The recently promulgated decree regulating the Competition Act refers to anticompetitive agreements, abusive behavior and mergers. Besides defining these legal terms it sets as authority the National Competition Commission (CONACOM).
Provisions in Decree 1490 of 2014 which regulates the Competition Act refer to anticompetitive agreements, abusive behavior and mergers.
Anticompetitive agreements are decisions, concerted or consciously parallel practices carried out by competing individuals or legal entities, or any other practice that would have the effect of preventing, restricting or distorting competition in all or part of the domestic market.
The procedure to be performed by the competition authority – CONACOM – is an analysis of the alleged economic efficiency gains. These gains must be demonstrated, paying particular attention to the need to offset the negative effects on competition and generate benefits that would be passed on to consumers.
Another form of abuse of dominance is collusive tendering, which is a horizontal restriction of competition through agreements, decisions, concerted or consciously parallel practices between competitors intended to coordinate bids or proposals or to refrain from bidding on public or private contests or auctions.
CONACOM must consider the frequency of the bidding process or competition, restrictions on competition that may exist in the terms and conditions of the contracts, the behavior of the prices offered, evidence of coordination in the documentation submitted in bids or tenders, as well as the behavior of bidders during the execution of contracts.
Public institutions that perform procurement or contract services are required to take into account the principle of free competition in setting the specifications to ensure respect for the principles of transparency, openness, effectiveness and free competition.
Predatory pricing is another form of abuse of dominant position. It consists of non-occasional sale of goods or services where the price is unreasonably lower than the actual cost of production, the effective purchase price or replacement value, as applicable, or with no profit margin. Sanctions will be applicable only to conduct intended to exclude competitors from a previously determined relevant market and having the real possibility of recouping any losses incurred by increasing prices after excluding competitors.
Regarding mergers, when it is not possible to determine the market share that is acquired or increased in a merger or acquisition, the notification requirement should be determined based on the calculation of the overall gross sales in Paraguay of the parties. Merger notification will be triggered if the calculation exceeds 45% of the domestic market.