Argentina: Competition Interaction Beyond Borders

Last Updated: 18 June 2012
Article by Alfredo M. O'Farrell and Miguel Del Pino

Information and technical exchange with foreign regulators could help the Antitrust Commission to enrich its current practice so as to keep pushing its standards even higher.

Introduction

The recent speech given by European Commissioner Joaquin Almunia at the International Competition Network Annual Conference in Rio de Janeiro stressed the need for further collaboration efforts by competition agencies around the world, providing as an example a statistic that showed that the EU Commission collaborated with other foreign agencies in approximately "...one third of the decisions it took on mergers, 40% of cartel cases and half of its antitrust decisions". During that conference, the Commissioner praised the type of collaboration between CADE and the European Commission.

While Argentina has taken steps towards its entry on the current global integration trend, the effective result track record of its instruments do not show a great interaction with other foreign agencies.

The Argentine standing on international cooperation

The Argentine Antitrust Commission has a normative track record that shows its intention to collaborate with other agencies, yet the effective cooperation has not shown considerable results.

Pursuant to the "Cooperation Understanding between the Competition Authorities of the Member States of the Mercosur for the Enforcements of their National Competition Laws" (the "Mercosur Understanding") which was approved on July 7, 2004, Argentina, Brazil, Paraguay and Uruguay should inform the other corresponding Member States on whether a proceeding was initiated on its jurisdiction that may be of interest to other Member State.

In the case of Argentina, the timeframe for said notification would be of 15 days as of the date of (i) initiation of the investigation phase in the event of an anticompetitive conduct or (ii) filing of a merger control notification.

The following activities would fall under this non-mandatory information process:

  1. activities that are relevant for another regulator from a Member State;
  2. activities that involve anticompetitive practices that have been carried out either partially or totally in another Member State;
  3. activities that involve economic concentrations in which one of the involved parties belongs to other Member State;
  4. anticompetitive conducts that may have been allegedly demanded, recommended or approved by other Member State;
  5. legal orders that may expressly demand or prohibit a determined conduct in the territory of other Member State; and
  6. proceedings that may involve the search for information located in another Member State's territory.

The Mercosur Understanding also takes into account the possibility that should two agencies from Member States be working on related proceedings, they would consider the possibility of coordinating their activities by taking into consideration the objective set out by the other agency.

However, it must be taken into account that the agencies are also bound by their own local confidentiality rules, which may have an impact on this collaboration. In that respect, it would have to be taken into account whether the exchange of information on anticompetitive practices investigations could be carried out should the information be obtained during dawn raids. Additionally, the existence of divergent attorney-client privilege rules could also pose a problem for this interaction.

On a more general note, the Mercosur Understanding also leaves the interest by the executing parties to cooperate on technical collaborative issues such as exchange of employees or their participation in common training programs on record.

This Mercosur Understanding follows the "Cooperation Agreement between Argentina and the Federative Republic of Brazil on cooperation between their Antitrust Authorities in the application of their antitrust laws" (the "Argentina-Brazil Agreement") - signed in Buenos Aires on October 16, 2003, but was accepted by the Argentine Congress on December 2010 - almost to the letter. As such, while the Argentine-Brazil Agreement entered into effect in Argentina at a later stage, it could be considered that the Mercosur Understanding would be an extension of the scope of the former one.

While no publicly available information has been provided regarding the enforcement of the Mercosur Understanding in Argentina, the Antitrust Commission has informed that the Argentina-Brazil Agreement was first successfully used in a case on June 16 2011. Due to the lack of a relevant practice of these treaties, it remains to be seen whether these treaties they will be able to be used as effective tools for the prosecution of anticompetitive practices and the throttle up of analysis of merger control cases.

In practice, the Antitrust Commission also maintains contacts with agencies beyond the scope of the Mercosur, most importantly those corresponding to the United States of America and the European Commission. However, since no formal treaties have been set up in that regard, parties would not be able to request the execution of information exchanges in order to speed up their proceedings or to clear away concerns already analyzed in other jurisdictions. As such, the possibility of trying to achieve a "one-window" approach in Argentina remains distant for the time being.

Conclusion

Since the Argentine Antitrust Commission is currently undergoing a great activity in both its merger control and anticompetitive prosecution activities, it would be advisable for said agency to generate links with other regulators which can provide assistance with its day-to-day analysis and work. The information and technical exchange with those regulators could help the Antitrust Commission to enrich its current practice so as to keep pushing its standards even further.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Authors
Alfredo M. O'Farrell
 
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