New Antrtrust law in Colombia Law 1340/2009 OlarteRaisbeck Olarte Raisbeck Moure & Castro Ltda
<ul><li>Article 333 of the National Constitution mandates the state to intervene in the economy by preventing practices su...
<ul><li>However, other government entities have some functions related to mergers and acquisitions depending on the type o...
The antitrust authority new powers <ul><li>The establishes the SIC the only national authority in Colombia incharge of con...
On merger and acquisitions (Economic Integrations) clearance by the SIC <ul><li>Any kind of legal agreement or economic tr...
On Economic Integrations clearance by the SIC <ul><li>All entities devoted to the manufacturing, distribution, rendering o...
On Economic Integrations clearance by the SIC <ul><li>The SIC has identified the following criteria in order to determine ...
On Economic Integrations clearance by the SIC <ul><li>Failure to make an antitrust filing, in the event that it is require...
Efficiency Exception   <ul><li>The SIC may not object to an economic integration if there is proof the negative effects on...
On practices that limit or hinder free competition <ul><li>Colombian antitrust regulations provide that the following acts...
On practices that limit or hinder free competition <ul><li>The law allows the SIC to offer not to punish the actors respon...
<ul><li>Thank you </li></ul><ul><li>Carlos A. Parra </li></ul><ul><li>[email_address] </li></ul>
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New Antitrust Law In Colombia

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Antitrust Regulation, practice and enforcement in Colombia

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  • AMF Bienvenida
  • New Antitrust Law In Colombia

    1. 1. New Antrtrust law in Colombia Law 1340/2009 OlarteRaisbeck Olarte Raisbeck Moure & Castro Ltda
    2. 2. <ul><li>Article 333 of the National Constitution mandates the state to intervene in the economy by preventing practices such as unfair competition and anti-competitive conduct from taking place, in order to ensure that free and fair competition exists in the market </li></ul><ul><li>The public authority that protects and promotes fair trade, controls anticompetitive practices, mergers and acquisitions, and protects consumers in Colombia is the Superintendence of Industry and Commerce (SIC) </li></ul>
    3. 3. <ul><li>However, other government entities have some functions related to mergers and acquisitions depending on the type or industry or commercial activity they supervise or control: </li></ul><ul><ul><li>Superintendence of Banks; </li></ul></ul><ul><ul><li>Superintendence of Securities; </li></ul></ul><ul><ul><li>Superintendence of Residential Public Services; </li></ul></ul><ul><ul><li>Superintendence of the Social Economy; </li></ul></ul><ul><ul><li>The Aviation Authority Administration; </li></ul></ul><ul><ul><li>The Communications Regulatory Commission; </li></ul></ul><ul><ul><li>The Television Regulatory Commission; and </li></ul></ul><ul><ul><li>The Energy and Gas Regulatory Commission </li></ul></ul>
    4. 4. The antitrust authority new powers <ul><li>The establishes the SIC the only national authority in Colombia incharge of controlling unfair competition and promoting fair practices. </li></ul><ul><li>It also orders to other authorities whose roll is to control specific actors in specific markets to assist the SIC in their roll whenever necessary; </li></ul><ul><li>The SIC in the event of merger and adquisition clearance process may ask other control governmental entities to produce a technical opinion whenever the actors involved in the merger are under their control and supervision. Although such an opinion is not obligatory to the SIC, it has to explain in his final clearance decision on the merger why it did not follow or use said technical opinion to render its decision; </li></ul>
    5. 5. On merger and acquisitions (Economic Integrations) clearance by the SIC <ul><li>Any kind of legal agreement or economic transaction that results in the combination of two or more business units under a common interest is an economic integration; </li></ul><ul><li>An economic integration could take place through various legal forms such as a merger, consolidation or acquisition of control. </li></ul><ul><li>The key issue, from an antitrust perspective according to the SIC, in order to determine if an economic integration is indeed taking place, is whether there is any change in the manner in and degree to which different competitors in the relevant market participate as a result of the transaction. </li></ul>
    6. 6. On Economic Integrations clearance by the SIC <ul><li>All entities devoted to the manufacturing, distribution, rendering or production of the same products, raw materials, goods or services must request clearance from the SIC for any operation consisting of a merger, consolidation, acquisition of control or economic integration </li></ul><ul><li>All transactions that might result in a market player controlling a competitor (horizontal merger) or a significant customer or supplier (vertical merger) must be informed, provided that the thresholds given in the law are met. </li></ul>
    7. 7. On Economic Integrations clearance by the SIC <ul><li>The SIC has identified the following criteria in order to determine if an economic integration will take place in Colombia: </li></ul><ul><ul><li>T he purchaser has a market presence in Colombian, directly or through exports to Colombia, subsidiaries, agents or distributors or a combination thereof; </li></ul></ul><ul><ul><li>T he target company has a market presence in Colombia, either directly or through exports to Colombia, subsidiaries, agents or distributors; </li></ul></ul><ul><ul><li>T here is a products or services (or both) overlap; or </li></ul></ul><ul><ul><li>T he target and the purchaser (or the companies subject to the economic integration) integrate their activities. As a result of the economic integration, two business units or entities that acted independently in the relevant market are directed under a common interest as a consequence of the integration. </li></ul></ul>
    8. 8. On Economic Integrations clearance by the SIC <ul><li>Failure to make an antitrust filing, in the event that it is required, may result in : </li></ul><ul><ul><li>Fine to the companies involved in the integration up to approximately US$462,000; </li></ul></ul><ul><ul><li>A fine to managers, directors, legal representatives and other officers of the companies involved in the integration up to approximately US$69,200; and </li></ul></ul><ul><ul><li>A nnulment of the economic integration by a court of law because of the lack of one of the esential elements of the contract: licit cause or purpose </li></ul></ul><ul><li>The SIC will object to an Economic Integration if there is any reason to believe the integration will hinder the free competition in the market. It may also approve the integration under certain conditions to guarantee the free competition. </li></ul>
    9. 9. Efficiency Exception <ul><li>The SIC may not object to an economic integration if there is proof the negative effects on consumers and the competitiveness are outweighted by its beneficial effects and that said effects cannot be achieved by other means. </li></ul><ul><li>Parties involved in the economic integration have to make sure the beneficial efects will be transferred to consumers </li></ul><ul><li>Likewise, the SIC may not object to the economic integration if regardless of the market share power of the merger, the competition in the national market is not restricted or unfairly affected </li></ul>
    10. 10. On practices that limit or hinder free competition <ul><li>Colombian antitrust regulations provide that the following acts are deemed to limit competition: </li></ul><ul><ul><li>T he breach of the regulation concerning advertisement; </li></ul></ul><ul><ul><li>I nfluencing a company to increase the prices of its goods or services or influencing such company to desist in its intention of decreasing said prices; or </li></ul></ul><ul><ul><li>T he decision to boycott or limit the access to any participant or potential participant in the market by means of refusing to execute agreements or engage in commercial relationships thereto if said act is the result of a retaliation against a company's price policies. </li></ul></ul>
    11. 11. On practices that limit or hinder free competition <ul><li>The law allows the SIC to offer not to punish the actors responsible for practices to retrain free competition, if they come forward and confess and denounce whoever else is invloved in the same; </li></ul><ul><li>It also authorizes to the competent authority to issue injunctions to stop the activities that might be hindering or limiting free competition if otherwise the activities may interfere with the effectiveness of the sanction or punishment to be applied; </li></ul><ul><li>The law authorizes the early termination of any sanctionatory proceeding if the subjetc of said process offers substantial warranties, which must be approved by the SIC. </li></ul><ul><li>The statute of limitations for administrative sanctionary proceedings regarding anti-competitive behaviour is five years; </li></ul><ul><li>Third parties that show substantial interest in the matter, such as consumer organizations or competitors. may intervene in the sanctionatory proceeding by submitting documents and proof of the unlawful conduct or activity, but they cannot access to the documents of the proceeding that are considered confidential. </li></ul>
    12. 12. <ul><li>Thank you </li></ul><ul><li>Carlos A. Parra </li></ul><ul><li>[email_address] </li></ul>

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