Direct and deterrent effects of competition enforcement

In addition to the direct effects through the remedies imposed, competition law enforcement can also affect the behaviour of firms in adjacent sectors (and more generally) by increasing awareness of competition rules and changing views of the likelihood of anticompetitive behaviour being detected and sanctioned.

We looked at the deterrent effects of specific cases by surveying businesses in adjacent sectors to find out how the enforcement action would affect their behaviour. Our findings indicate that the indirect benefits from deterring anticompetitive behaviour outweigh the direct benefits from the interventions, often by an order of magnitude.

The report is available from the CMA website and can also be downloaded here.