Developing World Antitrust

By Francisco Beneke*

(Last updated on 5 June 2017)

As announced last week, the data for the Latin-South American countries is presented in part II.

The criteria for setting a starting date of modern competition policy is transcribed from the last post: “The starting date is counted from when a competition authority started to exist, who is in charge of enforcing an antitrust law applicable on an economy-wide basis, as opposed to sectoral regulation of competition. Exclusively criminal liability statutes are excluded since experience has shown they were seldom enforced and, therefore, cannot be counted as a policy apt to deter anticompetitive behavior. For the same reasons, in some cases I do not start counting from the year of the country’s first economy-wide competition law if they were either not enforced or done so in procedures without the expectation of a dissuasive penalty. More details will be presented as each country is analyzed.”

1. Colombia

Colombia has a law that dates back to 1959, but according to the OECD Peer Review of 2009 the regulations that accompanied the law “were insufficient to implement the law effectively, and it was seldom enforced for the purpose of preserving competition” (OECD (2009, p. 12)).[1] The history of the Superintendencia de Industria y Comercio reported on its website confirms this tendency towards favoring price regulation before de 1990s.[2] There are no online sources for case law prior to 2000. Since I do not have the bibliographical resources to confirm a scarce or null application of the 1959 law in its first decades, the date of 1992 in the OECD peer review is presented as the starting date of modern competition policy in Colombia.

2. Venezuela

Venezuela’s first competition law was enacted towards the end of 1991, came into force in January 1992, and the authority in charge of enforcing it started operations in April 1992.[3] This latter date is taken as the start of modern competition policy in Venezuela

3. Ecuador

Up until the end of 2011, Ecuador lacked an economy-wide competition law. The Ley Orgánica de Regulación y Control del Poder de Mercado was enacted in September 2011 and came into force the next month. However, the Superintendencia de Control del Poder de Mercado’s president was ratified by congress on September 2012.[4] The first procedure of law enforcement that can be found in the authority’s website has a 2012 reference.[5] Thus, modern competition policy in Ecuador started towards the end of 2012.

4. Peru

Peru’s first competition law dates back to November 1991.[6] The institution in charge of the law’s enforcement is the Instituto Nacional de Defensa de la Competencia y de la Protección de la Propiedad Intelectual, was created in November 1992,[7] and started operations in March 1993 (OECD (2004, p. 13)).[8]

5. Brazil

Brazil is one of the cases where it is more complicated to find a starting date for modern competition policy. There are some provisions that date back to 1951, aiming to reform the law on economic crimes (CUTS (2006, p. 550)).[9] Nonetheless, the OECD traces back the origin of modern competition policy to the 1994 law (OECD (2010a p. 9))[10]. There appears to be a consensus that the previous 1990 law was largely ineffectual. In the Conselho Administrativo de Defesa Econômica’s (CADE) website there are cases that date back to complaints filed in 1988. However, with very few exceptions that this researcher could find, the vast majority of cases were decided after 1994. This is in accordance to CUTS’s report on Brazil where it is stated that most of CADE’s decisions relate to old procedures, where no violations were found due to lack of information (CUTS (2006, p. 551))[11]. Thus, Brazil’s modern competition policy’s starting year is set as 1994.

6. Bolivia 

Modern competition policy started in April 2008.[12] In this case, the date is counted from the enactment of the law because the powers to enforce it were conferred to an already existing authority.

7. Chile

The first competition law was enacted in 1959.[13] However, in the words of the current Fiscal Nacional Económico, it was not until 1973, with the Decreto 211 that a law created a proper competition law system.[14] The FNE has an online record of decisions that date back to 1974. According to the OECD, the period of 1959 to 1973 saw very little activity in competition policy, and the majority of decisions were recommendations to prevent future violations (OECD (2010b, p. 9)).[15] The CUTS report on Chile largely agrees with these, arguing that in the period prior to the 1973 law the main focus was on price controls (CUTS (2006, p. 564))[16]. Therefore, 1973 is set as the starting year of modern competition policy in Chile.

8. Argentina 

Argentina has a history of outlawing anticompetitive behavior that goes all the way back to the laws of 1923 and 1946. These statutes were of criminal nature and in the period of 1933 to 1980 a total of four cases resulted in sanctions (OECD (2006, p. 8)).[17] According to the OECD, modern competition law in Argentina started with the 1980 law, although it was also seldom enforced until the mid-1990s when the pace quickened (Id., p. 9). According to the Argentinian competition authority itself (Comisión Nacional de Defensa de la Competencia (CNDC)), it had relevant activity only since 1997.[18] The CNDC attributes this to two main reasons: First, before the 1990s the Argentinian economy followed mostly a central planning model; and second, in the 1970s and 1980s the government actively incentivized price-fixing behavior.[19] In light of all this, the starting date of modern competition policy in Argentina is set to 1997.

9. Paraguay

Paraguay’s first competition law was enacted in 2013, which created the Comisión Nacional de Defensa de la Competencia. All members of the board of directors were appointed in 2015 and the Investigations Director in September of 2016.[20] According to a newspaper article, there are some investigations under way but it is not possible to confirm this because there is no available website for the Comisión. The Asociación Paraguaya de Estudio sobre Defensa de la Competencia has kindly provided information on merger control activity as well as a starting date of operations of the authority––June 2016.

10. Uruguay

The first competition law was enacted in 2000, but the authority in charge of enforcing it was designated until February 2001 (Bergara (2003, p. 79)).[21] This authority was the pre-existing Dirección General de Comercio. Setting the aforementioned date as the start of modern competition policy in Uruguay is troublesome for one reason. Penalties in this first law appear to not have been dissuasive. According to article 157 of the Law 17.296, the fines for violations ranged from 500 to 20.000 Unidades Reajustables (UR).[22] To have a general idea, in December 2000, this was equivalent to a range between 8.086 USD and 323.451 USD.[23] In contrast, the current law’s ceiling for fines is the highest of either 20.000.000 UR, 10% of annual revenue of the firm, or the equivalent to three times the damages of the conduct when they can be measured.[24] Therefore, the date for Uruguay is set as that when the current competition authority commenced operations, which is March 2009.[25]

As it can be seen, the date from which the start of modern competition policy can be counted is not 100 % clear in many cases. Some judgment calls had to be made according to the criteria presented at the beginning of both posts. Even if there could be some disagreement regarding the dates set here, the sources and argumentation have been made explicit so that they can be a useful input for anyone interested in the subject.

To conclude, the research shows that the time frames in which competition policies were adopted in Latin America are significantly diverse. In the two extremes we have Chile with a modern regime since 1973, and Paraguay, Guatemala, the Dominican Republic, and Haiti as part of the ever-smaller club of countries that still lack an operating competition policy. In between, we have the 1990s’ wave that coincided with a period of economic liberalization in the region and the second wave of adoptions in the first decade of the 21^st century.

The table below summarizes the information for the South American countries.

Country	Starting date of modern competition policy
Colombia	1992
Venezuela	1992
Ecuador	End of 2012
Peru	1993
Brazil	1994
Bolivia	2008
Chile	1973
Argentina	1997
Paraguay	2016
Uruguay	2009

*Co-editor, Developing World Antitrust

[1] Colombia – Peer Review of Competition Law and Policy. OECD, 2009. Available at http://www.oecd.org/daf/competition/44110853.pdf

[2] Http://www.sic.gov.co/drupal/historia.

[3] Http://www.lcuc.cl/documentos_down/mapa/venezuela.pdf.

[4] http://issuu.com/scpm2013/docs/plantilla_enero2?e=7566755/4091848

[5] http://www.scpm.gob.ec/wp-content/uploads/2014/12/Resolu_24ene.pdf

[6] http://www.indecopi.gob.pe/0/modulos/JER/JER_Interna.aspx?ARE=0&PFL=2&JER=88

[7] http://www.indecopi.gob.pe/0/modulos/JER/JER_Interna.aspx?ARE=0&PFL=0&JER=600

[8] Peru – Peer Review of Competition Law and Policy. OECD, 2004. Available at http://www.oecd.org/daf/competition/34728182.pdf

[9] http://competitionregimes.com/pdf/Book/Americas/104-Brazil.pdf

[10] Brazil – Peer Review of Competition Law and Policy. OECD, 2010. Available at http://www.oecd.org/daf/competition/45154362.pdf

[11] http://competitionregimes.com/pdf/Book/Americas/104-Brazil.pdf

^[12] Decreto Supremo 29519 of April 16, 2008.

[13] http://www.lcuc.cl/documentos_down/mapa/chile.pdf

[14] http://www.fne.gob.cl/wp-content/uploads/2011/05/OTRO_0001_2010.pdf

[15] Chile – Peer Review Competition Law and Policy. OECD, 2010. Available at http://www.oecd.org/chile/47951548.pdf

[16] http://competitionregimes.com/pdf/Book/Americas/106-Chile.pdf

[17] Argentina – Peer Review of Competition Law and Policy. OECD, 2006. Available at http://www.oecd.org/daf/competition/Argentina-CompetitionLawPolicy.pdf

[18] http://www.cndc.gov.ar/memorias/memoria97/memoria3.htm

[19] Id.

[20] http://www.presidencia.gov.py/archivos/documentos/DECRETO5990_t5q051l7.pdf.

[21]https://books.google.de/books?id=esb5agSJfkkC&pg=PA79&lpg=PA79&dq=Decreto+Reglamentario+86+del+2001+Uruguay&source=bl&ots=01dx9KDZU5&sig=y5Xv-sVqsGv6KwJk0yWhluI6GVA&hl=es&sa=X&ved=0CDIQ6AEwA2oVChMI4YWUo96WxgIVRdksCh0MmQaE#v=onepage&q=Decreto%20Reglamentario%2086%20del%202001%20Uruguay&f=false

[22] http://www.parlamento.gub.uy/leyes/AccesoTextoLey.asp?Ley=17296&Anchor=

[23] UR values can be found here http://www.impo.com.uy/bancodatos/ur.htm and the historic of exchange rates here http://www.cambio.com.uy/index.php?op=Default&Date=200012&blogId=1

[24] Article 17 of the law 18.159. http://www.parlamento.gub.uy/leyes/AccesoTextoLey.asp?Ley=18159&Anchor=

[25] http://competencia.mef.gub.uy/innovaportal/file/1439/1/2010_03_22_memoria_2009.pdf