According to the Settlement Procedure, a reduction on cartel fines is granted to firms admitting their participation in a cartel agreement. In this paper, we study the effect of unilateral overlapping ownership on the individual incentives of two colluding asymmetric firms to settle with the Competition Authority. We show that, regardless of which firm increases its cross-holding level, both firms are provided with higher incentives to enter the settlement procedure. On the contrary, when the reference shareholder of either firm increases its minority shares in the other, the controlled firm faces higher incentives to settle, as opposed to the target firm which increases its preference for collusion. Therefore, the objective of CAs to induce all cartel firms to settle is more likely to arise in equilibrium under cross-shareholding than under common ownership. This theoretical finding is supported by empirical evidence revealing that the former overlapping ownership type is more closely related to non-hybrid settled cases, as opposed to the latter which is better linked to hybrid settled cases.
Zoom link: https://uoc-gr.zoom.us/j/97374751400?pwd=UjZ4cUVaSXZ2bnZUT1BNSVhySFlDQT09
