Penalties for anti-competitive agreements: psychological aspects

Abstract

The article looks at the importance of hindsight bias in the process of the application of law, in particular with regard to provisions on competition in European Union law. The focus is on how such a bias can creep into the way the effects of cooperation between (potential) competitors are assessed. The issue is particularly important in the case of cooperation considered to have as its effect the prevention, restriction or distortion of competition within the internal market (which is prohibited under Article 101(1) of the Treaty on the Functioning of the European Union). Reference is made to the way of preventing the negative effects of the hindsight bias on the judicial process that is advocated in the US scholarly literature. Furthermore, a competitive method to restrain liability for consequences of poor commercial decisions, without direct connection to the concept of cognitive errors, is presented. The author calls into question the application of this method to cases involving cooperation that is harmful to competition.