Tag Archives: Competition Policy in Latin America

The Adoption of Modern Competition Policies in Latin America – Part II: South America

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.

  1. 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

  1. 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.

  1. 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]

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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 21st 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

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The Adoption of Modern Competition Policies in Latin America – Part I: North and Central America and the Caribbean

By Francisco Beneke*

(Last updated on 12 April 2017)

Competition policy, as we now know it, is a relatively recent phenomenon in some Latin American countries, not so new in others, and non-existent in an ever smaller group. The issue of antiquity is illustrative of the context in which enforcement authorities and the courts interact with each other. It can affect the degree to which they are influenced by older regimes and also tell us something about the path of institutional strengthening that every authority undergoes. In other words, one would expect that long-standing competition authorities face different challenges than their younger counterparts.

Because the post was turning into a lengthy document, I will divide it in two parts. Part I deals with North and Central America and the Caribbean, and part II will present the information corresponding to South America. The latter will be published in one-week time.

The year in which I consider that a modern competition policy began in each Latin American country is presented. 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. Mexico

Mexico’s first competition law entered into force in June 1993, and created the Comisión Federal de Competencia.[1] It is hard to find the exact month when the institution started to operate. According to the first annual report, merger control activity and the prosecution of anticompetitive behavior started during the second half of 1993.[2] Therefore, that year is set as the starting date of modern competition policy in Mexico.

  1. Guatemala

Guatemala is one of two countries in Latin America that still does not have an economy-wide competition law.

  1. El Salvador

El Salvador’s first competition law entered into force in January of 2006, date in which the antitrust authority, Superintendencia de Competencia, started to operate.[3]

  1. Honduras

Honduras’s first competition law entered into force in February 2006 but it was not until December of that year that the Comisión para la Defensa y Promoción de la Competencia started to operate.[4]

  1. Nicaragua 

Nicaragua’s first competition law came into force in June 2007, but it was not until March 2009 that the first authorities were elected and started to hire the authority’s first team of professionals.[5] Therefore, the latter date is set as the beginning of competition policy in Nicaragua.

  1. Costa Rica

According to the OECD peer review of competition policy in Costa Rica, the Comisión para Promover la Competencia started to function in 1996 (OECD (2014, p. 7)).[6] However, the same report states that the first cases decided by the authority date back to 1995 (Id., p. 28 & 34). The authority’s website shows the same information of a cartel and an abuse of dominance case that were resolved in 1995.[7] It appears that the OECD 1996 date may have been a mistake and that the real year in which the antitrust law began to be enforced was 1995.

  1. Panama

Panama’s first competition law was enacted in February of 1996, but according to the OECD peer review, the antitrust authority received its first endowment in 1997 (OECD (2010a, p. 57)).[8] Indeed, 1997 is the first year in which the Comisión de Libre Competencia y Asuntos del Consumidor reports activity.[9]

  1. Dominican Republic

The Dominican Republic’s first law was enacted in 2008 but the authority was only able to start its enforcing tasks in January 2017 because that was the date when its Executive Director was chosen.  [10]

  1. Haiti

Haiti is the other one of the two Latin American countries that does not have a competition law.

The table below presents a summary of the information.

Country Starting date of modern competition policy
Mexico Ca. June, 1993
Guatemala No competition law enacted
El Salvador January, 2006
Honduras December, 2006
Nicaragua March, 2009
Costa Rica Ca. January, 1995
Panama Ca. January, 1997
Dominican Republic January, 2017
Haiti No competition law enacted

To conclude, it is worth noting that Mexico’s policy is the oldest from the countries under analysis. In Central America one can distinguish two waves of adoption of competition policy, with Costa Rica and Panama as the pioneers. The rest of Central America caught up some 11 to 14 years later with the exception of Guatemala, who under the Association Agreement with the European Union has the obligation to pass a competition law by the end of November of 2016. The two sovereign Latin-Caribbean states lack competition policies as well, though the Dominican Republic is just a few steps away.

*Co-editor, Developing World Antitrust

[1] Http://189.206.114.203/index-cfc.php?Itemid=617.

[2]Http://189.206.114.203/images/stories/Publicaciones/Informesanuales/completos/informe9394completo.pdf.

[3] Http://www.sc.gob.sv/pages.php?Id=8&Id_menu=102010.

[4] Https://www.cdpc.hn/sites/default/files/Privado/Memorias/memoria%25202006.pdf.

[5] Http://www.procompetencianic.org/info/2012/InformeEjecutivo2009.pdf.

[6] Http://www.oecd.org/daf/competition/CostaRica-PeerReview2014esp.pdf.

[7] Http://www.coprocom.go.cr/que_hacemos/sanciones.html.

[8] Http://www.oecd.org/daf/competition/46587096.pdf.

[9] Http://www.acodeco.gob.pa/acodeco/view.php?arbol=4&sec=19&pagi=0.

[10] Https://www.diariolibre.com/economia/nueva-directora-ejecutiva-viene-a-darle-validez-a-pro-competencia-CG5932567.

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