We estimate the impact of legal penalties imposed on Dutch listed firms targeted by competition authorities from 1998 to 2008 on a firm's stock market value. On average, firms lose 2.3 percent of their market values when an antitrust investigation is uncovered. This corresponds to a total value loss of E4.3 billion. Overall, the fines imposed by the legal system contribute to only 12 percent of this total value loss. Another 55 percent of the total value loss is explained by the lost conspiracy-generated profits. We find that the residual 33 percent of the total value loss is explained by reputation loss. Thus, cartel offenders are disciplined largely through market-induced reputational penalties, not through legal penalties. © The Author (2012). Published by Oxford University Press. All rights reserved.