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Title:Preventing innovative cooperations: The legal exemptions unintended side effect PDF Logo
Authors:Growitsch, Christian
Nulsch, Nicole
Rammerstorfer, Margarethe
Issue Date:2008
Series/Report no.:IWH-Diskussionspapiere 2008,6
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.
Subjects:Competition policy
competition law enforcement
legal exemption system
JEL:K42
L40
Persistent Identifier of the first edition:urn:nbn:de:gbv:3:2-7310
Document Type:Working Paper
Appears in Collections:IWH-Diskussionspapiere, Institut für Wirtschaftsforschung Halle (IWH)
Publikationen von Forscherinnen und Forschern des IWH

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