Law and economics vs. formal legal approach in criminal prosecution of the cartel

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Criminal prosecution of monopolistic activities in the form of market cartelization is the most sensitive instrument for individuals and can both have a serious deterrent effect and restrict behavior that is beneficial to the public welfare. The paper considers theoretical and economic aspects of choosing an antitrust enforcement regime in view of the projected changes in the discussion and application of the norms of article 178 of the Criminal Code of the Russian Federation, taking into account possible differences between organizing a cartel, entering into a cartel agreement and participating in a cartel. It is obvious that there are various options for correlating the concept of concluding an agreement and participating in it, including anti-competitive. However, it requires realistic assumptions about human behavior. Based on the principle of methodological individualism and the concept of bounded rationality used in economic sciences, the authors demonstrate restrictions on projecting the ratio of agreement conclusion/participation of legal entities (economic entities) on actions of individuals. Practical issues of designing criminal punishment for cartels are considered taking into account various legal concepts, including the form and types of guilt, as well as on the basis of comparison with other articles of the Criminal Code providing punishment for collective unlawful acts. In connection with the reproduction of the tradition of hostility in antitrust legislation, the Russian antimonopoly legislation has identified the risks of objective imputation (risks of type I errors) and insufficient punishment of the cartel organizer (risks of type II errors) in case of underestimation of the weight of economic concepts based on the principle of methodological individualism and the assumption of bounded rationality of individuals.

JEL classification: K21, K42.
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