Argentina partially amends its Antitrust Law

On September 17, 2014, the Congress of Argentina passed law No. 26,993, that entered into force on September 29, 2014, which among other matters, partially amending the antitrust law No. 25,156 enacted in 1999 (the “Antitrust Law”). The amendment of the Antitrust Law involves both institutional and procedural modifications, none of which can be considered as a movement towards the alignment of antitrust enforcement in Argentina with the international best practices.

The following are the main changes introduced to the Antitrust Law:

(i) Elimination of the creation of the independent Antitrust Tribunal: the Antitrust Law of 1999 provided for the creation of an independent and self-sufficient Antitrust Tribunal that would replace the Antitrust Commission (CNDC) and the Secretariat of Trade as the enforcement authority. Despite the legal obligation set forth in the Antitrust Law, the Executive Branch never set up the Antitrust Tribunal. On several occasions, the Supreme Court of Justice communicated the Executive Branch that the failure to comply with the law and to establish the Antitrust Tribunal, which lasted over 15 years, amounted to a “legal scandal”.

By means of the amendment the creation of an independent Antitrust Tribunal has been eliminated and the enforcement authority of the Antitrust Law shall be “determined by the Executive Branch”. Most likely, the Executive Branch will appoint the Secretariat of Trade as the enforcement authority of the Antitrust Law since it has been the enforcement authority throughout the time the Antitrust Tribunal was to be created. The amendment to the Antitrust Law expressly states that the CNDC has solely an assistance role to the enforcement authority.

Among the many setbacks of the amendments introduced to the Antitrust Law, such as having an antitrust enforcement authority that is exclusively appointed by the Executive Brach and thus lacks of the necessary independence, at least it is now clear that the CNDC has only an advisory role and has absolutely no adjudicating powers, which brings an end to the much debated topic of the scope of the CNDC’s powers.

(ii) Injunctions: Pursuant to the amendment to the Antitrust Law, now the CNDC will no longer be able to issue injunctions as it did until now. From now on, only the newly appointed antitrust enforcement authority will be able to issue injunctions. Until recently the CNDC issued several injunctions based on the powers granted to the Antitrust Tribunal. However, the new wording eliminates such possible interpretation, which anyway had been constantly challenged by the courts in recent years.

(iii) New powers: The amended Antitrust Law vests the enforcement authority with the power to “control stocks, check origins and costs of raw materials and other goods”. This new power seeks to validate the de facto situation that has been taking place in recent years, in which the government had been attempting to investigate the costs structure of different industries through the use of the Antitrust Law.

(iv) Appeals: Prior to the amendment of the Antitrust Law, appeals lodged by the parties suspended the payment of fines. However, such suspensory effect has been repealed as a consequence of the amendments introduced to the Antitrust Law. This means that as from now, fines imposed by the enforcement authority follow the so-called solve et repete principle, which means that in order to appeal a fine, the amount of the fine must be first paid for the appeal to be considered by the Courts. The constitutionality of this specific provision will most likely be challenged by companies that receive fines in the future.

In addition, the amendment of the Antitrust Law reduces from 15 to 10 business days the term to lodge appeals (relating to any matter decided by the enforcement authority) with the Court of Appeals.

(v) Court of Appeals: Ever since the Antitrust Law was enacted in 1999, there has been contradictory case law regarding what Court of Appeals was competent to review antitrust decisions. On one hand there is case law determining the Court of Appeals on Civil and Commercial matters as competent and, on the other hand, there are cases which declare the competence of the Court of Appeals on Criminal Economic matters. Pursuant to the amendment of the Antitrust Law, the Consumer Relations Court of Appeals shall be competent to review antitrust matters, which is a new Court of Appeals to be created as a consequence of the enactment of Law No. 26,993 to handle cases related to the Antitrust Law and Consumer Protection Law.

The Argentine government is currently working on a draft to regulate the amendments and the regulatory decree is expected to be published before the end of the year.

For further information on this topic please contact Julián Peña