Fixing the regulatory tension between leniency and damages
28 October 2025
In this article, we look at how to fix the regulatory tension between leniency and damages to strengthen cartel deterrence.
In most jurisdictions, firms receiving immunity from fines are liable for damages. Their liability is generally more limited than that of other cartel participants, in an attempt to preserve incentives to ‘blow the whistle’. For the same reason, many jurisdictions restrict claimants’ access to leniency statements in private damages actions.
We believe that the approach described above raises two key concerns:
First, by limiting the overall pay-off to firms ‘blowing the whistle’, it undermines incentives to self-report, making cartels more stable and likely.
Second, by denying claimants access to vital information in leniency statements, it weakens their ability to litigate effectively against infringers.
These two effects weaken the effectiveness of both leniency and damages policies, unintentionally facilitating collusion and harming consumers. Indeed, some competition authorities have made proposals to improve how leniency and damages complement each other.
We think that there is scope to fix the regulatory tension between leniency and damages, and make them interact more effectively.
We make two recommendations towards achieving this goal:
First, to fully shield immunity recipients from liability for damages. This would strengthen the incentives to self-report and ‘rush to the courthouse’, enhancing the effectiveness of leniency programmes.
Second, to facilitate claimants’ access to leniency statements in follow-on private damages actions. This would help them to sue more effectively and, coupled with our first recommendation, would provide further incentives for cartel infringers to self-report first.