Draft Amendment Encourages Competition

On September 14 2000 the Pro-Competition Superintendency posted a draft Amendment of the Law to Promote and Protect the Exercise of Free Competition on its web site. The draft has been submitted to the National Executive for consideration. The 112 articles of the draft substantially modify and complement the 57 articles of the law currently in effect.

Among the proposed changes are:

• the creation of the Commission to Promote and Protect Free Competition, which will replace the superintendency. It will comprise of three members and an economic court, with powers to enforce the new law and to decide cases where the law is violated;

• the clarification of the numerous provisions of the regime of economic concentration, making notification mandatory in certain circumstances;

• the development of norms regarding unfair competition, in light of the superintendency's experience in recent years;

• the introduction of provisions concerning state intervention in the regulation of public services (eg, telecommunications, transport, electricity, national security, health and education), so as to provide a framework of equity, non-discrimination, free competition and elimination of abusive conditions; and

• the elimination of the procedure of obtaining authorizations for certain practices, in order to expedite the operation of the markets.

During the eight years of enforcement of the Competition Law, the superintendency has issued a considerable number of decisions, mainly in connection with economic concentrations and unfair competition. The superintendency proposes this draft in order to incorporate its enforcement experience into legislation and to provide clearer rules for economic agents competing in various markets. The aim is to contribute to the elimination of barriers to competition, and to make it safer for participants to compete fairly.

If the draft is adopted the role to be played by the Competition Commission will be crucial for companies, particularly after the full opening of competition in the telecommunications sector on November 28 2000.

In addition, the Telecommunications Law has recently been amended. The competition authority now has the task of guaranteeing that companies participating in the telecommunications market have a transparent environment. Competition is to be enhanced at all levels, mainly by impeding the abuse of dominant positions and concentration of this activity by a few large companies, to the detriment of other economic agents.

For further information on this topic please contact Olga Nass de Massiani or Isabel Victoria Márquez at Travieso Evans Arria Rengel & Paz by telephone (+58 212 277 3333) or by fax (+58 212 277 3334) or by e-mail ([email protected] or [email protected]).