A Q&A guide to competition law in Argentina.
The Q&A gives a high level overview of merger control, restrictive agreements and practices, monopolies and abuse of market power, and joint ventures. In particular, it covers relevant triggering events and thresholds, notification requirements, procedures and timetables, third party claims, exclusions and exemptions, penalties for breach, and proposals for reform.
To compare answers across multiple jurisdictions visit the Competition law Country Q&A tool.
This Q&A is part of the PLC multi-jurisdictional guide to competition and cartel leniency. For a full list of jurisdictional Competition Q&As visit www.practicallaw.com/competition-mjg.
For a full list of jurisdictional Cartel Leniency Q&As, which provide a succinct overview of leniency and immunity, the applicable procedure and the regulatory authorities in multiple jurisdictions, visit www.practicallaw.com/leniency-mjg.
Economic concentrations are subject to merger control to the extent that their value exceeds certain limits set by law. The relevant legislation is Chapter III (sections 6 to 16) of the Argentinean Anti-trust Law (Law No. 25,156) (Anti-trust Law).
The procedure involved in seeking merger approval is set by Decrees 1019/99 and 89/2001 and by resolutions of the Anti-trust and Consumer Office (Secretaría de la Competencia y del Consumidor).
The current regulatory authority is the National Anti-trust Commission (Comisión Nacional de Defensa de la Competencia (CNDC)). The Anti-trust Law provides that the relevant regulatory authority is to be the Anti-trust Tribunal (Tribunal de Defensa de la Competencia), an independent authority formed of two lawyers and two accountants. However, the Tribunal has not yet been created and it is not known when it will come into being.
See box, The regulatory authority.
An economic concentration is defined as (section 6, Anti-trust Law):
A merger between companies.
The transfer of a going concern.
The acquisition of shares or any other kind of interest in a company that gives the acquirer control or substantial influence over that company.
Any other agreement or act transferring de jure (in law) or de facto (in fact) assets of a company to a person or economic group or granting a decisive influence over ordinary or extraordinary management decisions of a company.
An economic concentration is subject to merger control where the total turnover of the group of companies affected exceeds ARS200 million within Argentina in the previous year (as at 1 December 2011, US$1 was about ARS4.3).
Transactions that meet the relevant triggering events and thresholds (see Question 2) must be notified for approval.
However, the following transactions that might otherwise meet the triggering events and thresholds are exempt from notification:
Those where the buyer already owned more than 50% of the company's shares.
Acquisitions of a company's bonds, debentures, shares that do not carry voting rights or debt.
The acquisition of a single Argentine company by a single foreign company that did not previously own goods or shares of other companies in Argentina.
Acquisitions of liquidated companies (that have not registered any activity in Argentina in the previous year).
If the value of the transaction, and the value of the assets in Argentina that are to be absorbed, acquired or controlled, do not each exceed ARS20 million, unless transactions occurred that jointly exceeded this amount in the previous year, or exceeded ARS60 million in the last three years.
The transaction must be notified within one week of whichever is earliest of the conclusion of the agreement, publication of the purchase or exchange offer, or acquisition of a controlling interest. In practice, this means that notification can be made up to a week after final completion of the transaction. If it is not made, a fine may be imposed (see Question 9, Failure to notify correctly).
It is possible to request an informal advisory opinion from the CNDC to determine whether or not notification of a particular transaction is required.
All parties to the transaction must notify.
The CNDC is currently the relevant authority to be notified (see Question 1, Regulatory authority).
Notification must be made by submission of a form F1. Depending on the complexity and significance of the transaction, further information may need to be submitted via forms F2 and F3 (see Question 4).
No filing fee is currently payable. However, when the Anti-trust Tribunal is established it is expected that filing fees will apply.
The law does not impose an obligation to suspend, although a transaction requiring authorisation will only be effective between the parties or against third parties once the relevant authority has approved the transaction (section 8, Anti-trust Law). In effect, such a transaction is valid once entered into but will become invalid if approval is denied. As most transactions are approved, in many cases the parties execute the transaction (for example, change of management) before approval, although in theory the transaction should not be executed before it is approved.
The notification procedure begins with the filing of a form F1. Within 15 days of notification, the CNDC decides whether:
To authorise the operation with or without conditions.
The parties must submit further information on the F1 (see below).
The parties must submit information on an F2.
If the CNDC requires the parties to submit an F2, within 35 days of the notification of the F1, the CNDC must decide whether:
To authorise the transaction unconditionally.
The parties must submit further information on the F2 (see below).
To prohibit the transaction or approve it subject to conditions.
The parties must file information on an F3.
If the parties are required to submit an F3, within 45 days (it is unclear from the law, but in practice it is thought this time period runs from notification of the F1), the CNDC must decide whether:
The parties must submit further information on the F3 (see below).
To authorise the transaction unconditionally.
To prohibit the transaction or approve it subject to conditions.
However, in practice the CNDC is unlikely to comply with the 45-day timetable. The CNDC can at any time require additional information from the parties, and can do so as often as it wishes. When the CNDC requests such additional information, the timetable is suspended. If the information is requested but not provided within two days, the CNDC will send a notice, requiring the parties to provide information within ten days. The CNDC has five days to check the information provided. If the CNDC does not issue a decision within that period, the notification is valid and the timetable continues to run.
When submitted, the relevant forms must contain the following information:
F1:
information on the notifying companies;
information on the companies involved (that is, all of the companies that must be taken into account when calculating the volume of the businesses) and general aspects of the economic concentration;
a description of the relevant product market;
a description of the relevant geographical market;
quantitative information on the market;
background to the transaction.
F2:
a description of the relevant product market;
a description of the relevant geographical market;
a description of the manufacturing process;
qualitative and quantitative information on the relevant market;
differentiated products;
production costs;
efficiency income.
F3: all information specifically requested by the CNDC.
For an overview of the notification process, see flowchart, Argentina: merger notifications.
Details of the transaction are published in the Official Bulletin.
Publication takes place at the final stage, when the decision is notified to the parties.
Information is not automatically kept confidential, but confidentiality may be available on request (see below, Confidentiality on request).
The parties notifying the transaction can request that the file and/or certain documentation contained in it be treated as confidential.
In addition, any witnesses who have been asked to submit information can require that the information be treated confidentially before they submit it. In this case, the parties to the transaction cannot access the information, but the information may be considered by the regulatory authority.
The only way in which third parties (such as competitors, suppliers, consumers and consumer associations) can be involved in an investigation of an economic concentration is if the authority summonses them to appear at a hearing held during the course of the investigation. Such hearings are normally conducted during investigations and competitors, suppliers, clients and associations are usually called to appear at these. However, they are not common and are not held in public. They are used only when public services are involved.
Third parties have no access to the investigation file.
See above, Representations.
Economic concentrations are prohibited if their purpose or effect is or may be to reduce, restrict or distort competition resulting in damage to the general economic interest (section 7, Anti-trust Law). This provision is consistent with section 1 of the Anti-trust Law (see Question 13).
An economic concentration will be deemed not to have affected competition to an extent that it damages the general economic interest if the resulting company does not have the power to restrict the market and increase prices.
The CNDC can impose both structural and behavioural conditions of clearance to address competition concerns. For example, it can forbid the parties opening new shops in certain cities for a particular time, force them to release clients, and so on. Conditions can be imposed at any stage of the process (see Question 4).
A failure to notify or a delay in notifying may result in a daily fine of up to ARS1 million being applied for each day of delay in the notification.
A fine can be imposed for failure to notify (see above, Failure to notify correctly).
Implementation after prohibition may result in the imposition of a fine of between ARS10,000 and ARS150 million, which is calculated based on:
The loss incurred by those affected by the prohibited activity.
The benefit obtained by those involved in the prohibited activity.
The value of the assets owned by the parties involved in the prohibited activity at the time the breach was committed.
The CNDC can impose conditions to try to neutralise distortion of competition. The CNDC can also ask the judge to dissolve, liquidate, decentralise or divide the companies.
In the case of a repeat offence, the applicable fine is doubled.
A failure to observe decisions and/or conditions for approval imposed by the regulatory authority may again result in the imposition of a fine of between ARS10,000 and ARS150 million, calculated as set out above (see above, Implementation before approval or after prohibition).
In the case of a repeat offence, the applicable fine is doubled.
A decision prohibiting or approving a transaction subject to conditions can be appealed against, but an appeal does not suspend the effects of the decision.
The appeal must be lodged with the Anti-trust Court within 15 days of notification of the decision. Within five days of lodgement of the appeal, the Anti-trust Court must refer the case to the Federal Court of Appeals for Civil and Commercial matters.
Rights of appeal are only available to the parties to the decision.
In principle restrictive provisions are automatically cleared, but when assessing the transaction the regulatory authority must consider whether those clauses accessory to the agreement that limit competition infringe the law or not. The regulatory authority can approve a merger subject to any condition it deems appropriate, and can even render a clause ineffective. Restrictive covenants, for example, concerning employees not acting for a certain time or in a certain area, may be cleared. Such clauses cannot refer to third parties, and can only be related to the main activity and main area of influence of the seller.
The Anti-trust Law does not regulate any specific industry. However, certain industries are regulated by specific laws, such as the communications, financial services and gas and electricity industries. Before issuing a decision on an economic concentration in a regulated industry, the competition regulatory authority requires that the state authority responsible for regulating the industry provide a report and opinion on the proposed concentration.
Any act or conduct, however expressed, related to the manufacturing and exchange of goods and services, whose purpose or effect is to limit, restrict, falsify or distort competition or the entry into a market, or which constitutes an abuse of a dominant position in a market, in a manner that damages the general economic interest, is prohibited (section 1, Anti-trust Law). The infringing act or conduct must give the perpetrators a significant competitive advantage.
Examples of restrictive conduct include (section 2, Anti-trust Law):
Fixing, or manipulating, or acting in concert to set, whether directly or indirectly, the sale or purchase price of goods or services in the market, as well as the exchange of information that has the same purpose or effect.
Establishing obligations to produce, distribute, acquire or commercialise only a certain restricted or limited amount of goods, or provide only a limited or restricted amount, volume or frequency of services.
Horizontally distributing areas, markets, clients and sources of supply.
Rigging or co-ordinating positions in bids or reorganisation proceedings.
Limiting or controlling the technical development of, or investment involved in the production or commercialisation of goods and services.
Preventing, or hindering the entry into, or presence in, the market by third parties or excluding them from the market.
Fixing or imposing or engaging in practice that fixes or imposes prices and conditions for the purchase or sale of goods, services or manufacturing. This behaviour can occur directly or indirectly, in agreement with competitors or individually, or in any other manner.
Regulating the market for goods or services through agreements to:
limit or control research and technological development, or the manufacture of goods or provision of services;
hinder investment whose purpose is the manufacture of goods or the provision of services, or the distribution of these goods or services.
Making the sale of a good conditional on the acquisition of another good or use of a service, or making the provision of a service conditional on the use of another service or the acquisition of a good.
Making an acquisition or sale conditional on the other party not using, acquiring or supplying goods or services produced, processed, distributed or commercialised by a third party.
Imposing discriminatory conditions on the acquisition or sale of goods or services without reason other than based on business usage and customs.
Unreasonably refusing to comply with specific requests or do business under prevailing market conditions in connection with the acquisition or sale of goods or services.
Interrupting the provision of a monopolistic service in the market to a user of public services or of public interest services.
Selling goods or providing services at prices lower than their cost, for no reason other than based on business usage and custom, in order to shift competition in the market or to damage the image, assets or trade mark value of the perpetrator's goods or services suppliers.
The current regulatory authority is the CNDC (see Question 1).
Any conduct that prejudices the general economic interest is prohibited, regardless of the manner in which it is performed. This suggests that the existence of a formal agreement is not required, and that the law also applies to informal practices.
There are no exemptions for restrictive agreements and practices.
There are no exclusions or statutes of limitation associated with restrictive agreements and practices.
It is not possible to notify the conduct to obtain clearance, as no exemptions are available and no exclusions apply.
Informal guidance cannot be sought.
An investigation can be started by the CNDC on its own initiative.
An investigation can be started by the CNDC at the request of a physical or legal person.
When a third party submits a complaint, it must contain:
The name and domicile of the third party.
A description that is as specific as possible regarding the subject matter of the complaint.
A clear explanation of the facts on which the complaint is based.
A brief description of the applicable law.
In theory, this is the third party's only contribution to the proceedings, but he may add documents if requested. Although the law does not provide for other further documents, the CNDC will not reject documents that show the existence of an illegal act.
Information on the investigation is only available to the parties.
There is no right to participate in the investigation or submit evidence. However there is an option to submit, add to or complete any evidence following filing the complaint (see above, Representations).
If the CNDC decides to commence an investigation either on its own initiative or at the request of a third party, it must:
Notify the defendant within ten days of this decision and request an explanation of the alleged conduct.
Begin to gather evidence.
Once the defendant has replied to the explanation request, the CNDC makes a decision on whether or not it should continue with the investigation.
If the CNDC decides that the investigation has merit, it must notify the defendant to appear before it and provide any relevant evidence within 15 days of the notification. The hearing must last no longer than 90 days. Once this comes to an end the parties have six days to argue against the evidence produced. The CNDC must make its final decision within the following 60 days.
If the CNDC decides there is no merit in the allegations it orders that the proceedings be discontinued.
The CNDC does on occasion publicise its investigations, but this is not commonly done.
Automatic confidentiality does not apply.
Confidentiality of certain documents held by the CNDC as a result of searches and seizures conducted may be granted on request. If the CNDC grants the request, other parties will not have access to the information, but the CNDC can consider that information when making its decision.
The CNDC has wide-ranging powers, which includes searches of premises and the seizure of information. It can also obtain and present expert witness reports, request testimony and summons witnesses as part of its investigation.
It also has the power to order the immediate cessation of any conduct considered to infringe, in principle, the Anti-trust Law, and can impose daily fines on non-compliance with any order to cease infringing conduct.
The regulator cannot reach settlements with the parties without reaching an infringement decision.
The CNDC can order the cessation of the restrictive agreement and/or practice.
The CNDC can impose fines from ARS10,000 to ARS150 million, to be fixed on the basis of:
The loss incurred by all parties affected by the prohibited activity.
The benefit obtained by all parties involved in the prohibited activity.
The value of the assets owned by the parties involved in the prohibited activity at the time the breach was committed.
In the case of a repeat offence, the applicable fine is doubled.
A failure to comply with an order to cease an infringing act will be subject to a daily fine of ARS1 million, starting from the moment that the order is breached.
When the infringing actions are committed by a company, any fine imposed is also applied joint and severally to the following company officers or service providers, who by act or omission of their duty of control, supervision or control contributed, encouraged or allowed the infringement:
Directors.
Managers.
Administrators.
Statutory auditors or members of the statutory audit committee.
Agents or legal representatives.
It is not possible to obtain immunity or leniency from any fines.
If an agreement or conduct restricts competition, the authority can order the cessation of that agreement or conduct. As a result, the whole agreement may be declared invalid, although each case is analysed separately.
Third parties whose rights have been affected by the unlawful acts can file complaints for damages suffered under ordinary law provisions. Such complaints are heard by the competent civil or commercial court.
No special procedures or rules apply.
Class actions are possible.
All decisions made by the relevant regulatory authority (CNDC) can be appealed before the Federal Court of Appeals in Civil and Commercial matters within 15 days of notification of the decision.
Rights of appeal are only available to the parties to the agreement or practice.
The abuse of a dominant position is prohibited (section 1, Anti-trust Law). Note that the existence of a dominant position itself is not prohibited; it is the abuse of such a position that is forbidden. Abuse exists where the conduct of a person with a dominant position may prejudice the general economic interest. Monopolies or oligopolies that are in breach of the Anti-trust law are forbidden (see Question 34).
The relevant regulatory authority is currently the CNDC but the Anti-trust Tribunal is due to replace it in the future (see Question 1).
The law defines dominant position as the situation where (Chapter II, Anti-trust Law):
For a certain kind of product or service:
a legal or natural person is the sole provider in the domestic market or in one or more markets elsewhere in the world; or
despite not being the sole offeror or provider in the domestic market or in one or more markets elsewhere in the world, a person is not exposed to substantial competition.
A person, because of the level of vertical or horizontal integration in the market, is in a position to detrimentally affect the economic viability of a competitor participating in the market.
The following factors are considered when determining whether a dominant position exists:
The extent to which products can be substituted.
The barriers to entry that exist in the relevant market.
The extent to which the entity can unilaterally influence the formation of prices.
The law defines abuse of a dominant position broadly and does not give examples of such behaviour. Abuses, in practice, might include such matters as refusing to do business or making the purchase of one good or service contingent on the purchase of another good or service.
There are no exemptions or exclusions.
It is not possible to notify the conduct to obtain clearance, as no exemptions are available and no exclusions apply.
There is no procedural difference between investigations into abuses of market power and investigations into restrictive agreements and practices (see Questions 18 to 21 and 23).
The same rules apply as for restrictive agreements and practices (see Question 22).
Where an abuse of a dominant position has occurred or a monopoly or oligopoly has been acquired or consolidated in breach of the Anti-trust Law, the CNDC can:
Impose and enforce compliance with conditions aimed at neutralising the distorting effects of the behaviour on competition.
Apply for a court order dissolving, liquidating, demerging or dividing the offending companies.
Impose fines under the same terms as those imposed in the case of a restrictive agreement or practice (see Question 24).
Yes, any natural or legal person suffering losses as a result of an abuse of a dominant position can claim damages under ordinary law provisions. Such complaints are heard by the competent civil or commercial court.
There are no special rules or procedures.
Class actions are not possible.
Not applicable.
Joint ventures are treated as economic concentrations and analysed under merger control law (see Questions 1 to 12).
The CNDC does not formally co-operate with regulatory authorities in other jurisdictions, although it may do so on an informal basis. The CNDC always takes decisions autonomously.
At present, there are no proposals for reform of competition law in Argentina.
Head. Ricardo Alberto Napolitani (President)
Contact details. Julio A Roca 651 4 to Piso
CP: 1322
Ciudad de Buenos Aires
Argentina
T +5411 4349 4349/4097
+5411 4349 4104/4107
F +5411 4349 4125
E cndc@secind.mecon.ar
W www.cndc.gov.ar/
Outline structure. The CNDC was created by Law 22,262, the previous anti-trust law in Argentina. It is still the relevant regulatory authority as the Anti-trust Tribunal (Tribunal de Defensa de la Competencia) (established by Anti-trust Law 25,156) has not yet been created. The CNDC is managed by a president and a board comprising four members.
Responsibilities. The CNDC is responsible for investigating any potential breach of the competition law. It oversees merger control and conducts investigations into behaviour by individuals that may be illegal.
Procedure for obtaining documents. Some decisions on mergers can be accessed from the CNDC's website. Copies of all decisions on mergers and illegal practices can be requested at the CNDC's offices.
T +54 11 4313 8100
F +54 11 4313 8180
E info@gbreuer.com.ar
W www.gbreuer.com.ar
Areas of practice. Intellectual property; competition; anti-trust.
