I OVERVIEW OF RECENT PRIVATE ANTITRUST LITIGATION ACTIVITY

Since Guatemala has no antitrust or competition laws (see Section II, infra), there is no antitrust litigation activity to report.

II GENERAL INTRODUCTION TO THE LEGISLATIVE FRAMEWORK FOR PRIVATE ANTITRUST ENFORCEMENT

Guatemala is in the process of approving competition legislation, however there is currently no specific competition law or antitrust bill in our legal system.

Although there is no specific bill that regulates competition law, there are scattered provisions that regulate antitrust practices.

The Constitution of Guatemala establishes a general prohibition on monopolies and state privileges. It empowers the state to limit companies that may absorb, to the detriment of our national economy, production in one or more industrial, commercial or agricultural activities.2

The Commerce Code also has a general provision that prohibits monopolies by imposing the obligation on all companies to supply to anyone who requests their products or services, observing equal treatment among the various consumer categories.3

The Criminal Code of Guatemala regulates monopolistic behaviour, which is attributable to whoever performs acts, for illicit purposes, that are evidently to the detriment of our national economy, absorbing (or taking advantage of, with some sort of privilege) the production exclusively of one or more industrial branches, or of the same commercial activity or related to the agriculture industry. In addition, the following acts are considered as monopolistic:

  • a the hoarding or removal of articles of basic needs to provoke a rise in prices in the local market;
  • b all acts that hinder or seek to impede the free competition in production or trade;
  • c all acts executed without government authorisation that seek to limit the production of a certain good with the purpose of establishing or sustaining privileges and profit from said privilege;
  • d selling any product at a price below its cost with the purpose of limiting free competition in our local market; and
  • e producing scarcity of a basic need product through its export without a permit issued by a competent authority when required.4

Some other specific laws regulate through very concise provisions matters related to free competition: the Telecommunications Law, the General Electricity Law and the Distribution of Hydrocarbons Law.

On May 2010, Guatemala adopted a commitment as part of the Association Agreement with the European Union to adopt antitrust legislation by the end of November 2016.

As of December 2016, Guatemala is still in the process of approving its first Competition Law and Congress has not finalised the approval proceedings necessary to send the bill to its final phase of approval before the Executive Branch of government.

On 17 May 2016, the Bill for Antitrust Law was submitted before Congress for its approval (Bill No. 5074).

A general outline of the Bill is as follows:

  • a purpose and general provisions;
  • b free competition defence;
  • c competition advocacy;
  • d the Superintendency of Competition;
  • e administrative procedure;
  • f infringements, sanctions, measures and prescription;
  • g reforms; and
  • h final provisions and transitory norms.

On 4 November 2016, the Congressional Commission on Economy and Foreign Trade issued a judgment on Bill No. 5074 in which it rendered a favourable resolution on the bill being discussed in Congress. The procedure of incorporating the bill as a law is still pending the approval of Congress of the whole bill, and the final sanctioning of the bill by the Executive Branch.

On 30 November 2016 Congress approved the Competition Law for final discussion. Although this does not provide for final approval of the law, it does obligate Congress to review the final draft of the law and sanction its approval.

All references made hereafter related to Bill No. 5074 may be subject to change in light of future amendments that could be approved by Congress during final discussions of the bill.

III EXTRATERRITORIALITY

As a general principle, Guatemalan law applies only within the territory of the Republic of Guatemala.5

However, Bill No. 5074 has included a provision in which it states that the Competition Law will apply to all acts originated outside the territory of Guatemala that have effects in the territory of Guatemala.

IV STANDING

The Guatemalan Commerce Code states that any person harmed by unfair competition, any trade association, or the Attorney General’s office may bring forth an unfair competition action in ordinary tribunals that oversee civil and commercial matters.

In addition, Bill No. 5074 grants standing to:

  • a the Superintendency of Competition, which is an autonomous state entity that will oversee the defence and promotion of free competition, prevention, investigation and sanctioning of anticompetitive practices. Any person with knowledge of an anticompetitive activity may inform the Superintendency of these acts;
  • b public officials and government employees; and
  • c accountants and auditors.

V THE PROCESS OF DISCOVERY

As a general principle, Guatemalan law does not provide for discovery.

However, Bill No. 5074 allows for an investigation to be initiated by the Superintendency prior to requesting the starting of an administrative procedure. Investigation by the Superintendency may involve, but is not limited to:

  • a verification visits;
  • b interviews with the economic agents; and
  • c request of information and documents.

This investigation process may be initiated by the Superintendency of Competition once a competent judge has granted authorisation to the Superintendency to do so.

VI USE OF EXPERTS

Guatemala has not approved legislation that regulates the use of experts in matters specifically related to competition or antitrust. However, as a general rule, the Civil and Commercial Procedure Code allows the use of experts as proof to be rendered within a trial. Experts are designated by each party during a trial and the judge appoints a third expert in case of discord. Experts must personally accept to act as such and must deliver a written opinion to the presiding judge.

VII CLASS ACTIONS

Class action suits are not regulated in Guatemala.

VIII CALCULATING DAMAGES

Compensatory damages are cognisable under Guatemalan law; however, they must be proven by the harmed party. These damages are calculated according to the losses suffered by the damaged party and to the profits that were lost by the rights holder as a direct result of the action.

Punitive damages are not awarded in either civil or criminal proceedings. Attorney fees and costs may be included in a final judgment rendered by a judge to be paid by the losing party.

IX PASS-ON DEFENCES

There are currently no limitations imposed beyond the initial sale.

X FOLLOW-ON LITIGATION

There is currently no legislation that provides any limitations on private actions or awards against parties who have been subject to public enforcement action or immunity.

XI PRIVILEGES

Under the Code of Professional Ethics, there is an obligation to keep professional secrecy and recognise attorney–client privilege. There is no objective parameter to determine the extent to which courts in Guatemala recognise this right that attorneys must keep professional secrecy, however judges tend to respect this right.

Our Criminal Code foresees the breach of professional secrecy as a crime that is sanctionable with six months’ to two years’ imprisonment or a fine.6

Information or documents produced to governmental authorities, unless categorised as reserved information or classified information, are deemed public and should therefore be accessible to the public upon formal written request.

Confidential information is defined in law as all information that either by constitutional mandate or by express provision in law has restricted access, or information that has been delivered by an individual person or a legal entity with the guarantee of confidentiality.

Reserved information is defined in law as all information whose access is temporarily restricted due to a provision in law.

XII SETTLEMENT PROCEDURES

Guatemalan law does not provide specific settlement procedures for competition and antitrust matters. Guatemalan law only regulates the applicability of settlement agreements either through a separate agreement or through a petition presented before a judge.

For a settlement agreement to be valid, the following requirements must be met:

  • a parties must have legal capacity to dispose of that which is the object of the settlement;
  • b the issues on which the settlement is taking place are either dubious or contentious;
  • c parties must promise to assign or give something reciprocally; and
  • d if the settlement is being carried out through a proxy, this person must have special powers not only to settle but to perform all acts and agreements derived from the settlement, if necessary.

XIII ARBITRATION

Guatemala has not approved competition or antitrust legislation regulating specific procedures such as arbitration and alternative disputes. However, arbitration and conciliation procedures are available for all matters in which a dispute mechanism can be freely chosen.

The current provisions drafted in Bill No. 5074 do not provide information as to whether alternative dispute mechanisms or arbitration will be allowed.

XIV INDEMNIFICATION AND CONTRIBUTION

There are currently no limitations set forth on seeking indemnification or contribution from third parties, co-defendants and cross-defendants. At this time, we do not know if the future law to be approved by Congress will introduce any limitation to those effects.

XV FUTURE DEVELOPMENTS AND OUTLOOK

As mentioned, Congress is in the process of approving Guatemala’s first competition law, Bill No. 5074. There is no specific date appointed for the approval of the Competition Law but Congress has expressed its willingness to approve this law in the first trimester of 2017.


1 Juan Carlos Castillo Chacón is a managing partner and Natalia Callejas Aquino is an associate at Aguilar Castillo Love, SRL.

2 Constitution of the Republic of Guatemala, Article 130.

3 Decree No. 2-70, Commerce Code, Article 361.

4 Decree No. 17-73, Criminal Code, Articles 340–341.

5 Decree No. 2-89, Judiciary Branch Law, Article 5.

6 Decree No. 17-73, Criminal Code, Article 223.