Supreme Court confirms the role of the Argentine Antitrust authority

On April 16, 2008, the Supreme Court of Justice in Cencosud S.A. y Supermercados Disco-Vea overruled a judgment from the Court of Appeals of Mendoza, which had suspended the Disco-Cencosud transaction back in April 2004 on the grounds that the National Commission for the Defense of Competition (“CNDC”) should be integrated in its entirety (all 5 members) in order to rule on economic transactions and that, therefore, the Secretary of Domestic Trade (“Secretary”) had no competence to approve transactions subject to notification.

In line with its recent precedents the Supreme Court once again considered that the CNDC is a technical body with advisory powers to review economic transactions, whereas the Secretary holds the power to decide whether an economic transaction should be approved, rejected or subjected to conditions. According to the Supreme Court, this is the procedure that an economic transaction should undergo when its clearance is sought, at least until the Tribunal for the Defense of Competition – whose creation has been expected since 1999- is constituted. Furthermore, the Supreme Court rejected the argument held by the lower court that the CNDC should be fully integrated to be capable of functioning.

This decision confirms the antitrust institutional framework, thus ending a four-year controversy on this issue. According to the Supreme Court ruling the CNDC only advises, while the Secretary decides. With respect to the particular case, this decision allows the CNDC to resume the analysis of the transaction, notwithstanding that the Secretary will take the final decision.

For further information on this topic please contact Julián Peña