Why do we view breaches of competition law and anti-corruption law so differently?
Tuesday, September 13, 2016 at 8:28AM
Gönenç Gürkaynak, Ç. Olgu Kama and Burcu Ergün in antitrust

Both anti-corruption law and competition law aim to create a level playing field and are complementary to each other in support of this aim. It's interesting, then, to see how society reacts so differently to breaches in these fields, even though both are indispensable in reaching social welfare.

Corrupt behavior will raise more reaction than a breach of competition law. Often, reaction to corruption will be a moral one while competition law breaches are regarded as an issue to enforce fines and move on. The lack of moral reaction may be resulting from the indirect, less visible, less immediate nature of the effects of anti-competitive behavior on consumers.

Here are the reasons we think the societal reaction to breaches in these two fields differs:

Corruption and anti-competitive behavior have different consequences. Competition law aims to maintain social welfare through economic efficiency and enable the consumers to access wide range of products at lower prices and with higher quality. The consequences of competition law breaches are economic and are usually evaluated under administrative law.

On the contrary, consequences of corrupt behavior are more various. Besides the economic consequences, corrupt behavior may lead to governance, democracy, poverty and inequality consequences.

Social and political consequences of competition law breaches are less visible to the end consumer and the damage is less likely to be calculable compared to the effects of corruption.

As corruption is subject to criminal enforcement while anti-competitive behavior is generally subject to administrative enforcement, leading to differing moral perceptions. As mentioned above, in many jurisdictions competition law violations are mainly evaluated under the realm of administrative law and rarely criminal law.

Corruption crimes, on the other hand, are almost always dealt with under criminal law. Most corruption crimes are sanctioned by imprisonment. This carries with it a strong moral message.

In the competition law realm, only a few countries’ legal systems allow for imprisonment. We believe being dealt with under administrative law and criminal law is one of the factors that set the tone for societal perceptions.

The impact of corruption is dramatic, while the impact of anti-competitive behavior may not be directly visible to the individuals. Every day, individuals anywhere might encounter corruption when being stopped by police or when obtaining licenses to operate a legitimate business.

The impact of anti-competitive behavior is less distinguishable, even the largest consequences might occur at the macro level and are usually intangible to individuals. Difficulties in quantifying the damages arising from anti-competitive behavior aside, litigating claims by the end consumer is also difficult since the damage is usually indistinguishable in every-day life.

Although the purpose of both anti-corruption law and competition law is the creation of a level playing field, society cheers the efforts against corruption but is generally apathetic to the efforts against competition law offenses.

We believe this is due to the dramatic, sharp and wide ranging effects of corruption, as well as its criminal nature, while the consequences of competition law are less visible, more confined to the economic sphere and dealt with under administrative law sphere.

Our full article is available here.

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Gönenç Gürkaynak is the Managing Partner of ELIG, Attorneys-at-Law, based in Istanbul, Turkey. He's a member of the New York Bar, the Brussels Bar, the Istanbul Bar, and the Law Society of England & Wales. He holds an LLM from Harvard Law School and an LLB from Ankara University School of Law. He can be contacted at gonenc.gurkaynak@elig.com

Ç. Olgu Kama is a Partner at ELIG handling white-collar criminal cases, corporate compliance, anti-corruption, and commercial law. She holds LLM degrees from Fordham Law School and Galatasaray University and an LLB from Istanbul Bilgi University School of Law. She can be contacted at olgu.kama@elig.com

Burcu Ergün is an Associate at ELIG.

The authors thank Ceren Özkanlı, a Senior Associate at ELIG, for her contributions to this post.

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
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