Most countries have competition authorities that enforce competition policy by identifying, stopping and penalising what are regarded as anti-competitive practices. The research of Professor David Ulph, of the School of Economics and Finance, and Professor Yannis Katsoulacos, Athens University of Economics and Business (AUEB) established for the first time the precise conditions under which, generally, an Effects-Based legal standard would be better than a Per Se legal standard in terms of (i) decision error costs and (ii) deterrence effects (2009). This and subsequent research led to their results that: (a) while legal uncertainty may sometimes be an argument for zero penalties, there were other circumstances under which it might lead to higher penalties; (b) timing factors imply that penalties should be lower than previous research suggested. These influenced the penalty policies of competition authorities in two countries: in the UK the Office of Fair Trading (OFT) – now superseded by the Competition & Markets Authority – and in France the Autorité de la Concurrence (AdC). For OFT the research contributed to the formulation of revisions to their published penalty guidelines, and specifically a proposed increase in baseline penalty from 10% to 30% of revenue. For AdC it helped shape the formulation of the penalty guidelines that they published for the first time.
The research was funded by the Economic and Social Research Council (ESRC).