Argentinean Antitrust Authority Updates Merger Control Thresholds And Monetary Penalties
On April 25, 2019, the Secretary of Domestic Trade -Argentina’s current Antitrust Authority (1)- published Resolution No. 145/2019 whereby the value of the administrative unit created as a reference by the Antitrust Law No. 27,442 (the “Antitrust Law”), was increased from 20 pesos to 26.4 pesos, thereby updating both the merger control notification thresholds and the monetary penalties set forth in the Antitrust Law.
Pursuant to the Antitrust Law both the merger control notification thresholds and the monetary penalties are expressed in administrative units, unlike the previous antitrust regime where these were expressed in fixed local currency amounts and thus quickly became outdated as a consequence of inflation.
The administrative unit’s value, according to the Antitrust Law, is to be updated on a yearly basis by the Antitrust Authority following the progression of the official consumer price index. This is the first time the Antitrust Authority has updated the value of the administrative unit under the Antitrust Law, which value was originally set at 20 pesos, and now has been raised to 26.4 pesos.
The increase in the administrative unit’s value has an impact on the merger control thresholds as well as on the monetary penalties provided in the Antitrust Law. The main resulting modifications are summarized below:
• Merger control
Economic Concentrations must be notified to the Antitrust Authority if the combined Argentine annual net sales of the acquiring group and the target group exceed AR$2,640 million during the preceding year (approx. US$57.3 million taking into consideration the current exchange rate).
Additionally, the de minimis exemption was updated, and now otherwise mandatory economic concentrations are exempted from notification if both the amount of the Argentine portion of the transaction and the value of the assets to be transferred in Argentina are below AR$528 million (approx. US$11.5 million at the current exchange rate), unless where the acquiring group was involved in an economic concentration in the same market in Argentina valued in AR$528 million during the preceding 12 month period or AR$1,584 million (approx. US$34.5 million) during the preceding 36 month period.
• Monetary penalties
Fines for anticompetitive conducts, when these cannot be calculated using the turnover or the illicit gain tests provided in the Antitrust Law, cannot exceed AR$5,280 million (approx. US$115 million at the current exchange rate).
Daily fines for breach of cease and desist orders, late filing and gun-jumping practices, when these cannot be calculated by means of using the turnover test set forth in the Antitrust Law, can now amount to AR$19.8 million (approx. US$435,000).
The new merger control thresholds and monetary penalties referred to above shall be in force as from April 26, 2019 until a new value for the administrative unit is adopted by the Antitrust Authority.
(1) The Argentinean government expects to finally set up the new Antitrust Authority by September 2019. In that regard, also on April 25, 2019, the Secretary of Domestic Trade issued Resolution No. 146/2019, which opens the public competition to select its members. It is worth pointing out that the ex ante merger control regime foreseen in the Antitrust Law will become effective one year after the creation of the new Antitrust Authority. Until then, the current 1 week after closing ex post regime will continue in force.