What is the relationship between corruption and violations of competition law? To what extent are anti-competitive agreements (including sharing the market through tender procedures), abuse of dominant position and abuse of state aid related to corruption? What are the corruption risks in competition practices/policies and how to address/mitigate? Please also provide a list of further reading material and standards/best practices on this matter.
PURPOSE
To better understand the linkages between corruption and violations of competition law.
CONTENT
Corruption and competition: the linkages
Mitigating corruption risks in competition practices and policies
Further reading
References
SUMMARY
Although distinct, there is a broad consensus and empirical evidence that competition and anti-corruption are closely intertwined, with corruption inversely related to levels of competition. Anti-competitive business conducts frequently occur in tandem with corruption, which can also facilitate firms’ collusive behaviours. This intersection between anti-competitive practices and corruption is particularly evident in the field of public procurement.
The literature recommends a coordinated enforcement approach to corruption and competition laws, implying increased cooperation between anti-corruption and competition authorities. While collusion and corruption are generally pursued under distinct but compatible legal frameworks, there is a need to balance competing requirements of collusion and corruption prevention.
Similar to anti-corruption, enforcement tools at the disposal of competition agencies include a mixture of carrots and sticks, such as dissuasive civil and criminal sanctions, leniency programmes for early defectors, effective monitoring, complaints mechanisms and whistleblowing protection. Naming and shaming approaches, including ethical blacklisting of companies violating competition and anti-corruption laws, is also being envisaged by some countries.