On November 22, 2017, the Chamber of Deputies approved the draft bill introducing a new Competition Defense Law in Argentina (the “New Competition Defense Law”). The bill will now proceed to the Senate for approval, which could occur by mid-December.
The main changes included in the New Competition Law are:
– Hardcore Cartels Per Se – The New Competition Law establishes that hardcore cartels will be considered per se illegal, thereby creating an exception to the general rule of reason analysis framework.
– Institutional Framework Reform – The New Competition Law provides for the creation of the National Competition Authority (the “NCA”), as a decentralized and independent competition agency within the Executive Branch. The NCA authorities will be the Competition Defense Tribunal, the Secretariat for Investigation of Anticompetitive Conduct, and the Secretariat for Economic Concentrations. Members of these bodies will have five-year terms, renewable once, and can only be removed for just cause.
– Higher Sanctions for Anticompetitive Conduct – Fines will be set based on the greater of the following criteria: (i) up to 30% of the turnover related to the affected products multiplied by the number of years the illicit conduct lasted, not exceeding 30% of the national turnover of the economic groups involved in the illicit conduct during the previous fiscal year; or (ii) double the illicit gain obtained. Repeat offenses will be subject to doubling the fine.
– Introduction of a Leniency Program – The creation of a Leniency Program that will fully exempt from any sanction the first party to request leniency and meet certain requirements, and reduce fines by between 50% and 20% for subsequent applicants who provide useful information to prove a collusion. The bill also contemplates the introduction of a “plus” leniency mechanism, by which a leniency applicant will be entitled to up to one-third reduction of the fine for participation in a first cartel if they provide useful information about a different cartel.
– Changes in Merger Control – The draft bill introduces several changes to the current merger control system, in particular, the application of a prior control regime; an update and modification of the notification thresholds originally established in pesos in the 1999 reform (since then, the Argentine peso has devalued more than 15 times against the US dollar) and the methods used for their calculation; and the introduction of a fast-track mechanism for transactions unlikely to affect competition.
– Actions for Damages – The bill allows any harmed party to bring claims for damages, either autonomously or successively, as a consequence of infringements of the competition law.
– Judicial Review – The bill provides for the creation of the National Competition Appeal Tribunal, which would act as the competent court for appeals against NCA decisions.
It is most likely that the Senate will review the new Competition Law in the coming weeks, although this has not yet been confirmed.
