Antitrust: restrictive agreements and dominance
Colombian law regulates not only restrictive agreements (as mentioned in Section II) but also the following unilateral conduct, deemed contrary to free competition per se, even in the absence of dominance: violating advertising rules contained in the Consumer Protection Statute;10 influencing a company to raise the prices of its products or services, or to desist from its intention to reduce prices; and refusing to sell or provide services to a company or discriminating against it when it may be understood as retaliation for its pricing policy.
The Constitution upholds free competition on principle, and mandates the government to prevent the abuse of market power in the Colombian market. On the basis of this principle, the law defines the following as abusive conduct per se if the offender has market power:
- the reduction of prices below costs to eliminate competitors or prevent their entry or expansion;
- the application of discriminatory conditions to equivalent transactions, which put a consumer or supplier at a disadvantage compared with another consumer or provider under similar conditions;
- conduct with the purpose or effect of subordinating the supply of a product to bundled sales;
- the sale to a consumer under conditions different from those offered to another consumer when it is intended to reduce or eliminate competition in the market;
- selling or servicing in any part of the country at a price different from that in another part of the country, when the purpose or effect of the practice is to reduce or eliminate competition in that part of the country (in which case it will be considered abusive conduct only when the prices do not correspond to the cost structure of the transaction); and
- obstructing or preventing third-party access to markets or marketing channels.
The above list correlates with Articles 101 and 102 of the TFEU. The scope of the limitations is very similar, as dominance is not prohibited by the competition laws in Colombia.i Significant cases
In 2013, the SIC sanctioned Empresa de Energía de Boyacá (EBSA) in Resolution 3694 of 2013, confirmed by Resolution 12237 of 2013. EBSA is a public utilities company, with private and public capital, engaged in energy distribution and commercialisation. The SIC found that EBSA had market power in the commercialisation of energy services in several municipalities of Boyacá and Santander (99.9 per cent of the market share) but did not have such a dominant position in the market for calibration of energy meters. EBSA abused its dominant position11 in the commercialisation of the energy services market by making supply of its services conditional upon additional obligations independent of its business object,12 such as charging for the homologation of energy meters sold by third parties. This charge had two effects:
- excluding, or reducing the market for, competing third-party calibrating laboratories, as meters calibrated by such laboratories would cost more than those calibrated directly by EBSA; and
- exploiting the market, as a higher price would have to be paid by either the third-party competitor meter sellers or their users. The SIC imposed the highest monetary sanction possible at the time on EBSA (4.7 billion pesos) and fined its legal representative approximately 47 million pesos.
In 2014, the SIC fined the operator of the San Andres International Airport for charging fuel providers unfair prices for access to airport runways, as a result of an unreasonable increase in the tarmac access fee. This was the first time that unfair pricing had been prosecuted as unilateral conduct. The fine was set at 6 billion pesos.
In 2015, the SIC found that two rice mills that were part of the same business group had engaged in resale price maintenance practices by threatening to cut distributors whose prices violated the mills' policies. The fines imposed exceeded 32 billion pesos.
In 2018, the SIC launched an investigation against several companies for practices relating to their invoicing policies, which limited the ability of negotiating invoices in secondary markets. Most investigations were terminated when the SIC accepted the guarantees offered by the companies under investigation to ensure that invoices would be freely negotiable.ii Trends, developments and strategies
The SIC has considerably increased investigations, sanctions and fines of restrictive acts and abuse of dominance, as well as reducing the time frame of the investigations and decisions.13 Notably, the SIC does not have a general and objective rule to determine market power (i.e., there are no specific market-share percentages stipulated to establish the existence of a dominant position) and market share is not considered to be the sole criterion of dominance. In addition, the SIC is of the opinion that if abusive conduct is evident, there is no need for a thorough economic examination to assess whether the conduct produced any anticompetitive effects in the market or on its competitors. Unlike the policy adopted in cartel investigations, the SIC continues to accept guarantees in unilateral conduct cases.iii Outlook
It is likely that the recent trends in enforcement will continue, meaning an increase in the number of investigations and imposition of larger sanctions.