Argentina: Limits To The Enforcement Powers Of The National Antitrust Commission

The Argentine Supreme Court decided that the National Antitrust Commission will be in charge of the instruction and investigation of infringements under Antitrust Law No. 25,156, while the adjudicative power of these procedures rests on the Secretary of Domestic Trade of the Ministry of Economy through the issuance of administrative acts, until the National Tribunal for the Defense of Competition is set up.

Background

Regarding the extraordinary appeal lodged by the National Antitrust Commission (the "CNDC"), dated November 29, 2011, the Argentine Supreme Court (the "Supreme Court") upheld the decision of Division "A" of the Federal Court of Appeals on Civil and Commercial Matters (the "Federal Court of Appeals") in re: "Moda S.R.L. s/ solicitud de intervención", which overturned the decision by means of which the CNDC ordered to close the proceedings initiated in connection with the complaint for anticompetitive acts prohibited by the Antitrust Law No. 25,156 (the "LDC") filed by Moda S.R.L.

In the opinion of the Supreme Court, the resolution to close the proceedings constitutes an excess of the powers vested in the CNDC and therefore should be issued by the Secretary of Domestic Trade of the Ministry of Economy (the "Secretary of Domestic Trade") while pending the creation of the National Tribunal for the Defense of Competition (the "Tribunal") established by the LDC.

According to the Supreme Court, whatever the reason for ordering to close the proceedings, mindful of its importance and consequences, the decision to close the proceedings clearly resembles the adjudication powers and not the instruction and investigation powers that the LDC has assigned to the CNDC.

On the other hand, under the criteria of the Supreme Court, the argument posed by the CNDC that the decision to close the proceedings responded to purely formal reasons involving solely the lack of ratification of the complaint, which therefore would be within the extent of the instruction powers assigned to the CNDC, was not successful either. The Supreme Court concluded that the annulled decision also made merit of the substance of the complaint setting forth reasons that led to its inadmissibility and justified its dismissal

The resolution issued in this case is consistent with other precedents in which the Supreme Court ruled that the decision to close the proceedings is within the purview of decision-making powers applicable to the Secretary of Domestic Trade. In fact, this is not the first opportunity in which the Supreme Court questioned the interpretation of the LDC regarding the powers that correspond to the CNDC and the Secretary of Domestic Trade during the interim period provided under Section 58 of the LDC until the creation of the Tribunal.

In the same manner, in cases such as "Credit Suisse First Boston Private Equity II LLC-Sucursal Argentina, Nueve Artes S.A. y HFD Media S.A. - Expediente Nº S.C., C 1216, L.XLI" ("Credit Suisse"), "Recreativos Franco s/ apelación resolución Comisión Nac. Defensa de la Competencia - Expediente Nº R. 1170. XLII y R. 1172. XLII" ("Recreativos Franco") and "Belmonte, Manuel y Asociación Ruralista de General Alvear c/ Estado Nacional - Expediente N° B. 1626. XLII" ("Belmonte") the Supreme Court understood that the CNDC and the Secretary of Domestic Trade are the current enforcement authorities with powers to examine and decide cases involving competition until the Tribunal is constituted.

In the Credit Suisse ruling the Supreme Court interpreted that until the Tribunal has been constituted, the CNDC and the Secretary of Domestic Trade are the enforcing authorities to address issues of competition arising from the LDC.

Also, according to the ruling in Recreativos Franco, the Supreme Court accepted the arguments given by the Attorney General who understood that Section 58 of the LDC established that the former enforcing agency that acted pursuant to the terms of the abrogated Antitrust Law No 22,262 must continue analyzing the cases until the Tribunal is finally created. The Supreme Court specifically stated that the CNDC must instruct, investigate and issue a recommendation and the Secretary of Domestic Trade must issue the final decision.

In the Belmonte case the Supreme Court once again stated that the CNDC and the Secretary of Domestic Trade have the power to analyze and decide antitrust cases until the Tribunal is set up.

Conclusion

The Supreme Court decision in this case is consistent with the precedents mentioned above regarding the fact that until the Tribunal is created the system for analyzing antitrust issues in Argentina involves the CNDC and the Secretary of Domestic Trade. Nevertheless, in this case the Supreme Court goes one step further and provides a criterion regarding the limits to the instruction powers vested in the CNDC.

Source

Decision issued by the Supreme Court on November 29, 2011. Available at http://www.csjn.gov.ar/cfal/fallos/cfal3/toc_fallos.jsp

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.