New Argentine Antitrust Law is enacted
On May 15, 2018, the Executive Power enacted the antitrust law (the “Law”), which was previously approved by Congress. The Law will come into force on May 23, 2018.
The Law introduces the following changes to the previous antitrust regime in force in Argentina:
Presumption of illegality for hard-core cartels - The Law creates a presumption of illegality for hard-core cartels, thus creating an exception to the general rule of reason framework of analysis for anticompetitive conducts.
Reform of the institutional framework - The Law envisages the creation of the National Antitrust Authority, as a decentralized and independent competition agency within the sphere of the Executive branch. The National Antitrust Authority members will be the Tribunal for the Defense of Competition, the Secretariat for Investigation of Anticompetitive Conducts, as well as the Secretariat of Economic Concentrations. The individuals composing these bodies will have five-year terms which may be renewed only once, and can only be removed with proper justification.
Greater sanctions for anticompetitive conducts - Fines shall be established according to whichever is the higher of the following criteria: (i) up to 30% of turnover related to the affected products multiplied by number of years that illegal conduct lasted, sum which may not exceed 30% of the national turnover achieved by the economic groups involved in the unlawful conduct during the previous fiscal year; or (ii) twice the illicit profit obtained. If fines cannot be established by using the methods (i) or (ii) above, then fines for each offender cannot exceed the amount of approximately US$200 million. Recidivism will be subject to a duplication of the fine.
Introduction of a Leniency Program - The creation of a Leniency Program which will fully exempt from any sanction to the first party that applies for leniency and meets certain requirements, and would reduce the fines between 50% and 20% for subsequent applicants that provide useful information to prove a collusion. The Law also contemplates the introduction of a Leniency Plus mechanism whereby a leniency applicant shall be entitled to a fine reduction of up to 1/3 for participation in the first cartel, if it provides useful information about a different cartel.
Changes in merger control - The Law introduces various changes to the existing merger control system, notably, the implementation of a pre-merger control regime; an update and modification of the notification thresholds which were established in pesos in the 1999 reform (since then the Argentine peso was devaluated more than 25 times vis-à-vis the U.S. dollar) and the methods used for their calculation; and the introduction of a fast-track mechanism for transactions unlikely to affect competition. Furthermore, filing fees are established by the Law, which shall range between approximately US$5,000 and US$20,000.
Damages actions – The Law allows any injured party to bring either stand-alone or follow-on damages actions as a consequence of infringements to the antitrust law. Notably, the Law foresees the binding effect on courts of any prior infringement decision adopted by the National Antitrust Authority.
Judicial review - The Law provides for the creation of a specialized antitrust division within the Federal Court of Appeals in Civil and Commercial matters, which would act as the competent court in appeals to the National Antitrust Authority’s decisions.