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The Moral Economy of Antitrust Violations

Research project The distinction between legal/illegal and moral/immoral regarding antitrust crimes and how it is perceived by the public, has had an impact on how antitrust crime is assessed in criminal policy and in criminological research.

The starting point is that the boundary between legal/illegal and moral/immoral goes between “male in se” and “mala prohibita”. That is, if the behavior is formally illegal, but the question is how is it morally valued, if it is reprehensible (e.g. rape) or technically prohibited to make the welfare system work (for example, tax crime). In the first case, the behavior is incomprehensible, morally speaking (male in se), while in the second case it can be understandable, morally speaking (mala prohibita). The empirical data is derived from a survey sent to 5,000 randomly selected Swedes.

Head of project

Tage Alalehto
Associate professor
E-mail
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Project overview

Project period:

2018-09-01 2019-12-31

Funding

Konkurrensverket, Umeå University

Participating departments and units at Umeå University

Department of Sociology

Project description

This report examines the distinction between legal/illegal and moral/immoral regarding antitrust crimes and how it is perceived by the public. In addition, we examine how the public views the sanction system's severity (too strict-too weak) and efficiency (effective-ineffective). The antitrust crime referred to is horizontal cartels. The starting point is that the boundary between legal/illegal and moral/immoral goes between “male in se” and “mala prohibita”. That is, if the behavior is formally illegal, but the question is how is it morally valued, if it is reprehensible (e.g. rape) or technically prohibited to make the welfare system work (for example, tax crime). In the first case, the behavior is incomprehensible, morally speaking (male in se), while in the second case it can be understandable, morally speaking (mala prohibita). This boundary line has had an impact on how antitrust crime is assessed in criminal policy and in criminological research.

The literature review points out that this issue can be viewed from a political perspective. Researchers with a left-wing perspective views antitrust crime as a “male in se” because it allegedly drains the welfare resources for the working class and the unpropertied. An argument that conservative-oriented researchers principally share in that the cartel is a norm violation of the established tradition of free competition between companies and a violation of natural persons (consumer, entrepreneur, government person etc.) efforts to live up to existing regulation , e.g. competition law. On the other hand, we have liberal-minded researchers that argues for a softer form of “male prohibita”. In order to defend the market freedom of choice, legislation is not the preferred choice of action, instead they argue that cooperation and information exchange have a self-regulating effect and will prevent antitrust crimes.

Based on a literature review on antitrust crime, four hypotheses has derived:

  • The public has very little own experience of antitrust crime, as opposed to low-profile white collar crimes such as fraud, embezzlement, tax crime. The public gets information about antitrust crime through the media.
  • The public will perceive antitrust crime as dishonest and harmful behavior, but far from always a criminal behavior. In some circumstances also as a morally worthy behavior, even though it is in principle illegal.
  • The public will perceive antitrust crime as something that should be punished with “shame” such as public publishing of names and companies or administratively imposed fines that exceed the person/company gain from the criminal behavior.
  • The negotiating principle where one of the antitrust players cooperates with the authority (concession program) in order to avoid punishment, will receive low support from the public (below 20 percent).

The empirical data within this study is derived from a survey sent to 5,000 randomly selected Swedes in the spring of 2019. A total of 1,857 individuals responded to the survey, which gives a response rate of 37 percent.

The results show that 80 percent perceive antitrust crime as illegal, while 20 percent do not. Adding to this the question of whether it can be considered morally deserving (defensible) to commit antitrust crime at some time, 37 percent of those who considered that antitrust crime was illegal believe it can be morally deserving. Within this group, that comprises of 57 percent (20 percent think it is legal and 37 percent that it is morally deserving), women are over-represented and singles are somewhat over-represented. There is also a difference based on the highest level of education. Those who have compulsory education (elementary school) as the highest level of education tend to consider antitrust to be illegal but also morally deserving than those who have a high school (upper secondary school) or university college as the highest level of education.

When it comes to the results of the punishment of antitrust companies, over 60 percent believe that fines is the most relevant punishment. About 20 percent believe that a warning (e.g. from the Swedish Competition Authority) should be sufficient, while ten percent believe that “shaming” (e.g. public publishing of names of persons and companies) is the most reasonable punishment. In contrast, about seven percent think that companies that commit antitrust crime do not deserve any punishment at all. If we reduce the question from company level to company management, a similar picture emerges: if the company is punished with fines, management should be punished through a ban on holding a responsible positions in the company (just over 37 percent) and/or fines for the individual responsible for the antitrust (just over 33 percent). A smaller proportion believe that those responsible should be “shamed” (just over 11 per cent). Finally, about 17 percent believe that those responsible for the antitrust should be imprisoned.

Regarding the view of concession programs, about five percent believe that antitrust companies, which cooperate with the enforcement agency/authority to expose the antitrust, should be granted immunity and get no fines at all. More than 13 percent find it reasonable that the cooperating company at least is publicly named and that the other antitrust companies are more severely punished. However, just over 32 percent believe that there must be a harsher penalty for the cooperating company, while the other companies should be penalized slightly harder. However, almost half of the respondents to this question believe that there is no difference, crime is crime and should be punished equally, regardless of whether you cooperate or not.

Finally, we can also note that all hypotheses are confirmed in the study, which indicates that Sweden does not differ from other studies conducted in Western Europe. The difference in views is instead found within the countries and is based more on demographic factors than contextual factors.