For years, leniency programs were the golden ticket for competition authorities to crack cartel cases wide open. But times have changed. A closer look at the data from the OECD Competition Trends 2024 and OECD’s leniency report shows that leniency applications—once the backbone of cartel enforcement—are no longer delivering as they used to. Thus, what regulators are going to do next?
A Small Uptick… But Let’s Not Get Too Excited
The number of leniency applications increased globally in 2022 and 2023 the first rise since 2015. Yet this modest rebound is misleading. The total number is still 58% lower than in 2015, and the growth is heavily concentrated in just four jurisdictions, according to the OECD. For most authorities, leniency programs are still underperforming. And the problem is that competition authorities used to rely on leniency programs too much. To the point that, according to the study, all the cartel cases in the EU from 2006 to 2017, except two, were sourced from immunity applicants.
What are the reasons for this decline? That question alone could fill a book. From the rise of private damage claims (studies show a correlation between these and fewer leniency applications), to complex and burdensome leniency procedures, the threat of criminal sanctions, or simply reputational damage—there’s no shortage of possible explanations.
But in this article, we won’t delve into the causes or what regulators should do about them. Instead, we’ll highlight two interesting trends.
The more ex-officio investigations, the more leniency applicants
Interestingly, OECD data shows a clear correlation between the number of ex-officio cartel investigations and leniency applications. In 2022, ex-officio investigations jumped by 19.3%, and leniency applications rose in tandem. Just look at the parallel between the two charts—it’s hard to ignore.
Why? One possible explanation—though not the only one—is that more active investigations raise the perceived risk of detection. This likely pushes conspirators to come forward while they still can.
So, what does the data tell us? Leniency applications are down overall, but there’s a (small) upward trend. At the same time, the number of cartel investigations launched by authorities without any applicants is also increasing. It seems only logical that authorities will keep pursuing this strategy—more ex-officio investigations, which in turn may encourage more leniency applications.
But here’s the big question: If leniency isn’t enough anymore, what other tools will regulators turn to?
Market Studies and IT Tools
Agencies can no longer rely solely on leniency. Fortunately, regulators have a broader toolbox to detect cartels—both reactive and proactive methods. You can find a complete list in the chart below, but let’s focus on the proactive side.
If we look at the proactive tools—because, as we have seen, regulators can’t simply wait and see what happens—there are two that are particularly interesting and, in our view, will play an important role in the near future: economic tools and technology-led screens.
Market studies: These provide insight into price patterns, market dynamics, and structural vulnerabilities that can flag suspicious behavior early on. Despite their value, they’re still underused in many regions, although on the rise in Asia-Pacific.
Although these studies require agencies to devote significant resources, they offer a “soft” approach to engaging with companies—while still equipping regulators with powerful tools. Market studies allow authorities to gather information and understand what companies are doing, and why they are doing it. In fact, it’s not uncommon for regulators to launch formal investigations following a market study, when warranted.
Moreover, the knowledge gained through these studies gives regulators a much clearer picture of the market, making it easier to detect anticompetitive dynamics and monitor developments over time.
Digital screening and financial metrics: Algorithms can help spot abnormal bidding patterns or pricing anomalies.
Recently, some regulators have begun examining companies’ profitability across different markets and jurisdictions to identify excessive profits—a potential signal of market power or anticompetitive behavior. It’s only a matter of time before deeper knowledge of financial indicators like ROCE, WACC, profit margins, P/E ratios, EV/EBIT, and others is routinely leveraged to detect anomalies that could point to possible cartel activity.
