% of turnover
$10 million
vs
But, if benefit cannot be determined:
If benefit can be determined:
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Maximum penalties have almost always been set
by reference to turnover
3
Law
implemented
2006 2019
Visa
Colgate-
Palmolive
Yazaki
NYK
Flight
Centre
Mitsubishi
Electric
ANZ
Renegade
Gas
K-Line
2013
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What’s the problem with using turnover?
• Law states that benefit should be used when it can be
determined
• Turnover may lead to sub-optimal deterrence
› Penalty can be too low for single-product firm
› Penalty can be too high for large firm with many products
4
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Techniques are available to estimate benefits
• Various techniques for estimating the additional profit
gained from anti-competitive conduct
• Key is to estimate the price that would have occurred in
the absence of the conduct
7
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Conclusion
• Benefits have almost never been used to calculate the
maximum penalty
• Benefits can be calculated, and I expect this will be
attempted in the near future
18
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