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 (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 the list of concentrations filed and reviewed by COPROCOM during 2107 and the first months of 2018.

Vote number Date Parties Relevant market
02-2017 17/1/2017 China National Agrochemical Corporation-Adama Agricultural Solutions, Ltda. Crop protection
10-2017 7/2/2017 Abbott Laboratories – St. Jude Medical, Inc. Medical devices
11-2017 7/2/2017 Koch Equity Development LLC – Golden Gate Capital Technology investment
20-2017 7/3/2017 Materiales El Lagar S.A – Los Constructores Rojas y Monge Retail marketing of construction materials, hardware and finishing materials
23-2017 21/3/2017 CPG Real Estate LLC,  IFP Holding Costa Rica S.A., SHI Hospitality Holdings Costa Rica S.A., El Gran Sueño LLC, Transporte Dos DCR S.A., Alonorange S.A. Aloguz Overseas Corporation S.A., Inversiones Valdepino S.A., Envases Comeca S.A., Conservas del Valle S.A., y Metales Flix S.A. Tourism real estate developments and the lodging industries in establishments of 4 and 5 stars in the Central Valley and Middle Pacific
27-2017 4/4/2017 Reckitt Benckiser Group Plc (RB) y Mead Johnson Nutrition Company (MJ) Health, Hygiene and Home. Nutrition of children and mothers
30-2017 18/4/2017 KGIC Merger Corporation – Guardian Industries Corp Glass products
36-2017 9/5/2017 Petróleos Delta C.R., S.A. – Total Petróleo C.R., S.A. Gas on retail market
38-2017 16/5/2017 3-101-731314 subsidiaria de la compañía 'Cuestamoras Salud Costa Rica, S.A. y la cadena de farmacias La Bomba Retail distribution of restricted-sale drugs in the GAM
39-2017 23/5/2017 Siemens AG – Gamesa Corporación Tecnología, S.A. Marketing of wind turbines to be used on land
41-2017 6/6/2017 ICU Medical Inc. – Pfizer Medical devices
44-2017 16/6/2017 Bayer Aktiengesellschaft – Monsanto Company Seed and Crop Protection
45-2017 20/6/2017 Pollos de Mi País S.A., Chakana S.R.L., Ángel Fedeli Milanta y Silvia Fedeli Rivera – Corporación Multi-Inversiones Hispania S.L Chicken meat (fresh or frozen, whole and clean) and sausages
50-2017 11/7/2017 3-101-675402 S.A – Calakial KSB, S.A. Clinical chemical analysis laboratories
58-2017 22/8/2017 Yara Internacional ASA., CORDEX HOLDINGS CR.S.A.; DUWEST INC. – CAFESA Crop Protection
60-2017 25/8/2017 Empresas conocidas como 'Farmacias La Bomba' – la empresa 3-101-731314, subsidiaria de la compañía Cuestamoras Salud Costa Rica, S.A. Retail distribution of restricted-sale drugs in the GAM
78-2017 14/11/2017 Inversiones Farmacéuticas Santa Lucía, S.A., Fralni del Oeste, S.A., FSL – Farmacias Chavarría, S.A. Retail distribution of restricted-sale drugs in the GAM
81-2017 14/11/2017 AMVAC de Costa Rica, SRL., Agricenter, S.A., AMVAC Netherlands, BV Crop protection
84-2017 12/12/2017 NAE HK -Shepherd WW. (Country Day School) Private and semi-private education at the preschool, primary and secondary level in the GAM
01-2018 16/1/2018 Envases Comerciales SA-Onex Corporation. Rigid packaging in the Central American territory
04-2018 16/1/2018 Applus Galicia – RITEVE SYC S.A. Vehicle technical inspection services in Costa Rica
09-2018 13/2/2018 3-101-675402 – Labiclin SA Clinical chemical analysis laboratories
14-2018 6/3/2018 BASF SE -BAYER (Business unit) Marketing of non-selective herbicides
16-2018 16/3/2018 METALCO -Aceros Abonos Agro SA Ceilings and accessories, profiles and pipes, rods, platinas and angles, beams, smooth sheets, trefliados
22-2018 10/4/2018 New Boston – GP Grupo Pelón Holding SA Marketing and distribution of mass consumption products

The most important case was the one in which a subsidiary of Cuestamoras bought a drugstore chain called La Bomba. Cuestamoras is the holding company of a large drugstore distributor, which had acquired the largest drugstore chain in the country. La Bomba was an independent drugstore chain known as the most price-aggressive player in the market, whereas Cuestamoras drugstores have a reputation of being the most expensive in the market. The case gained a lot of attention because Cuestamoras spent several months fighting against the participation of one of the members of COPROCOM who had initially inhibited herself based on a conflict of interest, but later entered into the case.

This was challenged by Cuestamoras, which was able to win the annulment of the part of the proceeding in which this member participated but could not win the argument that the time for COPROCOM to issue the opinion had elapsed and automatic approval was in order. After the annulment COPROCOM proceeded with the case and found the concentration would cause anticompetitive effects both in the distribution and in the retail levels of the market. Following the regulations COPROCOM asked Cuestamoras to offer appropriate remedies to the anticompetitive effects. Cuestamoras did not agree with the findings but still offered remedies to the alleged anticompetitive effects of the concentration. All remedies were behavioural remedies. COPROCOM accepted the remedies offered by Cuestamoras but unfortunately was not clear enough when explaining why and how the remedies were adequate to reduce the anticompetitive effects of the concentration identified by COPROCOM. COPROCOM also failed to establish an effective monitoring system to ensure Cuestamoras will comply with the remedies.


The Law defines concentrations as any change in control of an entity or of productive assets, as a result of a transaction between two independent entities. The Commission shall approve:

    1. 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;
    2. concentrations that do not facilitate express or tacit coordination among competitors, or that may not result in adverse effects for consumers; and
    3. 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 COPROCOM. Concentrations must be notified to COPROCOM 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 COPROCOM.

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

    1. a detailed description of the transaction;
    2. a description of the entities involved;
    3. audited financial statements of the past three years; and
    4. 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 COPROCOM

In the analysis of each concentration, COPROCOM shall determine whether the concentration is needed to achieve economies of scale or develop efficiencies that may offset the anticompetitive effects. If COPROCOM 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:

    1. 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;
    2. when the parties do not reach a 30 per cent market share in a vertically related market where one of them has operations;
    3. when the concentration is to complete ownership of an entity already controlled by the buyer; and
    4. 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 target entity 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 COPROCOM finds that the concentration may cause anticompetitive effects, it may approve the concentration subject to one or more of the following conditions:

    1. transfer or sale of assets;
    2. limiting the sale of products or services;
    3. an obligation to provide or sell certain products or services;
    4. introduction, amendment or elimination of certain contractual provisions; and
    5. any other condition that may be required to prevent, reduce or counterbalance the anticompetitive effects.

Conditions and remedies must have a maximum term of ten years, which may be extended for five additional years if there are still anticompetitive effects. The conditions imposed by COPROCOM 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, COPROCOM has 10 days to request additional information, which must be filed by the parties within 10 days. Parties may request an extension, which is usually granted. The Commission has started to dismiss cases if the additional information is not filed before the deadline.

The Commission has 30 calendar days to issue the resolution. However, in cases that are particularly complex, COPROCOM 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 COPROCOM 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 in spite of its ownership.

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 COPROCOM to determine that there will be no anticompetitive effects so that the case may be completed in 30-day term.

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 in cases where anticompetitive effects may be easily identified. If COPROCOM 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 COPROCOM determines that the proposal is insufficient to counterbalance the anticompetitive effects, it will notify the parties, and they will then have an additional ten day term to submit a second proposal. If COPROCOM 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 COPROCOM 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

COPROCOM 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 ten days to file information and evidence before COPROCOM. 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 COPROCOM. 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. In the cases ruled up to date by the Judiciary, 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, reference is made here to the most relevant topics covered by the guidelines. Besides, application of the guidelines by COPROCOM has not been apparent.

The Guidelines 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:

    1. no anticompetitive effects: HHI variation < 100 and HHI < 1,500;
    2. 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
    3. 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 amendment of the Law. 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 has not been an issue.

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 Costa Rican law, parties to a multi-jurisdictional 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.

The conclusions and recommendations of the experts point particularly to the lack of independence of COPROCOM, 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 been under discussion for more than a year and many modifications have been made, including the name of the new authority, which will be the National Council of Competition. Even though the government has worked hard in the process with the OECD there are still many open items in other areas that are not as advanced as competition. So, it is not clear whether the new government is going to have the ability to push the bid in Congress.

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. Associate Juan Pablo Lara also contributed to the research for this chapter.

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