Competition Act adopted as National Emergency

The law creates the Superintendency of Competition, which will have to ensure free competition and punish with fines up to about Q22 million .

The Competition Act was passed in full in the early morning of Wednesday, November 20. Photograph: Free Press (Emilio Chang).

Congress secured the passage of the Competition Act after a series of negotiations on the ruling wing. The proposal achieved its approval of national urgency, in a single debate, after receiving the vote in favour of 115 deputies.

This bill had been among the objectives of the Seed Movement, but the lack of agreements stopped a first proposal. But after a new opinion from the Committee on the Economy, the initiative secured the backing of a good number of blocs.

The Competition Act has 121 articles. Among them, the creation of the Superintendency of Competition, which will be the entity in charge of ensuring that the rule is complied with, investigated and sanctioned bad market practices.

The proposal was read by the secretaries of the Board of Directors, who, with the exception of Congresswoman Karina Paz, it was impossible to understand precisely the content of each article. His poor reading prevented some articles from being heard alive.

But the document and the digital socialization of some amendments, which only emphasized the correction of some terms, made it possible to know with certainty the detail of the new law.

Although the clock was already around midnight, the deputies did not unmark each other. They were present in the Chamber, although not everyone seemed to pay attention to the proposal.

Bad practices and sanctions

The law provides for relative and absolute anti-competitive practices. All of them are subject to sanctions and warnings that may vary. The document points to four points as related malpractice.

1. Agree, arrange, fix or handle prices, charges, discounts, fees, royalties, royalties, fees or fees, directly or indirectly, on the sale or purchase of goods or services;
2. Divide, distribute, assign or impose portions or segments of a current or potential market of goods or services, either by territory, by volume of sales or purchases, by type of products or services, by certain or determinable times or spaces, by customers or sellers, by distribution of sources of inputs or by any other means;
3. Set, limit or restrict the production, demand, distribution or marketing of goods or services, whether by quantity, volume or frequency; or;
4. Concert or coordinate offers in national or international public procurement processes, such as tenders, quotations, competitions or auctions. With the exception of this prohibition, the offers submitted jointly by two or more economic operators, which are clearly identified as a joint offer or consortium in the document submitted by the bidders.

But the range of bad practices is greater when it comes to entities that make use of “ablutas.”

1. The imposition of the price, margin or percentage of marketing that a buyer, distributor or supplier must observe when marketing, distribution or providing goods or services.
2. The sale, purchase, transaction or any contract subject to the condition of not acquiring, selling, marketing, distributing, retransmitting, providing or using goods or services produced, processed, distributed or marketed by a third party.
3. Sale below its variable average cost, or sale below its total average cost, but above its variable average cost, if there are elements to presume that it will allow the economic agent to recover its losses through future price increases.
4. The action of one or more economic operators whose direct effect is to increase costs or hinder the productive process of another or other economic operators.
5. The unjustified establishment of different prices or conditions of sale, purchase or any type of procurement for different buyers or sellers on equivalent terms.
6. The refusal or restriction of access to an essential input by one or more economic operators, or access on discriminatory terms and conditions.
7. Concertation between or invitations to trade under an economic operator or to refuse to sell, market or to acquire goods or services to that economic operator, with the aim of deterring it from a particular decision, reprisals or force them to act in a particular direction.
8. Unreasonably deny the access or income of an economic agent to a trade union, professional or business association, which is essential to be able to participate effectively in a market.
9. Prevent or hinder the entry or permanence of economic operators in all or part of the market.

Penalties for this type of conduct, since it is proven, will lead to the imposition of fines that can reach up to 200,000 non-agricultural minimum daily wages, which would be the equivalent of about Q22 million, an estimated figure based on the minimum payment in force in 2024.

New authority

The Competition Act creates the Superintendency of Competition, which will have as its higher authority a directory. This shall be made up of a full and alternate representative of the following entities: Chairman in the Council of Ministers; plenary of the Congress, of a list of six candidates suggested by the Committee on the Economy; and by the Monetary Board.

The board will operate for a period of six years and its presidency will be rotating among its three incumbent representatives. The presidency will last two years and will begin with the oldest representative to the youngest.

The creation of these new bodies will be to ensure compliance with the law, investigate all complaints or complaints of apparent unfair competition and impose any sanctions they deem appropriate.

Now it remains to be expected that the new law will pass into the correction and style of Congress, and then sent to the president to issue the veto or the corresponding sanction.

Ths article was translated after appearing in Prensa Libre