The Law for the Promotion of Competition and Consumer Protection No. 7492 (Competition Law or Law) was enacted in Costa Rica in 1994 and came into effect in January 1995. The Law contains provisions related to deregulation, competition, unfair competition, consumer protection, comparative advertising and strict liability. It also created the institutional arrangements for the competition regime and for consumer protection by creating two separate bodies ascribed to the Ministry of Economy, respectively the Competition Promotion Commission (Commission or COPROCOM) and the National Consumer Commission. While these bodies are part of the Ministry, they are independent on technical matters. This means that the decisions of COPROCOM can neither be appealed nor revoked by the Minister of Economy. The Law is based on Article 46 of the Constitution. Furthermore, Costa Rica’s free trade agreement with Canada contemplates a commitment by both countries to establish mechanisms to deal with anticompetitive conducts and concentrations.

The merger control regime contained in the Law was enacted as an ex post system. In 2012, the legislature finally passed an amendment to the Competition Law that includes pre-merger notification provisions. The Law has been complemented by regulations issued by the government and by the Guidelines issued by COPROCOM. Merger control has absorbed much of COPROCOM’s resources to the detriment of other anticompetitive cases.

In the telecommunications sector, General Telecommunication Law No. 8642, issued in 2008, contemplates specific competition regulations that include pre-merger notifications. Filings must be made before SUTEL, the telecommunications authority; and SUTEL must then request a technical opinion from COPROCOM prior to issuing its final decision. COPROCOM’s opinion is not binding for SUTEL. The same applies to SUGEF in the banking sector, SUGEVAL regarding the stock markets, SUPEN in the pension funds sector and SUGESE regarding the insurance markets; according to the Competition Law, all these regulatory agencies must request COPROCOM’s technical opinion prior to approving a concentration. COPROCOM must issue its opinion within 15 days of receiving a request. Again, this opinion is not binding; however, if a regulatory agency does not agree with COPROCOM’s opinion and is not going to act upon it, it must explain the reasons why it will not do so.


The following is a list of the mergers reviewed by COPROCOM in the past year:






Mexichem SAB and Vestolit

24 March 2015



Essilor and Grupo Visión

24 March 2015

Glasses and equipment


Hotel Fiesta and Sueños Del Pacífico

31 March 2015



Pfizer Inc and Hospira

31 March 2015



Cocorisa and Fotolit

14 April 2015



Heraus UV Solutions GmbH and Ne-ometrics

14 April 2015

Medical equipment and devices


Inversiones Andros SA – CPG Real Estate LLC

14 April 2015

Real estate


Cuestamoras Salud SA and OLT In-vestments Inc and Socofar SA

23 June 2015

Multiple markets


Intelectiva Costa Rica SRL and Kentucky Fried Chicken Costa Rica

11 August 2015

Fast food


Inversiones Eólicas De Costa Rica SA and Globeleq Mesoamérica Energy (Wind) Ltd and Subsidiarias

11 August 2015

Energy generation


Kerry Costa Rica, SA, and Baltimore Spice Central America, SA, and King Tamar Investment, SA

11 August 2015

Seasoning, bread ingredients and other ingredients


Ab Electrolux and General Electric Company

11 August 2015

Home appliances


Cadena De Hoteles Barceló Corp. Empresarial, SA and Occidental Hoteles Management, SL

8 September 2015

Hospitality 4-to-5-star hotels


Empresa 3-101-698698 SA and Farmacia Chavarría SA

22 September 2015

Drugstores, drug manufacturers and drug commercialisation


Tyco International Holding, for the purchase of 100 per cent of the shares of Circuito, SA, Commission Consulting Company CTS, SA, and Kumma SA

13 October 2015

Electric and mechanical engineers; and security and fire monitoring services


Made in Austria SA, Breymann Motorsales SA and Distribuidora de Repuestos Europeos para Motocicletas SA

27 October 2015

Commercialisation of motorcycles from the high-end market


Siembras Globales Siglo, SRL compra de los derechos del fideicomiso El Porvenir-BCT/Dos mil catorce, de parte de Inversiones Sábalo, SA

10 November 2015

Raw rice


Greatbatch, Inc and Lake Region Medical Holdings, Inc

17 November 2015

Medical devices for heart and vascular applications


Grupo Empresarial de Supermercados, SA (GESSA) – ‘Súper San Pablo’

1 December 2015

Food and home products retail


Empresa 3-101-689687, SA) – Uniban de Costa Rica, SA

1 December 2015

Banana production


Enel Green Power Costa Rica, SA, Molinos del Viento del Arenal, SA and Tierras Morenas, SA Aerogeneración de Centroamérica, SA

15 December 2015

Energy generation


KKR & Co LP – SoftwareOne Holding AG

15 December 2015



Cadbury Netherlands International Holdings, BV, El Gallito Industrial, SA

9 February 2016

Snacks, sweets and chocolates


Newell Rubbermaid Inc – Jarden Corporation

9 February 2016

Scrap material, maternity items, hygene, home products and sports equipment


Clinverse, Inc (Clinverse, and WSHP JLL Intermediate, LLC

16 February 2016

Medical research


Abonos del Pacífico, SA, Disagro Investment Holding Inc, Compañía Treinta de Junio SA, Yara Internacional ASA, Fibras de Centroamérica SA

16 February 2016



Viajes Barceló, SL and Mayorista de Viajes, SA

23 February 2016

Travel agencies


ATI Capital Solutions, Vía Leasing

29 March 2016



Te Connectivity Ltd, Cregstar Hold-co Limited, Creganna Medical SRL and Cregstar Bidco Limited

29 March 2016

Medical devices


Gerber Ingredients SA – Inversora Carrerbadia SA

22 April 2016

Banana by food and banana essence for export


Depósito Las Gravilias SA – Corporación Comercial e Industrial El Lagar SA

10 May 2016

Hardware and construction materials


CMA CGM, Neptune Orient Lines Limitada (NOL) – Temasek Holding Limited

10 May 2016

Maritime transport of containers


Amcor Holding, Amcor Holding N° 1 Limited, Tech Pack SA, Inmobiliaria Techpack SA, Alusa SA e Inversiones Alusa SA

31 May 2016

Flexible packaging

All mergers were approved by COPROCOM, and therefore it is hard to look into a particular case to identify a key evidence, a relevant argument or a new trend in the decisions. Many of the cases were approved because the resulting market share was below 25 per cent, the entities participate in the export market or because the buyer already had control of the entity. However, there are still some interesting points to discuss during the past year’s activity.

i Variety of markets

Costa Rica is still trying to leave behind the effects of the 2008 economic crisis. According to the data, mergers have occurred in many different markets of the economy, which is usually a good sign of recovery. However, for a country with significant presence of foreign investment in different sectors of the economy, it seems that the number of merger notifications is rather low. So, it is possible that a number of mergers meeting the thresholds are not being submitted to COPROCOM. That seems to be COPROCOM’s feeling, because it has initiated some investigations of mergers that were not notified, but only to find that common control of the parties already existed, or that the transaction did not meet the thresholds.

ii Market definition

COPROCOM has always been very careful in defining the relevant market, even though it usually lacks the empirical evidence on product substitutability. However, the fact that COPROCOM has found no anticompetitive effects in any of the mergers this year makes one wonder if markets definition needs to be reviewed. Costa Rica is a small economy, and market concentration is very common, so it could be expected that competition concerns would arise more often in merger control.

iii Incidence in Costa Rica

The Law is not clear enough to establish that when only one party of the transaction has a presence in Costa Rica, the transaction does not have to be notified. Therefore, the government regulations make it clear that a transaction has to be notified if it meets the thresholds, and if at least two parties have an incidence in Costa Rica. However, it seems that some parties, or perhaps some practitioners, are not satisfied with this solution because many cases are filed before COPROCOM where the buyer has no direct or indirect presence in Costa Rica and the parties have still notified the merger. According to the law the parties are entitled to do so, and COPROCOM has interpreted that even in these cases it has to complete the full analysis of the competition effects. The use of resources on these mergers is not efficient.


The Law defines concentrations as any change in control of an entity or of productive assets. The Commission shall approve:

  • a concentrations that do not have the object or effect of creating or significantly incrementing market power when this may result in a limitation or reduction of competition;
  • b concentrations that do not facilitate express or tacit coordination among competitors, or that may not result in adverse effects for consumers; and
  • c concentrations that do not reduce, damage or prevent competition and concurrence on similar or closely related goods or services.
i Thresholds and deadline to notify

All concentrations where the amount of the assets of the entities involved, and those of their respective parent companies, exceed 30,000 minimum wages (about US$15 million), or where the total income generated in Costa Rica during the last fiscal year of all entities involved in the concentration exceeds that amount, must be notified to the Commission. Concentrations must be notified to the Commission before closing, or within five calendar days after closing.

The Government Decree2 narrows this threshold, indicating that concentrations shall be notified to COPROCOM where at least two of the entities involved have operations in Costa Rica, and also indicating that when the purpose of the concentration is the acquisition of part of the assets or a specific operation of an entity, then only the value of those assets or the income of said part of the operation shall be considered. The Government Decree also clarifies that only productive assets registered in the last annual financial statement shall be considered, but they must include the value of the productive assets of all affiliates that have had business activity in Costa Rica during the two years prior to the concentration. Income shall also include sales by all affiliates in the country (excluding sales among affiliates).

Once approved, COPROCOM cannot review a merger again, unless approval was granted based on false information, or the parties do not comply with the conditions or remedies imposed by the Commission.

The application may be filed by any of the entities involved in the concentration, and must include:

  • a a detailed description of the transaction;
  • b a description of the entities involved;
  • c audited financial statements of the past three years; and
  • d a description of the relevant markets, competitors and market shares, and the economic justification for the transaction.

The application must also include an analysis of the possible anticompetitive effects of the concentration, and a proposal to counterbalance such effects. The Government Decree includes a more detailed list of requirements, including a description of the barriers to entry.

ii Analysis of the Commission

In the analysis of each concentration, the Commission shall determine whether the concentration is needed to achieve economies of scale or develop efficiencies that may offset the anticompetitive effects. If the Commission finds that the concentration may cause anticompetitive effects, it must also determine if such effects may be counterbalanced by structural or behavioural remedies or conditions. The Commission may also approve a concentration, even if it may cause anticompetitive effects, if it finds any other circumstance that may protect the interest of local consumers, including if the merger prevents productive players from leaving the market.

Efficiencies must be directly generated by the concentration, not achievable by less restrictive means, verifiable, and enough to counterbalance the potential anticompetitive effect of the concentration.

According to the Government Decree, some concentrations do not create anticompetitive effects and shall therefore be approved by COPROCOM. This will happen in concentrations where:

  • a the parties involved do not participate in the same relevant market, horizontally or vertically, when the market share of the parties is less than 25 per cent jointly, or less than 40 per cent if the delta is less than 2 per cent;
  • b when the parties do not reach a 30 per cent market share in a vertically related market where one of them has operations;
  • c when the concentration is to complete ownership of an entity already controlled by the buyer; and
  • d when the entity created does not have or will not have business in the local territory.

This presumption shall not apply if the current market share of the parties is reasonably likely to increase, when there are indications of coordination among competitors or when COPROCOM determines that the presumption shall not apply.

The Government Decree also allows concentrations under the failing firm scenario. In this case, the concentration shall be authorised regardless of its effects, provided the financial situation of the entity being bought is such that it will exit the market in the short term if it cannot be reorganised under any insolvency proceeding; and when, prior to the concentration, efforts have been made to seek other purchasers or alternatives to the concentration.

iii Remedies and conditions

If the Commission finds that the concentration may cause anticompetitive effects, it may approve the concentration subject to one or more of the following conditions:

  • a transfer or sale of assets;
  • b limiting of the sale of products or services;
  • c an obligation to provide or sell certain products or services;
  • d introduction, amendment or elimination of certain contractual provisions; and
  • e any other condition that may be required to prevent, reduce or counterbalance the anticompetitive effects.

Conditions and remedies must have a maximum term of 10 years, which may be extended for five additional years if there are still anticompetitive effects. The conditions imposed by the Commission must be to address the specific effects of the concentration, and not to improve existing market conditions.

iv Time frames

The application may be filed by any party involved in the concentration before closing, or within five days after closing. After filing, the Commission has 10 days to request additional information, which must be filed by the parties within 10 days.

The Commission has 30 calendar days to issue the resolution. However, in cases that are particularly complex, the Commission may extend this term prior to its expiration for an additional 60 days. Only one extension is allowed. In the telecommunications sector, the extension is only 15 working days.

If the Commission fails to issue the resolution within said time frames, the concentration is automatically approved.

According to the proposed regulations, temporary acquisitions do not have to be notified. This includes acquisitions where assets are subsequently sold to a third party within a year, and where the buyer does not participate in any decision-making.

v Parties’ ability to accelerate the review procedure, tender offers and hostile transactions

It is important to include all information requested by the Law and the regulations, and any additional information that may make it easier for the Commission to determine that there will be no anticompetitive effects so that the case may be completed in 30 days.

The application must include a description of the concentration and the possible anticompetitive effects of the concentration. Parties may also include proposals to counterbalance these anticompetitive effects. This seems to be the only way to expedite the procedure; if the Commission agrees that the concentration may cause the effects described by the applicants and determines that the proposals supplied by them will be effective in counterbalancing the anticompetitive effects, it must approve the concentration subject only to the remedies or conditions proposed by the applicants.

If the Commission determines that the proposal is insufficient to counterbalance the anticompetitive effects, it will notify the parties, and they will then have an additional 10-day term to submit a second proposal. If the Commission is still unconvinced by the proposals of the parties, it will decide whether the concentration is authorised subject to different remedies or conditions, or whether it is not authorised.

Implementing the possibilities of parties to propose remedies and conditions depends on the ability of COPROCOM to quickly understand the market and the rationale of the concentration. In this sense, the parties need to be able to approach the Commission to explain and discuss ideas for the proposal, and to try to anticipate what the authority’s reaction might be. While approaching administrative and judicial authorities in somewhat informal meetings to discuss matters before them is quite usual in Costa Rica, the Government Decree offers a more formal approach. Both the applicants and COPROCOM’s staff may take the initiative to request a meeting to clarify information filed by the parties, and a summary of the meeting must be signed by all participants at the end of the meeting. This should facilitate more realistic and effective proposals from parties.

vi Third-party access to the file and rights to challenge mergers

The Commission shall order the applicant to publish a brief description of the concentration in a newspaper, including a list of the parties involved. The Government Decree aims to expedite this step by indicating that applicants must make such publication within three working days after filing, and send a copy to COPROCOM within three working days after the publication. Third parties shall have 10 days to file information and evidence before the Commission. There is a case in which a third party intervened and appealed COPROCOM’s decision to approve the transaction.

The Commission can also request information from third parties (e.g., competitors, suppliers and clients of the parties involved in the transaction), and these third parties must respond within the term granted by the Commission. The Government Decree establishes that this term shall be five working days.

vii Resolution of competition concerns of the authorities, appeals and judicial review

As explained above, decisions of COPROCOM cannot be revoked by the Minister of Economy. Appeals are made before COPROCOM itself to reconsider its own opinion. Opinions can also be challenged in court.

Judicial review may include both the formalities and the substance of the case. So far, the judiciary has favoured all decisions issued by COPROCOM on anticompetitive conducts (except in one case, when the court ordered COPROCOM to justify why different penalties were imposed upon the parties involved in the same case). Courts have focused on procedural matters, but have also made some considerations on the substance of cases, which is an indication that judges have a good understanding of competition matters.

viii Effect of regulatory review

Concentrations on regulated markets (i.e., telecommunications, banking, stock, pension funds and insurance) are examined and decided by the regulatory agencies. In all cases, the regulatory agency must request COPROCOM’s technical opinion and justify its own decision if it differs from COPROCOM.

ix The Merger Guidelines (Guidelines)

The Guidelines, were issued by COPROCOM on 28 May 2014. They are not binding; they were issued to give stakeholders an indication of the economic analysis COPROCOM will use in merger control analysis. The Guidelines are extensive and detailed; therefore, we make reference here to only some of the specific topics covered therein that have some connection to the cases already reviewed by COPROCOM.

The Guidelines also include definitions of some concepts that are not covered herein (e.g., a definition of economic control, plus suggestions of a variety of ways in which a change of control may take place), and a definition of the different types of mergers and how they are likely to impact competition.

In horizontal mergers that involve intermediate goods, if COPROCOM finds a negative impact for the clients, it will assume that such impact will also affect consumers of the final goods. However, if the merger is vertical or conglomerate, COPROCOM shall seek to determine the impact on consumers.

Market shares and market concentration will be more significant in the analysis of more stable markets. With regard to market power and the calculation of market shares, COPROCOM will generally use annual sales. However, in certain markets this may not be appropriate, such as very dynamic markets or markets where transactions are rather sporadic (i.e., wind turbines); therefore, different periods of sales might be used. In some cases, units sold or production capacity will also be used instead of sales.

In mergers that involve an entity with a large market share and a recent entrant to the market, COPROCOM will also look at the potential of the entrant to challenge the established competitors. Similarly, in mergers involving a maverick, COPROCOM will look more closely at the transaction.

The general standard based on the HHI will be:

  • a no anticompetitive effects: HHI variation
  • b potential anticompetitive effects: in markets with moderate concentration (1,500–2,500), HHI variation >100, and in highly concentrated markets (HHI >2,500), HHI variation 100–200; and
  • c where market power can be increased: in highly concentrated markets (HHI >2,500), HHI variation >200, particularly if market share exceeds 50 per cent.

The Guidelines list in detail the criteria COPROCOM will use to evaluate unilateral and coordinated effects, including the specifics of bid markets. This is conducted separately for each type of merger.

With regard to efficiency gains, consumer welfare shall prevail over internal efficiencies; thus, efficiencies should create benefits for consumers. Evidence must be based on studies conducted through sound technical methodology, and the studies should probe specificity, cost estimates, likelihood, when and how benefits will be transferred to consumers, how they stimulate capacity to compete, which consumers will benefit, and any other evidence requested by COPROCOM. Reductions in variable costs will be more appreciated than reductions in fixed costs, although the latter will not be ignored.

Finally, the Guidelines include some particularities regarding the analysis of mergers in specific markets such as telecommunications, air transport, energy and financial services. For instance, according to the Guidelines, with regard to telecommunications the definition of markets made by SUTEL is for regulatory purposes only. For competition purposes, such definition is not binding, although it might be used as a reference point by COPROCOM in its definition of the relevant market on a case-by-case basis, where COPROCOM will favour supply substitution over demand substitution.


The merger control system is more a hybrid than a pure pre-merger system. The possibility to notify within five days after closing poses a challenge to everyone involved. This is not an issue in regulated markets, where pre-closing notification is compulsory for all mergers. If parties notify after closing, it is likely COPROCOM will face the same challenges that it was used to under the ex post merger control that existed prior to the Law’s amendment. Likewise, the parties should be ready to face post-closing scrutiny that may end in an order to partially or totally undo the concentration.

Notifying prior to closing was a concern in local trade associations when the bid was being discussed in Congress. Many felt that notifying prior to closing would allow third parties to intervene, putting the transaction at risk. Thus, in those concentrations where local entities are involved, if they are not used to merger control and comparative law, it is likely they will want to notify after closing. Local entities are usually on the selling side of the transaction, and the decision of when to make the filing is more likely to fall on the buyer’s side. Therefore, this not been an issue. However, a case filed last year soon after closing on the last business day prior to national holidays (which forced some officials to work during the holidays).

In addition to the difficulties discussed above, the possibility of filing after closing makes coordination with authorities from other countries more difficult if other jurisdictions are involved, because in most other countries there is a pre-merger control system, and by the time they make their decisions, the application may not have been filed in Costa Rica.

If that is not an issue and all parties agree to notify before closing, then it is important to determine whether the possible anticompetitive effects are similar in all jurisdictions. If the possible anticompetitive effects are similar in all jurisdictions, the local authority may accept and adopt similar remedies or conditions imposed by more experienced authorities. However, because the time frame to reach a final decision is usually longer in other jurisdictions than that contained in our Law, parties to a multi-jurisdiction concentration may want to schedule the filings so that they receive a resolution from a more experienced agency first, which may then, be used as reference by the less experienced agencies.


COPROCOM’s response continues to be up to the challenge in many respects. On the merger control front, COPROCOM managed to complete its review of all the cases filed before it within the term established in the Law. With regard to the substantial analysis, there were cases where more in-depth discussion was necessary regarding key issues.

Costa Rica is seeking to be accepted as a member of the Organisation for Economic Co-operation and Development (OECD). As part of this process, the country is being evaluated in many aspects by the OECD’s experts. Competition is one of the areas undergoing this evaluation. The OECD has conducted two peer reviews. The first one was published in 2014,3 and the second one was conducted in 2016 and publication is expected at the end of the year.

The conclusions and recommendations of the experts point particularly to the lack of independence of the Commission, and advise that COPROCOM be transformed into an entity that is independent from the Ministry, and that full-time commissioners be established to promote specialisation and avoid conflicts of interest. As a result of the OECD recommendations, the government has published a bid to amend the Competition Law to eliminate COPROCOPM and create an Administrative Competition Tribunal, which will have three full-time members. The draft also includes leniency provisions and the elimination of the possibility to notify mergers after closing. The bid has already received some criticism because it brings unfair competition from judicial review to the Tribunal’s review, and because the way it re-articulates the relationship with the regulatory agencies is far from clear. The government is to review all comments and contributions and file a bid in Congress by the end of the year.

In the longer term, all stakeholders face a major challenge. The Association Agreement signed by the Central American countries and the European Union contains a competition chapter, Chapter VII, according to which all countries in the region must have in place a competition law that includes regulations regarding horizontal and vertical conducts and merger control. If a country does not have a competition law in place (like Guatemala), it should enact one within three years of the ratification of the Agreement by all countries. In addition, within seven years Central America must have a single competition law and competition authority. While this may be far in the future, as time passes we should begin to see greater coordination and teamwork between the competition authorities of the region.


1 Edgar Odio is a founding partner of Pragma Legal.

2 In September 2013, the regulations were published as a Government Decree for the proper implementation of the amendment of the Law.

3 www.oecd.org/competition/competition-law-and-policy-in-costa-rica-2014.htm.