Cartelsi Significant cases
Cartel cases in Argentina have generally involved the following:
- the arrangement of prices or production quotas;
- the distribution of market shares;
- agreements between different bidding parties in public bids; or
- the transfer of competitively sensitive information with the sole purpose of restricting competition.
According to the Antitrust Law, in the event that an infringement is proved, the cessation of the infringing conduct will be ordered and a fine could be imposed on the perpetrators that can be of: (1) up to 30 per cent of the volume of business related to the products or services involved in the unlawful conduct committed, during the last fiscal year, multiplied by the number of years that the conduct has lasted, which may not exceed the national consolidated volume of business registered by the economic group of the parties during the last fiscal year; or (2) up to twice the economic benefit produced by the unlawful conduct committed. In the event both of them are applicable, the highest amount will be imposed. On the contrary, if none of them is applicable, the fine could be of up to 200,000,000 Adjustable Units, as will be analysed below.
Between 2000 and 2005, the Antitrust Commission showed an interest in prosecuting cartels and heavy sanctions were imposed (most notably in the Cement and Liquid Oxygen cases), but from thereon until recently, no major collusion cases have been fined in Argentina.Credit Cards case
In September 2016, the Antitrust Commission served notice to Prisma Medios de Pago SA (Prisma), the holder of the Argentine licence of VISA, and its 14 shareholder banks, of an investigation in which it set out three main types of anticompetitive conduct.
The first alleged conduct entailed the setting by Prisma of high interchange and discount rates, and Prisma deliberately keeping them at the upper levels of the allowed percentages, namely 3 per cent for credit cards and 1.5 per cent for debit cards. The second alleged conduct entailed a centralisation of promotional activities regarding the VISA brand, by means of which banks would not compete against each other, but rather had financing decisions centralised on a Prisma level. The third allegation consisted in downstream discriminations and refusal to supply by Prisma to its competitors in the offline interface market, gateway and payment facilitator channels, through its position in the acquisition market, which its downstream competitors must go through. In September 2017, the Antitrust Commission accepted the divestment commitment submitted by Prisma.
During 2018, the Antitrust Commission continued to monitor Prisma's compliance with said commitment. In order to comply with the commitment, Prisma tried to sell its shares but faced several setbacks. Finally, in January 2019, the proposed divestment reached an end and Advent acquired 51 per cent of Prisma's shares.ii Trends, developments and strategiesPer se anticompetitive practices
Under the new Antitrust Law certain collusive conducts are considered as anticompetitive per se, and harmful to the general economic interest without further analysis, specifically, Section 2 of the Antitrust Law provides that the following are absolute restrictive behaviours:
- price fixing;
- the setting of production or commercialisation quotas, or the restriction of said activities with the same intention;
- market, client or supply allocation; and
- bid rigging.
The Antitrust Law sets out that these types of conducts will be deemed as anticompetitive, and thus will be considered as null.
This inclusion seeks to address two main issues: the lack of an efficient prosecution of cartels (which is further enhanced by the creation of the leniency programme, as analysed below) and the elimination of having to resort to conscious parallelism theories that have been rejected by the courts.
Furthermore, the Antitrust Commission has issued new guidelines for the prevention of anticompetitive conducts by business associations, chambers and professional associations. This reflects the growing interest of the Antitrust Commission in the activities carried out by these groups which have often been the facilitating vehicle for the commission of anticompetitive conducts. On 2017, the Antitrust Commission had issued guidelines in this regard within a resolution regarding market investigation on milk. However, in 2018, the Antitrust Commission released specific guidelines which deal with: (1) measures and recommendations on price fixing and market allocation; (2) exchange of information between competitors; (3) measures on the entry and exit of members; (4) measures on standardisation; (5) measures on publicity; and (6) recommended practices.Leniency programme
One of the most important developments introduced by the new Antitrust Law is the incorporation of a leniency programme in order to facilitate the prosecution of cartels. The Antitrust Law now incorporates a leniency programme, setting out two different scenarios for infringing parties, namely an exemption scenario and a reduction scenario, both based on a 'race-to-the-door' structure.
Pursuant to the Antitrust Law, infringing parties must comply with the following requirements to obtain an exemption from the sanctions set out therein:
- they must be the first party, among the participants of the conduct, that provides the Antitrust Commission with information and evidence, either in the event that the Antitrust Commission has not initiated an investigation, or if it has initiated an investigation but has not been able to gather sufficient evidence;
- they must immediately cease the performance of the infringing conduct, unless the Antitrust Commission requests otherwise in order for it to be able to continue an investigation;
- they must collaborate until the end of the investigation; and
- they must not destroy, forge or hide evidence of the anticompetitive conduct, nor make public the fact that they have filed for the leniency programme, unless such communication is to another antitrust regulator.
Parties that are not the first to apply for the leniency programme may request a reduction of the sanctions, if they are able to meet the remaining requirements and provide the Antitrust Commission with useful information for the investigation. The reduction may range from 20 to 50 per cent of the sanction. The reduction ratios are to be determined by the Antitrust Commission by taking into account the chronological order of the filing.
The Antitrust Law also includes a 'leniency plus' provision, by means of which those parties that would not be able to request an exemption regarding anticompetitive conduct, but that could provide information on a second instance of anticompetitive conduct, can obtain an exemption on the latter, and a one-third reduction in the former. Additionally, the Antitrust Law specifically sets out that there cannot be a joint enforcement by two parties of the leniency programme, the sole exception being if a company and its directors or other members of its staff request the enforcement of the leniency programme.
Finally, the Antitrust Law sets outs that in the event of follow-on litigation regarding conduct uncovered by parties that have applied for the leniency programme, there will be no access to the documents or information provided by the applicants, safekeeping their confidentiality.iii Outlook
The renewed interest in pursuing collusive conducts, in addition to the greater tools granted to the regulator in the Antitrust Law, show that it is quite likely that cartel enforcement will be a top priority for the Antitrust Commission in the years to come. It remains to be seen how the leniency system will be effectively implemented and what its results will be, but the legislative push towards its approval shows that cartel prosecution is once again a priority in Argentina. Especially taking into consideration the above-mentioned Notebook case in which the criminal investigation is still ongoing, but the Antitrust Commission is likely to start an investigation on bid-rigging allegations ex officio, either if such investigation is ordered by the criminal court handling the case or if it triggered by a leniency application.